The Export-Import Bank is once again up for reauthorization come Sept. 30. A swampy institution that promotes crony capitalism and subsidizes large businesses that don’t need the help, Congress should simply allow the Ex-Im Bank to die.
The goal of the Ex-Im Bank is to promote American exports by providing loans to American exporting businesses as well as foreign entities wishing to import American goods. In theory, the bank works to promote exports for all types of businesses, justifying its cost through the jobs it sustains.
In practice, however, the Ex-Im Bank is little more than a slush fund for a few well-connected businesses. Less than one percent of one percent of American businesses receive any aid from the Ex-Im Bank, and none more than Boeing. Boeing received 34 percent of all Ex-Im Bank aid between fiscal years 2007-17, while all small businesses combined received just 22 percent.
That big business dominance in Ex-Im Bank loans lapsed recently with the absence of a quorum on the bank’s board, meaning that it lacked the authority to issue the type of large loans that big businesses thrive on. Yet back in May, Congress once again restored this large-loan authority by confirming three members to the Ex-Im Bank’s board.
Advocates of the Ex-Im Bank claim that the bank safeguards jobs through the exports it “promotes.” Yet this ignores the fact that there are plenty of private investors willing to financially support productive ventures. Given the tiny percentage of businesses that receive Ex-Im aid in the first place, one can hardly argue that the American economy is dependent upon Ex-Im subsidies.
And the Ex-Im Bank’s irrelevance to the market is borne out by the data. One study found that Ex-Im bank activity simply did not have a “sizable impact” on U.S. exports. The same study also put the kibosh on the idea that Ex-Im is important to small businesses, noting that Ex-Im authorizations to small businesses “did not have an impact” on small businesses exports — in fact, only larger businesses saw any meaningful positive impact on exports from the Ex-Im Bank.
Yet while Ex-Im is providing handouts to big businesses, taxpayers are left with the check for Ex-Im. That’s a sizable check, as the Congressional Budget Office estimates that the Ex-Im Bank costs taxpayers roughly $2 billion a decade. That’s a lot of money to ask taxpayers to pay to subsidize large businesses.
And as with all forms of crony capitalism, the cost of the Ex-Im Bank goes beyond the cost on paper. By providing subsidies to large businesses, Ex-Im artificially gives them a leg up in the market, making it harder for smaller businesses (as well as large businesses that don’t enjoy the fruits of Ex-Im generosity) to compete.
Instead of extending this epitomization of the swamp further, Congress should simply let the Ex-Im Bank expire. Big businesses don’t need a government checking account, and taxpayers certainly should not be paying for one.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.