Congress will soon be considering whether or not to reauthorize the Export-Import Bank (Ex-Im Bank). Some might say that this is a decision about leveling the playing field for American businesses competing abroad – but at the end of the day, this is a question about whether we want big government to put taxpayer dollars on the line for ventures that often benefit big business. Our private sector needs simpler taxes and fewer mandates from Washington, not corporate welfare.
The Ex-Im Bank is a New Deal relic that purportedly helps American small businesses compete in foreign markets. In reality, a majority of Ex-Im Bank financing uses taxpayer dollars to back the overseas sales of large, profitable companies like Boeing, John Deere, Caterpillar, Dell, and GE – businesses that don’t need a government handout. In 2011, total U.S. exports came to $2.1 trillion. During the same year Ex-Im Bank approved $32.7 billion in loans, which is equivalent to just over 1.5% of our exports!
As markets open and grow, exports are expected to keep rising, and they will certainly do so without the unnecessary subsidies from Ex-Im. This kind of crony capitalism only encourages wasteful spending and does not serve the interests of taxpayers like you.
On the campaign trail, even President Obama called Ex-Im Bank “little more than a fund for corporate welfare.” Like Fannie Mae, and Freddie Mac, the Ex-Im bank puts taxpayers at considerable risk and distorts markets. When government picks winners, the real losers are the American people as witnessed by debacles like Solyndra and Enron, two companies that received Ex-Im Bank funding.
Proponents of the bank like to say that it fills in funding gaps when private entities don’t want to make the same investment. That should be a clear warning sign for taxpayers. If private banks and entrepreneurs don’t want to invest their own money, our tax dollars shouldn’t be exposed either.
Rather than continue to fund an outdated institution that is not needed, that encourages crony capitalism, and poses a financial risk to our struggling recovery, Congress should pursue real reforms that would level the playing field for all U.S. businesses, not just the ones who win favors.
A good place to start is by lowering our corporate tax rate, the highest in the world among developing nations, and making our tax code fairer and flatter for everyone. Removing burdensome regulations that raise the costs to do business would also encourage growth and save consumers money. Together, these changes would do far more good for American businesses large and small – as well as consumers and taxpayers – than any subsidy from the Ex-Im bank ever could.
Thank you for your ongoing support and for taking action on this important issue. You can read more about the Ex-Im Bank, the bad bets it has made with your money, and the interests it really benefits at NTU.org.
Your Grassroots Action Team at NTU
P.S. Please consider donating to NTU today to help us keep up the fight against spending and waste.