CBO on the Real Costs of the Ex-Im Bank
If you’ve heard the argument from Export-Import Bank proponents that the Bank profits the American people, you should see this:
Indeed, the bank’s purported profitability has been a major theme of proponents’ campaign to win bank reauthorization from Congress before its charter expires on September 30.
But in a major embarrassment for the bank and its allies—and a victory for government transparency and accountability—the Congressional Budget Office (CBO) on Thursday reported that Ex–Im programs actually operate at a deficit that will cost taxpayers some $2 billion in the next decade (in addition to the bank’s operating costs).
The bottom line: If forced to apply the stricter accounting rules required of private firms, Ex–Im would be overstating its profitability by $16 billion during the next decade: Instead of a 10-year surplus of $14 billion, the bank would incur a loss of $2 billion.
Upon the release of this CBO report, Heritage Action CEO Michael A. Needham remarked:
The Congressional Budget Office debunked one of the main arguments deployed by proponents of the Export-Import Bank. Under fair-value rules, the Export-Import Bank is a cost to taxpayers. Today’s report makes clear those who wish to argue in favor of reauthorizing the Bank must do so on the grounds that market disruption, taxpayer risk and cronyism are laudatory, not on the grounds of budgetary savings.
Rather than forcing the American people to pay as the CBO’s predictions come true, politicians in Washington should let the Ex-Im Bank come to a long overdue end when its charter expires this fall.