Jul 20, 2016
Corporate Welfare Spending Alert!
Post by Freedom Partners
Last week a congressional committee responsible for funding government programs passed an amendment that, if enacted into law, would make it easier for the U.S. Export-Import Bank to authorize billions of dollars in corporate welfare.
The Ex-Im Bank is a federal agency that provides credit, insurance and loans—all guaranteed by hardworking taxpayers—to foreign and domestic companies in an effort to promote U.S. exports. When a company defaults, American taxpayers foot the bill. When a company earns money from the transaction, it keeps the profits.
The Ex-Im Bank’s board of directors currently has just two members and three are required for a quorum to authorize taxpayer-backed deals worth more than $10 million. U.S. Sen. Richard Shelby, chairman of the Senate Banking, Housing and Urban Affairs Committee, has opposed additional Ex-Im board appointments, thereby imposing an important limitation on a federal agency that has come to symbolize corporate welfare and corruption.
The provision passed last week by the U.S. House of Representatives Appropriations Committee would change the bank’s quorum requirements.
If the provision becomes law, it will open the floodgates to billions of dollars in corporate welfare—much of it supporting some of the world’s largest and most well-financed companies.
Just how significant is this threat. According to an April report in The Wall Street Journal:
“In the fiscal year ended last September, the bank authorized 140 deals of more than $10 million. While that represents just 5% of all transactions approved, it is 80% of all transactions by dollar volume.
“Almost half of those transactions were with firms buying products from Boeing. Other companies that exported goods to Ex-Im Bank customers on deals that needed board approval last year included General Electric Co., Lockheed Martin Corp.’s Sikorsky unit, and Acrow Corp. of America, a bridge manufacturer.”
At this time, it is uncertain whether the appropriations bill to which the Ex-Im provision was attached will be completed by Congress before the current fiscal year ends on September 30. If it isn’t, Ex-Im supporters will likely push to have the language included in a massive, catch-all, omnibus spending bill. These bills—which are passed without adequate deliberation and loaded with special-interest provisions—are one reason Freedom Partners has called on Congress to enact a continuing resolution that provides two years of funding at levels already set by law.