Earlier today, Republican Study Committee Chairman Jim Jordan (R-OH) sent a letter to Treasury Secretary Tim Geithner requesting an update on how negotiations to eliminate export subsidies are going. In a nod to Export-Import Bank (Ex-Im Bank) critics, last spring’s reauthorization requires the Treasury to pursue these negotiations with regular updates to House and Senate Committees. The letter specifically asks for:
A report on the progress of any negotiations to eliminate export subsidies, as described in Public Law 112-122, until the Secretary certifies in writing to the committees that all countries that support subsidized export financing programs have agreed to end the support; and
A report on the progress of any negotiations to eliminate aircraft export credit financing, as described in Public Law 112-122, including the progress of any negotiations with respect to each classification of aircraft set forth in the Act, until the Secretary certifies in writing to the committees that all countries that support subsidized export financing programs have agreed to end the support of the relevant aircraft
While Congressman Jordan’s letter comes as an early reminder of Ex-Im Bank’s obligations, it would be a huge surprise if there was any time left in the day to undertake any such discussions, not when there are millions of new dollars to hand out. Far from working to eliminate unnecessary export subsidies, Ex-Im Bank has been hard at work underwriting seemingly everything that comes across the desk.
Writing just yesterday, our friends at Heritage Action note several recent taxpayer backed loans:
How would you like the taxpayer-backed United States Export-Import Bank to provide direct loans for the export of PV modules to Barbados-based Williams Industries-Williams Evergreen at the cost of $6.4 million, the export of a Lockheed Martin satellite to the government of Vietnam at the cost of $118 million, and the export of goods and services for the construction of an AQUARIUM to the Brazilian state of Ceara for the one low cost of $105 million?
Your wish is the Ex-Im Bank’s command!
It’s true that everyone loves a great taxpayer funded aquarium at the other end of the hemisphere (for anyone who can’t make the trip, there’s a picture here), but the solar power modules for Barbados should be especially troubling to taxpayers. That’s because the government doesn’t have a great track record when it comes to investment in “green energy” projects like the one in Barbados.
One of Ex-Im Bank’s most famous failures is the poster-child for bad green energy investments: Solyndra, maker of uncompetitive solar cells, received $10 million. Another green energy loan recipient laid off 200 U.S. workers in August, soon after receiving a multi-million dollar Ex-Im Bank loan. And the list of taxpayer backed green investments goes on and on when you consider not just the generosity of Ex-Im Bank, but of the EPA’s Title XVII grant program as well. Together, the investments made by these programs are in marked contrast to those being made in the private sector where CNN reports green startups are now considered toxic:
… investors say they won't lend money to green energy companies, especially startups, because they haven't proven they can be profitable on their own.
Unfortunately, the fact that private capital is fleeing the green energy sector doesn’t seem to be a reason why taxpayer dollars shouldn’t be exposed to the same big risks. Only last week, came the news that despite headlining losses in the solar industry, Washington shelled out another $197 million on yet another firm.
SoloPower closed on a guaranteed government loan of $197 million last August, about the time another solar panel manufacturer, Solyndra, filed for bankruptcy. The failure of Solyndra cost U.S. taxpayers more than a half-billion dollars.
The second solar panel maker that received a loan from the Department of Energy, Abound, is also now in bankruptcy. Based in Longmont, Colo., Abound spent $70 million of its green energy loan and next week will auction off its equipment in hopes of paying some of that back.
Industry analysts are not optimistic about SoloPower's prospects.
"It's questionable at this point," says Andrew Soare of Lux Research, "It's uncertain if solar power will be able to produce efficiently and economically at scale. It's something that has not been done yet, and it's still risky."
Whether Congressman Jordan gets a timely or satisfactory response to his request remains to be seen, but his letter is a good reminder that just because Ex-Im Bank was reauthorized doesn’t mean it shouldn’t continue to be held accountable. Subsidies or no subsidies, using taxpayer dollars to back risky loans where private investors fear to tread is irresponsible at best, regardless of whether it’s Ex-Im Bank, the EPA, or any other agency. While efforts to stem the tide of cheap credit have yet to succeed, NTU is glad to see that Congressman Jordan is still leading the fight on behalf of taxpayers everywhere.