A new CEI study released today compiles ten reasons to abolish the Export-Import Bank. The bank subsidizes companies that export goods abroad, and foreign companies that buy those goods. Whatever the intentions behind the bank, the result is one of the federal government’s largest corporate welfare programs. Ex-Im did $37 billion of business in 2013, and has a total portfolio of nearly $140 billion.
Fortunately, unlike most other agencies, Congress has to reauthorize Ex-Im periodically or it must shut its doors. The next reauthorization vote must happen by September 30, or Ex-Im will cease to exist. The political battle over reauthorizing a previously obscure agency has become a flashpoint issue in the 2014 election. A few of the reasons the paper lists in favor of closing Ex-Im:
- Ex-Im favors some businesses and hurts others, often benefitting foreign firms rather than domestic ones. It has favored foreign airlines, such as Air India, Korean Air, and Ryannair, over domestic airlines, such as Delta Airlines.
- As many as 74 instances of fraud and bribery allegations involving Ex-Im employees have been made public over the last five years. For an agency with only 400 employees, this is a serious problem.
- Ex-Im also favors big businesses over small businesses. Ex-Im touts that the vast majority of its lending activities go to smaller businesses. But more than 80 percent of the bank’s financing, measured in dollars, goes to big firms.