No, Senator Pryor, Export-Import Isn’t Good For Arkansas

August 08, 2014

“We agree with President Obama that the Export-Import bank “is little more than a fund for corporate welfare,” said Arkansas State Communications Director Elizabeth Aymond. “In fact, the bank sends hard-earned Arkansas taxpayer dollars to foreign companies that could just as easily secure private assistance. This helps foreign governments that compete directly with our businesses, and costs American jobs. Contrary to Sen. Pryor’s claims, the bank contributes almost nothing to support local jobs in Arkansas, but puts the state’s taxpayers at “severe” risk. Tell Sen. Pryor it’s time to retire the Export-Import Bank.”

THE EXPORT-IMPORT BANK DOES LITTLE FOR LOCAL BUSINESSES IN ARKANSAS

Arkansas Businesses Received Four-Tenths Of One Percent Of Export-Import Bank Expenditures From 2007 To 2014: (Veronique de Rugy, “Ex-Im Funds Flow to Few States, but All Bear the Risk,” The Mercatus Center at George Mason University, 7/30/14)

The Export-Import Bank Backs Just 1.5 Percent Of Exports Generated In Arkansas: (Veronique de Rugy, “Ex-Im Funds Flow to Few States, but All Bear the Risk,” The Mercatus Center at George Mason University, 7/30/14)

BUT IT DOES SHIP JOBS TO FOREIGN COUNTRIES LIKE CHINA & RUSSIA

The Bank Subsidizes Companies Owned By The Chinese Government: “Ex-Im, for instance, gave a $75.8 million loan to the state-owned Industrial Commercial Bank of China, the largest bank in the world.” (Tim Carney, “Pretending to be rivals, U.S. Export-Import Bank subsidizes foreign export agencies,” The Washington Examiner, 8/5/14)

It Also Sent $1 Billion To Russian Companies That Are Now Under U.S. Sanctions: “The Export-Import Bank of the United States (Ex-Im Bank) and Sberbank of Russia, the largest financial institution in Russia and the CIS, today signed a $1 billion Memorandum of Understanding (MOU) to facilitate increasing U.S. exports of goods and services to Russia and other countries in which Sberbank operates and Ex-Im Bank programs are available.” (U.S. Export-Import Bank, “Ex-Im Bank and Sberbank Reach $1 Billion Agreement to Increase U.S. Exports and Trade with Russia,” Press Release, 6/21/12)

And Gave Over $1 Billion To A Corrupt Mexican Oil Company: “The U.S. Export-Import Bank on Monday said it was providing a government guarantee for $1.2 billion in bonds that Mexican state oil company Pemex plans to issue to finance purchases of U.S. goods and services.” (“U.S. Ex-Im Bank to back $1.2 billion in bonds for Pemex,” Reuters, 6/25/12)

And Funds Dangerous Energy Production Overseas: “Most Americans have never heard of the federal Export-Import Bank. Even fewer know that it doles out billions of dollars in corporate welfare to dangerous fossil fuel projects each year, harming local communities while worsening the global climate crisis with rising greenhouse gas emissions.” (Doug Norlen, “U.S. Should Pull Funding From Exxon’s Deadly Pipeline Project,” The Huffington Post, 7/2/14)

IT STILL MANAGES TO PUT ARKANSAS TAXPAYERS AT “SEVERE” RISK

The Bank Puts Taxpayers At “Severe” Risk: “The bank exposes taxpayers to the risk of “severe portfolio losses,” in the words of the bank’s own inspector general.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

Arkansas Taxpayers Are As Much At Risk As Taxpayers In Other States: “While businesses in most states barely benefit from the Ex-Im Bank at all, their taxpayers are just as exposed to Ex-Im Bank liabilities as taxpayers in states that receive the most Ex-Im Bank backing.” (Veronique de Rugy, “Ex-Im Funds Flow to Few States, but All Bear the Risk,” The Mercatus Center at George Mason University, 7/30/14)

“The Bank Will Cost Taxpayers Billions” Over The Next Decade: “Contrary to the picture presented by its strongly criticized reporting, the bank will certainly not return surpluses to the Treasury in the coming decade; even under generous assumptions, the bank will cost taxpayers billions of dollars over that time.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

The Bank Does Not Create “Profits” For Taxpayers: “The bottom line is that supporters of the Ex-Im Bank can no longer claim that these programs provide profits to the federal coffers. Numerous audits from its internal inspector general and external federal research offices agree that the bank’s risk analyses, default assumptions, internal reporting procedures, portfolio concentration, and general financial reporting are woefully inadequate to safely steward taxpayer funds and responsibly manage its vast portfolio.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

The Bank Is A “Burden” On Taxpayers: “Reports from federal research agencies and the bank itself are clear: far from being a cash cow for taxpayers, the Ex-Im Bank is likely to be a burden on them.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

THE VAST MAJORITY OF U.S. EXPORTS OCCUR WITHOUT HELP FROM EX-IM

The Bank Is Responsible For Only 2 Percent Of American Exports: “The Ex-Im Bank only extends financial assistance to a tiny proportion of total US exports. If export subsidies were truly critical to competing abroad, then one would expect far more than 2 percent of total US exports to receive Ex-Im Bank assistance. Yet, somehow the other 98 percent of unassisted US exports continue to thrive. Given this data, the argument that the bank’s activities are critical to maintaining competitive export outcomes is quite weak.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

The Bank “Influences A Negligible Portion Of Total US Exports”: “Export data from the US Census Bureau and the Ex-Im Bank between 2000 and 2010 show that Ex-Im Bank–backed activity accounts for approximately 2 percent of all US exports during that time. The same is true when looking at any individual year. Take 2012, for instance: total US exports were $2.2 trillion, while the estimated export value of Ex-Im Bank activity was about $50 billion, or around 2.2 percent of activity. The data reveal that the Ex-Im Bank influences a negligible portion of total US exports. What is more, it is possible that the private market could better employ these funds to support the same or even a higher level of exports. The bank cannot credibly claim that it is critical to maintaining the level of US exports.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

THE BANK PICKS WINNERS AND LOSERS

Ex-Im Hurts American Workers At Non-Subsidized Companies: “Foreign companies that receive Ex-Im Bank financing are not necessarily purchasing more goods from US firms, but simply buying different kinds of goods. Ex-Im Bank interventions shift resources away from unsubsidized projects and toward artificially inexpensive projects that the bank subsidizes. Many of the jobs the bank claims to create are in reality redirected from unsubsidized firms. The Ex-Im Bank disadvantages employees of unsubsidized companies for the benefit of employees of subsidized companies.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

The Bank Uses Misleading Numbers On How Many Jobs It Actually Supports: “The “205,000 jobs” claimed by the bank are not net jobs, as they do not incorporate the negative secondary effects that intervention often creates.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

Ex-Im Subsidies To One Company Mean Smaller Profits For Another: “A CBO report from 1981 explains that under normal economic conditions “subsidized loans to exporters will increase employment in export industries, but this increase will occur at the expense of non-subsidized industries: the subsidy to one industry appears on other industries’ books as increased costs and decreased profits.” (Veronique de Rugy, Andrea Castillo, “The US Export-Import Bank: A Review of the Debate over Reauthorization,” The Mercatus Center at George Mason University, 7/16/14)

FLASHBACK

President Obama Admitted That The Bank Is “Little More Than A Fund For Corporate Welfare”: “President Obama himself called Ex-Im “little more than a fund for corporate welfare” while on the 2008 campaign trail. (David Dayden, “Wingnuts and liberals’ bizarre role reversal: Why Export-Import Bank politics are so perverse,” Salon, 6/25/14)

So, Too, Did Bernie Sanders, One Of The Most Liberal Lawmakers In Washington: One of the most egregious forms of corporate welfare can be found at a little known federal agency called the Export-Import Bank.” (Sen. Bernie Sanders, “The Export-Import Bank: Corporate Welfare At Its Worst, Common Dreams, 5/15/02)

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