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The House Financial Services Committee remains divided, largely along party lines, over whether to renew the charter of the Export-Import Bank of the United States.
June 25 -
A confluence of events, including the defeat of House Majority Leader Eric Cantor, has increased the chance that Congress won't renew the charter of the Export-Import Bank. Private banks receive billions of dollars in U.S. support for loans made to promote American exports.
June 24 -
Senate Democrats plan to introduce to an amendment to a new jobs bill that would extend the charter of the Export-Import Bank for another four years and raise the bank's lending limit by 40%, to $140 billion.
March 15 -
Banks add expertise, services for trade finance boom.
July 29
Federal government programs often seem to run on autopilot. But that may be about to change for the Export-Import Bank, a long-entrenched Washington institution. Known as Ex-Im for short, the bank is an 80-year-old agency that subsidizes financing for U.S. exporters. Unlike most other agencies, Ex-Im will cease to exist unless Congress periodically reauthorizes it. The next deadline is on September 30, and some Republicans are pushing to shut it down.
Critics of the Ex-Im bank argue that it is as a huge corporate welfare program that puts tens of billions of taxpayer dollars at risk to subsidize large companies that don't need the help. They're right. And the case for Ex-Im gets flimsier by the day.
While Ex-Im made direct loans worth $6.9 billion in 2013, its
Ex-Im loan guarantees flow to a relatively small handful of firms. Boeing alone
Ex-Im's defenders say it supports 205,000 American jobs by funneling business to American companies. But as economist Veronique de Rugy of the Mercatus Center at George Mason University calculates, each of those jobs cost an average of
Another serious problem with Ex-Im and programs like it is corruption, which has gotten so bad that the House has launched an
Former Ex-Im employee Johnny Gutierrez allegedly accepted cash payments from an executive of a Florida-based construction equipment manufacturer that has received Ex-Im financing on multiple occasions. In a July 28 congressional hearing, Gutierrez chose to
These are not isolated incidents.
Ex-Im also imposes significant opportunity costs on the economy. Companies have only so many resources at their disposal. The more time and effort a business spends lobbying agencies like Ex-Im, the less it can spend innovating and creating value for consumers.
It is too early to tell which side will prevail. But if Ex-Im closes, it will be a major victory for taxpayers and clean government.
Ryan Young is a fellow at the Competitive Enterprise Institute and author of the study "