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. T
hat’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.”
Contact your representatives here 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
