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Tuesday, June 11, 2013

Senator Mike Lee and Representative Justin Amash seek to abolish the Export-Import Bank

   

The CATO Institute has a special project called Downsizing The Federal Government.
One of their areas of focus is the Export-Import Bank. Here is an overview of their study:

Overview

The Export-Import Bank is a federal agency that subsidizes the financing of U.S. exports. The Bank was created eight decades ago to faciliate trade with the Soviet Union, but the need for such a government agency has always been doubtful. Indeed, the financing of international trade is carried out routinely and efficiently by private sector financial institutions. By inserting a federal agency into the financing of trade, policymakers risk distorting markets and generating political cronyism.
The bank has a dual mandate to finance projects that the private sector deems too risky and lend only when there is a reasonable chance of repayment. Those mandates seem contradictory. If the private sector has reservations about the viability of a project, it is probably too risky and doesn't make economic sense. On the other hand, if a project is sensible and creditworthy, then a private financial firm can be expected to step in.
This essay discusses the shortcomings of the Export-Import Bank, and argues that the agency should be terminated. Any benefits bestowed by the bank on particular businesses are more than outweighed by the broader economic costs and political problems that the bank creates. Besides, only a small share of U.S. exports are supported by the Ex-Im Bank, so overall international trade would not be affected very much either way if the bank were ended.
You can give their site a hit and read the rest of the study HERE.

Thankfully, Senator Mike Lee and Representative Justin Amash, both of whom have maintained 100% Lifetime FreedomWorks scores, have introduced legislation to repeal the Ex-Im Bank.

Here is the official press release:

Lee, Amash Introduce Export-Import Bank Repeal

WASHINGTON – Today, Senator Mike Lee (R-UT) introduced legislation to repeal the authority of the Export-Import Bank of the United States and create a defined process for the phasedown of the bank.  Congressman Justin Amash (R-MI) introduced companion legislation in the House of Representatives.“The Export-Import Bank is a source of corporate welfare that puts taxpayers at unnecessary risk,” said Senator Lee.  “Instead of subsidizing exports, which encourages an international corporate subsidy bidding war, we should be using multilateral agreements to eliminate business subsidies in all nations.  The Ex-Im Bank has outlived its usefulness and it’s time to end the Bank’s market distortion and political cronyism.”“The Export-Import Bank has always been a bad idea and needs to be shut down,” Rep. Amash said.  “Export subsidies, like those provided by the Export-Import Bank, serve only to enrich well-connected special interests at the expense of the rest of the country.”
The Club for Growth also issued a statement of support:
Club for Growth Urges Passage Of Lee-Amash Bill To Repeal Export-Import Bank 
“Senator Mike Lee and Congressman Justin Amash are true champions of economic freedom, so it’s no surprise that they would go to bat for the taxpayers and seek an end to the Export-Import Bank,” said Club for Growth President Chris Chocola. “Even President Obama has called the bank nothing more than a slush fund for corporate welfare. The Club for Growth strongly supports the efforts of Senator Lee and Congressman Amash to end these taxpayer-backed subsidies once and for all.”
You can read the legislation and the status of it by following these links:


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