Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at today's Monetary Policy & Trade Subcommittee hearing assessing reforms at the Export-Import Bank:
While I don’t often find myself in agreement with statements coming out of the Obama Administration, I have found occasion to agree with them on the market distorting power of the Export-Import Bank.
In a 2012 Treasury report to Congress the Obama Administration argued “There should be a level playing field for U.S. exporters, allowing them to compete based on the quality and price of their goods and services, rather than on the quality of any officially-supported financing.”
In addition, the President once described the Bank as “little more than a fund for corporate welfare.” I could not agree more.
The Bank picks winners and losers in our economy by providing loan guarantees, export credit insurance, working capital guarantees, and direct loans to American exporters and purchasers of U.S. exports.
Some of those winners have included the likes of Enron and Solyndra – hardly worthwhile investments on behalf of the American taxpayer. A review of the Bank’s top ten recipients includes companies like Boeing, General Electric and Caterpillar. I find it inconceivable that these companies would be in need of the government dole.
Put another way, the Bank ostensibly makes loans backed by taxpayers that the private sector is unwilling to make. If private creditors are unwilling to engage in these transactions, it begs the question why should the American taxpayer?
Some will argue that the Bank is self-sustaining, thus posing little risk to taxpayers. Unfortunately, we need not look past Fannie Mae and Freddie Mac, the National Flood Insurance Program, or the Federal Housing Administration to know that it is perhaps impossible to provide government backing at no risk to hardworking taxpayers.
I believe Ex-Im does pose risks to taxpayers and it could be doing more to mitigate those risks, many of which have been identified by the Inspector General. I want to thank the Inspector General and his team in particular for the important work that they have been doing to identify weaknesses in the Bank’s management of its portfolio.
By inserting political considerations into the market, the Bank’s activities do expose taxpayers to risks while producing a less efficient economy than would otherwise occur in a free market without the Bank’s interference.
I have long believed that many taxpayers feel that it is indeed time to EXIT the EXIM.