General Electric

Big businesses are Export-Import Bank’s biggest clients

One of the driving arguments behind authorization of the Export-Import Bank is the agency helps American businesses promote their goods across the global. This, supporters argue, includes helping smaller firms which would otherwise be able to compete.

In its statement of support for the 2012 Export-Import Bank Reauthorization Act, the U.S. Chamber of Commerce argued that that the federal agency is “especially important to small- and medium-sized businesses, which account for more than 85 percent of Ex-Im’s transactions.”

“Failure to enact this bill,” the Chamber ominously warned, “would put at risk the nearly 300,000 American jobs at 3,600 companies that depend on Ex-Im to compete in global markets.”

But a recent look at the Export-Import Bank’s finances in FY 2013 finds that the biggest beneficiaries of the agency’s largess were larger business, in fact, some of the United States most recognizable names.

“[T]he Bank truly lives up to its nickname, ‘Boeing’s Bank.’ Boeing was by far the biggest exporter beneficiary of all Bank activity, raking in over $8 billion in assistance during FY 2013,” wrote Veronique de Rugy, a senior research fellow at the Mercatus Center. “The Bank’s second top overall exporter beneficiary is alarming: the Bank’s data simply lists several exporters as ‘Unknown.’”

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Export-Import Bank

There are countless examples of cronyist policies passed by Congress. Some would point to bailouts for Wall Street and automakers, while others would remind us of the loans and subsidies for green energy companies. While these are all good examples of cronyism and corporate welfare that are frequently mentioned by critics, the Export-Import Bank is frequently overlooked.

Authorized by Congress in 1945 to promote goods and services produced in the United States to be sold across the world, the Export-Import Bank (Ex-Im Bank) has become a source for bureaucrats to pick winners and losers in the market place and politically-connected businesses to take advantage of taxpayers.

Back in December, Pete Sepp, Executive Vice Chairman of the National Taxpayers Union, noted the Ex-Im Bank has a history of subsidizing failed firms — with a $10 million loan to Solyndra serving as an example — as well as giving money to profitable businesses, including Boeing, General Electric, Caterpillar, and Dell.

“In order to keep its portfolio from sagging and putting taxpayers on the hook for future Solyndras, the bank must often invest in large, established firms that are already highly profitable. Over the years this has included firms such as General Electric, Caterpillar, and Dell,” wrote Sepp. “Another example is aerospace giant Boeing. In 2012, nearly 83 percent of the loan guarantees issued by the Ex-Im Bank benefitted Boeing, meaning of the $14.7 billion in loan guarantees, $12.2 billion helped bolster the company’s sales.”

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