The vast majority of loans and guarantees from the Export-Import Bank of the United States, created 80 years ago to help U.S. companies compete overseas, go to a handful of corporate giants such as Boeing Co. and General Electric Co., spurring a debate in Congress over whether the program amounts to corporate welfare and should end.
With lawmakers set to decide the bank’s future by September, a coalition of major political organizations is poised Monday to ask Congress to oppose the reauthorization on grounds that the program’s benefits no longer justify taxpayers’ expense.
A review by The Washington Times of Export-Import long-term loans and guarantees last year found that out of over $19 billion loans and guarantees granted by the Ex-Im, almost $8.3 billion, or 44 percent, went solely to Boeing projects.
More than $1 billion in loans and/or guarantees went to three other companies: $1.8 billion to Bechtel and $1.64 billion to Fluor, both engineering and construction companies, and $1.5 billion to oil giant Pemex, a Mexican firm that must use its loans and/or guarantees to purchase U.S. goods and services.
The Times’ review mirrors research by the Mercatus Center at George Mason University, which found the Ex-Im Bank gave roughly 90 percent of its $13 billion in loans and guarantees in 2010 to 10 major corporations, with Boeing topping the list.
The other major corporations that received the bulk of the Ex-Im’s funding in 2010 included General Electric ($2.6 billion), Bechtel ($1.8 billion), technology manufacturer Applied Materials Inc. ($1.5 billion) and heavy-machinery maker Caterpillar Inc. ($1.3 billion).
“Our view is that the Ex-Im bank is little more than corporate welfare that distorts the market, costs American jobs and puts taxpayers on the hook when things go wrong,” said Levi Russel, director of public relations at Americans for Prosperity, one of the conservative groups leading efforts to kill the bank.
Critics also accuse the Ex-Im Bank of distorting the market in ways that hurt American companies other than those it subsidizes.
A letter to Congress authored by a coalition of 30 taxpayer advocacy groups notes that the subsidies for U.S. airplane exports aid U.S. plane manufacturers at the expense of U.S. airlines that have to compete with foreign airlines that buy Boeing’s planes. According to the letter, Airlines for America estimates that recent loans from the Ex-Im bank to foreign airlines have killed as many as 7,500 jobs for workers at U.S.-flag airlines.
“By paying foreign companies to buy American exports, the Export-Import Bank tilts the playing field away from mid-sized and small businesses in favor of large, politically connected corporations,” the coalition’s letter said.
Ex-Im officials argue that the loans and guarantees substantially increase foreign markets for U.S. companies and keep good-paying jobs in America.
“Ex-Im Bank proudly stands behind its 80-year track record of supporting American jobs through exports. We supported nearly 1.2 million jobs here at home over the last five years, including 205,000 American jobs last year alone,” said Matthew Bevens, a spokesman for the Ex-Im Bank. “We continue to level the international playing field and expand growth opportunities for thousands of U.S. companies, nearly 90 percent of which are American small businesses.”
Officials at the bank say the mission is to help manufacturers of all sizes finance shipments to international markets. According to the bank’s website, the Ex-Im bank approved 3,413 small-business authorizations in fiscal 2013. The majority, 1,923, were worth less than $500,000 each.
Mr. Bevens told The Times that the bank is fiscally responsible because the greater part of its work is either in granting loans directly or in “co-signing” loans as a guarantor. In either case, the corporate recipient must repay the loan and the taxpayer loses only when the company defaults, which is rare.
The bank said it has “sent more than $1 billion to the U.S. Treasury in 2013 — an all-time record — for deficit reduction, and we did so with a historically low active-default rate of less than one quarter of one percent.”