Bills
| 3.23.22

Shutting Down the Export-Import Bank in 3 Years (H.R. 1605)

Do you support or oppose this bill?

What is H.R. 1605?

(Updated April 9, 2018)

This bill would abolish the Export-Import Bank in three years , and reduce the authorities of the Bank in the interim period. The Export-Import Bank was reauthorized in September 2014 for nine months — due to expire on June 30, 2015.

Established in 1934 by President Franklin D. Roosevelt, the Export-Import Bank, is self-described on its website as: 

"The official export credit agency of the United States. EXIM is an independent, self-sustaining Executive Branch agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services ... When private sector lenders are unable or unwilling to provide financing, EXIM fills in the gap for American businesses by equipping them with the financing tools necessary to compete for global sales."

Basically, the bank guarantees loans for customers abroad buying U.S.-made goods who otherwise would not take the commercial or political risks.

This bill would keep the Export-Import Bank from accepting new applications 30 days after it passes. One year in, the bank could no longer renew or enter into contracts. At the end of three years, the Bank’s remaining functions would be transferred to the Department of the Treasury — which at that point would be limited to loan repayment and oversight. The Export-Import Bank’s Office of the Inspector General would be abolished along with the Bank, and the Department of the Treasury would also take over ongoing audits, investigations, inspections, and reports.

The Secretary of the Treasury would be responsible for winding down the Bank’s operations, and have the authority to delegate tasks, transfer assets and personnel, enter into contracts, and employ experts to aid in those activities. Once all of the Bank’s obligations expire, the Treasury’s authorities would expire as well, and the Secretary would notify Congress.

Assets and funds that are currently available to the Bank could continue to be used for the three years, and existing savings provisions would be in effect until the Bank is finally terminated.

Argument in favor

The Export-Import Bank is nothing more than taxpayer-backed corporate welfare. Export subsidies — like those provided by the Ex-Im Bank — don’t create jobs, and only fuel an international subsidy bidding war.

Argument opposed

With many of our economic competitors subsidizing their exports, failing to follow suit through the Ex-Im Bank would cost the U.S. jobs and hit small businesses the hardest. In uncertain economic times, those are consequences we can’t afford.

Impact

Domestic and international companies that do business with the Export-Import Bank, the Export-Import Bank and its employees, the Department of the Treasury, Congress, and the Secretary of the Treasury.

Cost of H.R. 1605

A CBO cost estimate is unavailable.

Additional Info

In-Depth: After introducing similar legislation during the 113th Congress, this bill’s sponsor Rep. Justin Amash (R-MI) noted:

“The Export-Import Bank has always been a bad idea and needs to be shut down. 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 Export-Import Bank (or Ex-Im Bank) has been criticized as "corporate welfare"  because several of the companies benefitting from its existence are among the largest corporations in the U.S. About 40 percent of the Ex-Im Bank’s 2014 authorizations benefited Boeing alone, and nearly two-thirds of the Bank’s 2013 money went to 10 U.S. companies, including General Electric, Caterpillar, and Ford along with Boeing. Of the $2.3 trillion that the U.S. exported in 2013, the Ex-Im Bank only approved $27.3 billion of loan guarantees — amounting to about 1.2 percent of the value of that year’s exports.

Proponents of the Ex-Im Bank point out that nearly 90 percent of the Bank’s total transactions involved small businesses, and in 2014 those transactions were valued at about $5 billion, making up around 20 percent of the total value of the Bank’s activity that year. It has also been noted by the Bank’s supporters that these activities supported over 160,000 U.S. jobs in 2014.


Of Note: In addition to doubts about the Ex-Im Bank’s benefits, it has been maligned for its cost — its price tag was estimated at $2 billion between 2015 and 2024 by the Congressional Budget Office.

Doubts about the long-term survival of the Ex-Im Bank date back at least as far as December 2011, when the White House drafted a contingency plan to be put into place if Congress failed to authorize the Bank’s appropriations during that budget cycle.

Media:

Summary by Eric Revell
(Photo Credit: Flickr user Tim Evanson)