Diane Katz: Eliminate the Ex-Im Bank

Readers deserve more information about the debate over reauthorization of the Export-Import Bank than was provided in “Kan. businesses claim stake in bank debate” (May 4 Eagle).

The article speculated on the fate of small businesses if the Ex-Im Bank is not reauthorized. However, the bank assists just one-half of 1 percent of all U.S. small businesses, and 98 percent of all U.S. exports are accomplished without Ex-Im subsidies.

Eagle readers also should know that the vast majority of Ex-Im transactions – for which taxpayers are ultimately on the hook – benefit multinational corporations that could easily access private financing to maintain exports, including Boeing ($91 billion market capitalization), General Electric ($267 billion), Bechtel (2013 revenues: $39.4 billion) and Caterpillar (2013 sales and revenues: $55 billion).

Ending Ex-Im subsidies for these multinationals will not hurt the small businesses that operate as suppliers. The economic activity subsidized by Ex-Im would occur absent bank financing. Indeed, U.S. exports have reached record-high levels in recent years, reflecting no shortage of private export capital. Several of the largest beneficiaries operate financing subsidiaries of their own.

On the other hand, Ex-Im financing actually puts small businesses and U.S. workers at a disadvantage against overseas competitors. By providing billions of dollars in subsidies to foreign firms, the competitive field is tilted against U.S. companies that pay market rates for financing.

Contrary to the article, Ex-Im does not return hundreds of millions of dollars to the U.S. Treasury. In fact, the bank will cost taxpayers some $2 billion in the next 10 years – not including possible bailouts from loan defaults, according to the Office of Management and Budget.

The bank is neither the biggest nor worst manifestation of corporate welfare. But change in Washington, D.C., rarely occurs on a grand scale, and Ex-Im is a practical and rational target for elimination.

If lawmakers cannot end this relatively small subsidy – one that would have little impact on its beneficiaries – what hope is there of ever containing the unparal-leled expansion of government?

This story was originally published May 13, 2015 at 7:02 PM with the headline "Diane Katz: Eliminate the Ex-Im Bank."