prev next

Americans for Prosperity-PA


Time to End Export-Import Bank

by Beth Anne Mumford,
PA State Director, Americans For Prosperity
 

It's time to break the bank in Washington:

Defenders of Washington's corporate welfare are now working overtime to protect their special favors. One of the biggest purveyors of those favors, the U.S. Export-Import Bank, is set to expire at the end of June. To keep the tax dollars flowing, bank supporters have been on a charm offensive to make sure that Congressional representatives toe the line and reauthorize the bank.

The bank's erstwhile job is to provide loans and guarantees to banks, which then finance companies attempting to import and export goods. The lion's share of its money goes to multi-national, multi-billion dollar corporations. With the EXIM bank, taxpayers subsidize the customers of some of the nation's largest companies.

These large, usually publicly traded companies would have no problem securing funding from elsewhere. After all, U.S. exports wouldn't have reached a record high $2.2 trillion last year if there weren't plenty of private finance opportunities available. Yet thanks to the Export-Import Bank, these companies can avoid the risk by using public money to guarantee private profits.

This generosity results in significant taxpayer exposure. American taxpayers are currently on the hook for approximately $134 billion in outstanding Ex-Im loans. This is a more than 100 percent increase since 2007, the year after the bank's most recent congressional re-authorization.

Corporate welfare drives most of us mad as more money comes from our pocket to pay for these schemes, which undermine the free-market, but there are many reasons taxpayers should call on their lawmakers to support the expiration of the Export-Import bank.


First, by its own reporting, the bank is hardly a friend of small business. Ex-Im loans supported only 0.04% of small businesses through loans or loan guarantees. Meanwhile, 68% of the bank's long-term, taxpayer backed loan guarantees went to just one single, large corporation.

Second, the bank is expensive. The non-partisan Congressional Budget Office has cautioned that the accounting used by the bank is insufficient and that by using a fair-value calculation (such as is used by most private businesses) the bank will cost an astounding $2 billion over the next decade. The Government Accountability Office found that the bank's outstanding liabilities grew from a concerning $51.42 billion in 2007 to $134 billion in 2014.

Third, the bank's loans are, at least in some cases, politically motivated. It strains credulity that lobbying is not at least partly to blame (thank?) for the bank making three quarters of its loans last year to big companies like Boeing, General Electric, and Dow Chemical. The political wheel greasing is hard to doubt given the recent corruption scandals at the bank, in which the blatant bribes and kickbacks would cause Frank Underwood to blush. (http://townhall.com/columnists/ericpeterson/2015/04/24/times-are-tough-for-the-exportimport-bank-n1990003/page/full

Fourth and finally, supporting free trade is not the same thing as supporting the Export-Import bank. Kudos to the members of Congress who oppose subsidizing big businesses and know the best thing for job creation is a dynamic market with less government intervention, not more.

Solving problems and getting things done does not mean reauthorizing the Export-Import Bank. And Congress has a rare opportunity to let a bloated, wasteful, costly government program die. It would be a win for taxpayers and is the right thing to do. Let's break the bank.

I'm Beth Anne Mumford, State Director of Americans for Prosperity–PA. Join our fight for limited, responsible government and lower taxes at www.afppennsylvania.com. Help us stand up for the American Dream.


Share   Share

Featured Columnists
Featured Audio Links