The inescapable reality of the situation is that Ex-Im’s financing typically do more harm than good. Over the long-term, these loans add up to billions of dollars going to our foreign competitors. No sector of the economy has suffered more than the airline industry, which has lost as many as 7,500 jobs and as much as $684 million according to some estimates. In 2012, the Export-Import Bank approved $11.6 billion of below-market financing to airlines in 21 different countries, meanwhile American carriers are precluded from buying the planes at this same discounted rate. The advantage helps foreign airlines boost their profit margins and makes it more difficult for those in America to compete.
Ex-Im allows the government to selectively pick winners and losers with its financing. But it is not risk free, posing a substantial threat to the American taxpayer who guarantees all of these loans. It is true that Ex-Im Bank is currently in the black, but so were Fannie Mae and Freddie Mac up until they required one of the largest bailouts in American history.
House Democrats would lead you to believe that Ex-Im is instrumental in supporting America jobs and exports. The truth is a select few companies profit immensely from the status quo, starting with Boeing. So much so, the Export-Import Bank is known as “Boeing’s Bank.” In fact, Boeing had revenue north of $80 billion last year and received more than 80 percent of Ex-Im’s total loan guarantee portfolio in 2012.
The Export-Import Bank most recently celebrated its 80th anniversary, which means this federal agency has been distorting free markets, subsidizing Fortune 50 companies and advancing foreign corporations interests for a very long time. It is time to put this cronyism to rest and Congress can start by refusing to reauthorize the Export-Import Bank’s charter.
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