Every five years, Congress votes to renew the Export-Import Bank. The Ex-Im is a federally owned credit corporation, and its renewal is up in September of this year.
The language in the renewal includes a couple of disturbing provisions that would increase the American taxpayer’s exposure to bad loans, and would remove even the five-year renewals. If Congress keeps the following language in the provision, the Ex-Im becomes an even more permanent beast.
“Section 12. Limitation on Outstanding Loans, Guarantees, and Insurance. The proposed amendment increases the Bank’s limit on its aggregate loan, guarantee and insurance exposure by $5,000,000,000 each fiscal year starting in FY2015 through FY 2018 to $160,000,000,000. The Bank’s exposure limit remains at $160,000,000,000 thereafter…”
“Section 14. Extension of Authority. The proposed amendment extends Ex-Im Bank’s authority through September 30, 2019. In addition, the proposed amendment strikes language requiring the Bank to liquidate following a lapse in authorization, rather than following a more typical winding down process followed by other agencies in the event of a lapse of authorization.”
Mercatus Senior Research Fellow Veronique de Rugy took at look at where the Ex-Im’s loans tend to go. The vast majority go to just a few, select, massive corporations.
The chairman of the Ex-Im recently admitted that massive companies like Boeing don’t even really need his bank.
Fred Hochberg, the very vocal leader of a little known credit export agency called the U.S. Export-Import Bank, made a stunning admission in an interview with the Philadelphia Inquirer. In the words of reporter Joe DiStefano, Hochberg explained“Big commercial jet makers like Boeing tend to arrange their own financing.”
Boeing, GE and the other major beneficiaries of the Ex-Im’s loans are big boys. They can handle their own financing without putting any taxpayer money on the line.
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