CCAGW Calls for End to Ex-Im Bank

(Washington, D.C.) – Today, the Council for Citizens Against Government Waste (CCAGW) urged the House of Representatives to reject H.R. 2072, the Securing American Jobs Through Exports Act of 2011, which, as amended, would renew the charter of the Export-Import Bank of the United States (Ex-Im Bank) through September 20, 2014. The bill is co-sponsored by House Majority Leader Eric Cantor (R-Va.) and Minority Whip Steny Hoyer (D-Md.).

The Ex-Im 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.” Ex-Im Bank provides billion of dollars in taxpayer-backed direct loans, loan guarantees, and export-credit insurance to private firms and foreign governments. But the bank’s mission statement that it accepts “credit and country risks that the private sector is unable or unwilling to accept,” posted on ExIm.gov, is untrue. In many years, the majority of Ex-Im Bank’s guarantees and loans have gone to Boeing, which is one of the world’s largest and most profitable firms, rather than a high-risk borrower.

Ex-Im Bank has also made or guaranteed loans to Halliburton, Dell, Caterpillar, Chevron, and Emirates Airlines. Despite its foreign ownership and profits of $964 million in 2010, Emirates Airlines received subsidies through Ex-Im Bank’s Export Credit Insurance program, which guarantees loans issued to foreign companies that import American goods. When Emirates borrowed money to buy planes from Boeing, Ex-Im Bank helped Emirates obtain a lower rate by guaranteeing the loan. Had Emirates defaulted, Ex-Im Bank would have stepped in with taxpayer dollars.

“Ex-Im Bank often justifies its mandate by pointing out that it operates at no cost to taxpayers,” said CCAGW President Tom Schatz. “While it is true that the bank makes a profit in some years, that is only possible because it does so much business with successful firms with excellent credit ratings. If Ex-Im Bank were truly focused on filling ‘gaps in private export financing,’ those profits would disappear. If Congress disagrees, and Ex-Im Bank can operate profitably and at no cost to taxpayers while doing work shunned by existing firms, it should be privatized.”

Whatever its original intent may have been, today Eximbank is an obvious example of corporate welfare, transferring wealth from all Americans for the benefit of politically-connected corporations. Denying the renewal of Ex-Im Bank’s charter would eradicate a wasteful institution whose time has passed.

The Council for Citizens Against Government Waste (CCAGW) is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.