For the last 80 years, the Export-Import Bank has subsidized American business operations overseas by financing international investments for US firms.The bank has earned a reputation as the poster child for crony capitalism and corporate welfare. Fortunately for supporters of free enterprise, there exists a window of opportunity to put an end to the irresponsible subsidies when the bank’s charter expires on June 30.
Congress can do the right thing by simply doing nothing and allowing the bank’s charter to expire. Not only does the bank leave taxpayers on the hook for hundreds of millions of dollars each year, it distributes these funds in an unfair and irresponsible way to big business.
While the bank purportedly exists to help American business compete overseas, in reality the bank assists a tiny fraction of businesses. In fact, the bank overwhelmingly favors large, well-connected, and well-funded corporations that simply do not need this money. Recent data has found that less than 1 percent of 1 percent of small business benefit from subsidies distributed by the bank.
Not only are these subsidies unnecessary, they are also reckless. The Ex-Im bank’s business model is based on irresponsible loans and poor accounting which leave taxpayers on the hook. According to the Congressional Budget Office, reauthorizing the Ex-Im bank will cost taxpayers a $2 billion over the next decade.
In an effort to end the Ex-Im bank once and for all, ATR recently joined with 55 other free-market organizations to urge Congress to put a stop to this irresponsible corporate welfare. As the letter states, taxpayers deserve a system based on free enterprise, not political favoritism:
America deserves an international trade policy that is based on free-market mechanisms, not paying foreign companies to buy exports from large corporations with political connections.
While Financial Services Chairman Jeb Hensarling (R-Texas) has fought hard to end the bank, he faces resistance from members on on both sides of the political spectrum who are eager to preserve the status quo. Speaker John Boehner recently said he will support any plan that Chairman Hensarling has.
If ever there was a time for fiscal discipline, it is in today’s tight climate of federal deficits and tight budgets. Quite simply, taxpayers cannot afford to subsidize this icon of crony capitalism any longer.
Urge your Congressman to oppose reauthorization of the Export-Import Bank by calling 202-224-3121