President Fred Hochberg of the Export-Import Bank (Ex-Im) has repeatedly stated that Export-Import Bank is crucial to the U.S. export industry and helpful to small businesses. Ex-Im’s latest $15 million guarantee, which helped Caterpillar sell equipment to its own subsidiary, is the latest example of the outrageous loans that have become all too common under Ex-Im.
Power equipment rental company Energyst B.V., more commonly called Energyst Cat Power, is a subsidiary of Caterpillar, Inc. After receiving a $15 million guarantee from Ex-Im, Energyst Cat Power proceeded to use this loan to finance the purchase of power equipment. In other words, $15 million was given to Caterpillar to buy things from Caterpillar.
The myth that U.S. export transactions would cease to exist without the Ex-Im Bank has taken center stage as supporters desperately fight to extend Ex-Im’s charter. This recent transaction between Caterpillar, Ex-Im, and Caterpillar proves how frivolous and unnecessary the bank is. Caterpillar would have been able to buy equipment from themselves just fine but they’d much prefer to do so on taxpayer’s dime.
While supporters of the bank also claim that Ex-Im supports small businesses, Caterpillar is the world’s leading manufacturer of construction and mining equipment and continues to be one of the biggest beneficiaries of Ex-Im largesse. Employing 115,000 people and being one of the five corporations to receive 93 percent of Ex-Im’s loan guarantees in FY 2013, Caterpillar, Inc. is no small business.
The June 30 expiration date of Ex-Im’s charter is fast approaching. After countless taxpayer subsidized handouts to failed businesses, Congress must take a stand against corporate welfare. It’s time for Congress to stand with the free market and let the Ex-Im Bank expire.