By CAGW, Special for USDR
At midnight tonight, the Export-Import (Ex-Im) Bank will die a silent death, and taxpayers will celebrate the demise of its decades of corporate welfare. The Council for Citizens Against Government Waste (CCAGW) first called for the elimination of federal funding of the bank in 1998.
“While Washington tends to revive seemingly dead programs and agencies, taxpayers should be hopeful that the Ex-Im Bank handed out its last new dollar last night”
The Ex-Im Bank is an independent government agency that was founded in 1934 to help encourage U.S. exports. The bank provides taxpayer-backed direct loans, guarantees, and export credit insurance, which totaled $27.5 billion in fiscal year (FY) 2014.
About two-thirds of the bank’s payouts went to only 10 businesses in 2013, some of which had profit margins in the hundreds of millions. It was even dubbed “Boeing’s Bank” by The Economist due to the substantial amount of taxpayer funding Boeing has received. Other stable, profitable companies such as Caterpillar, Chevron, Dell, Emirates Airlines, and Halliburton, have also received taxpayer support from the Ex-Im Bank despite having had no trouble securing private financing.
On top of the questionable financial judgment of subsidizing large corporations, the bank has also been a haven for corruption. A July 2014 review of Ex-Im Bank Office of Inspector General (OIG) data by The Heritage Foundation found that between October 2007 and March 2014, there were 792 claims of fraud resulting in 124 investigations. Since 2009, there have been 85 indictments for fraud, bribery, or other wrongdoing, with 48 criminal judgments issued.
Despite claims by the bank’s backers that it operates at zero taxpayer expense, a May 2014 Congressional Budget Officereport found that when the fair value accounting method is used, Ex-Im Bank is estimated to have a 10-year cost of $2 billion. That is among the many reasons why elimination of the Ex-Im Bank was included in Prime Cuts 2014.
“While Washington tends to revive seemingly dead programs and agencies, taxpayers should be hopeful that the Ex-Im Bank handed out its last new dollar last night,” said CCAGW President Tom Schatz. “We are pleased that our long-standing efforts to kill the bank have succeeded. Although existing loans and guarantees will be honored, the bank cannot make any new deals unless Congress decides to bring it back to life. The Ex-Im Bank should remained buried and not turn into another ‘Walking Dead’ program that rises out of the ground like a zombie. Killing the bank required no action by Congress; its authorization simply expired. Since members of Congress are fairly competent at doing nothing, that should be their continued approach to the Ex-Im Bank.”
The Council for Citizens Against Government Waste 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.