Dear Representative Amash and Senator Lee:
On behalf of more than two million Americans for Prosperity activists in all 50 states, I applaud you for introducing legislation to wind down and ultimately terminate the Export-Import Bank, the official credit agency of the United States (H.R.2263, S.1102). Ex-Im is exactly the kind of government meddling in the economy that free market advocates should forcefully reject.
President Obama was correct when he called the Ex-Im bank “little more than a fund for corporate welfare,” when campaigning in 2008. The bank subsidizes a small number of politically-connected companies, and then passes the risks and costs onto American taxpayers. Proponents claim that the bank supports small businesses, but data show that merely 10 large corporations command 90% of its loans. Even more alarming, the bank has been linked to scandal-ridden, government-backed bad investments such as Enron and Solyndra.
Ex-Im’s financial future is concerning. The bank uses outdated accounting methods to overstate its profits, as the Congressional Budget Office has pointed out. According to a recent Massachusetts Institute of Technology study, the bank is actually losing $200 million a year when using fair-value accounting analysis.
Left liable for these risky loans and guarantees is the American taxpayer. The lesson from the recent Fannie Mae and Freddie Mac fiasco is clear: financial institutions that do not follow market-based principles often cannot survive without a big taxpayer bailout. Taxpayers already rescued the failing bank once, costing $3 billion in 1987; they shouldn’t have to bail it out again.
Americans deserve a fair international trade policy that is based on free market principles, not paying foreign companies to buy our exports. Americans for Prosperity is proud to support H.R.2263 and S.1102, your legislation to terminate the Export-Import Bank. I urge your colleagues to support their passage, and I look forward to working with you in the future.
Christine Harbin Hanson
Americans for Prosperity