When the Export-Import Bank expired in June, opponents of corporate welfare and crony capitalism won a crucial victory toward promoting responsible government. The bank, which purportedly exists to finance US exports, has become nothing more than a taxpayer-funded slush fund for big business, both American and foreign.
Unfortunately, supporters of the bank are on the verge of forcing a reauthorization vote through rarely-used procedural tactics. ATR, together with 39 other organizations representing millions of taxpayers recently sent a letter urging Congress not to reauthorize Ex-Im.
After almost derailing unrelated, must-pass highway funding legislation by demanding reauthorization, Congressional advocates of this wasteful agency are now employing a procedural rule known as a discharge petition to force a vote through bypassing regular order and the committee process.
Even now, supporters of the Ex-Im Bank continue to tout its importance to protecting American exports and jobs. But in reality, these “facts” are based on misleading logic and outright lies.
First, the bank DOES NOT cost taxpayers nothing, as supporters claim. Supporters, including the President have rolled out this line, while others have argued it will make $14 billion over ten years. But this number is based on a tortured, manipulated analysis and when using “fair-value accounting” which takes into account market risk, the bank actually loses $2 billion in taxpayer funds over ten years.
Second, the bank DOES NOT support small businesses. Proponents of the bank love to claim it supports the little guy, but in reality the opposite is true — over 3/4 of the bank’s financial assistance benefits just ten corporations. In fact, according to White House data analyzed by Veronique de Rugy of the Mercatus Center, it supports just 0.28% of small businesses.
Further, the Ex-Im definition of “small business” is generous at best, and misleading at worst. For years, the bank has been manipulating the numbers in this area – a small business is defined by Ex-Im as a business with 1,500 employees or less. However, most government agencies define a small business as one-third that size, just 500 employees and Obamacare sets a small business exemption threshold of 50 employees or less for its employer mandate.
Third, the bank’s expiration IS NOT causing mass outsourcing and job loss. Since July, Ex-Im supporters have done all they can to prove jobs are being lost en masse. But this is simply not true. As Rep. Paul Ryan (R-Wis.) points out, many well-publicized stories of job losses really have nothing to do with Ex-Im despite the desperate attempts by some to link the two. In reality, it has more to do with the high US business tax rate, which is amongst the highest in the developed world. And as the Washington Examiner’s Tim Carney points out, the only thing that has changed for well-financed super corporations is that the availability of export credit is now determined by actual market risk, not handed out on a whim off the backs of American taxpayers.
Simply put, the Ex-Im Bank is doing more harm than good. While it may have once served American exporters, today it subsidizes a select few well-connected corporations through reckless taxpayer funded loans.
ATR, together with 39 other free-market and conservative groups, and millions of American taxpayers urge Congress not to revive the Ex-Im Bank, and reject procedural tactics seeking to do so.
To read the full letter click here.