New Report Shows Taxpayers and Businesses Succeed Without Ex-Im Corporate Welfare

Apr 24, 2019 by AFP

A new analysis from the Mercatus Center examining the Export-Import Bank and the aftereffects of a years-long lending cap confirms what we’ve known all along: businesses do not need the Export-Import Bank to compete in the marketplace.

Since 2015, when Ex-Im last had the required number of board members to approve deals larger than $10 million, the Bank’s lending portfolio (both at home and abroad) has shrunk dramatically, resulting in myriad positive consequences for American taxpayers, consumers, and market competition broadly.  As shown in the report, U.S. exports have not suffered since the Bank’s forced decrease in aid, actually rising from $1.7 trillion in FY 2014 to $1.8 trillion in FY 2018. In other words, the absence of large Ex-Im loans has had not negative effect on U.S. exports.

What’s more, the report illustrates that since the lending cap went into effect, taxpayer exposure to risk has been severely diminished and the U.S. is sending less tax money to rich nations and their government-sponsored companies, namely China.  From FY 2014 to FY 2018, the Bank’s total loan approvals has dropped from $21 billion to just $3.6 billion, and its portfolio has almost halved from a peak in FY 2014 of $115.5 billion to $66 billion in FY 2018.

Additionally, despite having the second-largest economy in the world, China’s share of Ex-Im export authorizations was a whopping 11 percent in FY 2014.  After 2015 and the reduction in aid, China’s share has fallen to just one percent.  As Veronique de Rugy, one of the of paper’s authors puts it: “This amount is far more in line with the lack of risk in exporting from the largest to the second-largest economy in the world.”

The Ex-Im Bank has long been a poster child for inexcusable government favoritism which undermines competition and job creation. Allowing the bank to fully expire at the end of this fiscal year would be a modest, but meaningful first step towards leveling the playing field so all American businesses and taxpayers can compete and succeed.

Sign here if you think it’s time to end all cronyism and level the playing field in the American economy!