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Joined: Dec 1999
Posts: 30,867
Master Elite Member
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Stop Corporate Welfare of Ex-Im Bank
President Obama’s most recent push focuses
on promoting manufacturing and doubling America’s exports. A February White House release reports $3 billion was
rolled back into the U.S. Treasury since 2005 as a kind of profit from
Export-Import Bank loan activities. Authorization for the Ex-Im Bank
expires in May 2012. Legislation is in the hopper that would extend that
authorization; opposing legislation also exists that would terminate the
program. Question is, what does the Ex-Im Bank really
accomplish?
Established in the 1930s under an executive order by
FDR as a portion of his New Deal bureaucracy, the Ex-Im Bank was to aid in
financing and facilitating exports and imports between the U.S. and other
nations or agencies, and specifically the Soviet Union. Loans (direct and
intermediary for re-loaning) to overseas customers would be given, backed
by the full faith and credit of the United States. In return, foreign
customers would agree to purchase products from certain producers -- a
win-win for recent loan customers such as China National Nuclear Power
Corporation, the failed Solyndra, General Electric, Boeing, and the failed
Enron, all having been politically favored by the Ex-Im Bank.
In the 2011 annual Ex-Im report 44 percent of $32.7 billion in
federal financial aid went to just three corporations -- Boeing, General
Electric and Black and Veatch International, an engineering firm. That’s $13.5 billion in help securing export business
they should have been able to secure for themselves. Critics say this is
corporate welfare and subsidization. Candidate Barack Obama was one of
those critics. In a speech in Green Bay, Wisconsin, September 22, 2008,
he said the Ex-Im Bank was “little more than a fund for corporate
welfare.”
The Ex-Im Bank awards and serves very few who profit
tremendously from the program. A Cato Institute analysis reports that awards of
the Ex-Im Bank process are “redistributing resources from the productive
sector to its chosen clients.” This is a distortion of the economy, and
inserts politics into commercial decisions in an attempt to “correct
market failure” in cases of supposed unfair competition.
The
“unfair competition” argument is sure to be a major talking point for both
Democrats and Republicans who support extending the Ex-Im Bank’s charter
for several more years, and also extending the loan cap upwards to $113
billion, or even $140 billion as in the case of H.R. 4302 (1 sponsor) and companion bill S. 1547 (1
sponsor). However, according to the Cato Institute article cited above,
"The claim that the bank supports U.S. exporters who face unfair
competition from subsidized firms abroad is unverifiable, as the bank does
not publish figures regarding the extent of this countervailing
activity."
While Americans continue to see a ballooning national
debt already over $15 trillion, and their once-secure futures ransomed,
it’s crazy to allow these bureaucrats to provide advantageous funding for
private corporations while the fact remains that taxpayers are
significantly exposed to billions of dollars of risk through potential
defaults for Ex-Im foreign loans and loan guarantees in a highly volatile
and faltering global financial market. Take it from the Ex-Im Bank Mission
statement page: “We assume credit and country risks that the private
sector is unable or unwilling to accept.”
Help make the Ex-Im Bank a thing of the past by
urging your Senators and Representative to shut it down and
let companies and foreign customers find their own private funding
sources. Real growth comes from honest competitiveness, not market
manipulation. Have them support H.R. 4268, the Export-Import Bank Termination Act of
2012, to end unfair polices of an agency whose activities are outside the
enumerated powers of the Constitution.
Thanks.
Your Friends
at The John Birch Society |
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