For Immediate Release February 1, 2011

Contact:  Leslie K. Paige 202-467-5334 Luke Gelber 202-467-5318

CAGW Issues SPENDING CUT ALERT: Export-Import Bank

(Washington, D.C.) –Today, Citizens Against Government Waste (CAGW) issued its weekly spending cut alert aimed at eliminating the Export-Import Bank of the United States. The Export-Import Bank was created during the Great Depression by President Franklin Roosevelt in 1934 in order to aid “the exchange of commodities and services between the United States … and any foreign country or the agencies or nationals of any such country.” The renewal of its charter in 2011 should be denied.

Today, the bank uses taxpayer money to subsidize borrowing by firms both in America and abroad, most of which are profitable and would have no trouble borrowing without the subsidy. According to the Cato Institute’s Aaron Lukas and Ian Vásquez, the Export-Import Bank “merely displaces private investment by funding ventures that would otherwise have taken place. Moreover, the vast bulk of the Bank's financing goes to very large corporations that do not need handouts from taxpayers.”

Companies that receive low-cost loans from the Export-Import Bank include Boeing, Halliburton, Chevron, Caterpillar, and Dell. Critics have called it the “Reverse Robin Hood” because it takes money from taxpayers and distributes it to rich corporations. Yet, despite opposition from advocacy groups on both the left and right, the bank still exists. President Bush unsuccessfully attempted to cut the bank’s funding by 25 percent in 2001.

“The Export-Import Bank is one more example of the government’s willingness to continue to expose taxpayers to risk while allowing private companies to reap the benefits,” said CAGW President Tom Schatz. “It provides politicians with easy handouts dressed up as ‘job creation,’ but it’s corporate welfare through and through.”

According to CAGW’s Prime Cuts Database, shutting down the Export-Import Bank would save taxpayers $189 million in one year and $945 million over five years. Those numbers do not include the losses taxpayers can incur on loans the bank guarantees, which will total $19.4 billion in FY 2011. The entire Prime Cuts database includes 763 waste-cutting recommendations that would save taxpayers $350 billion in the first year and $2.2 trillion over five years.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government. The Spending Cut of the Week calls attention to a federal program that is wasteful or duplicative.