Tuesday, June 30, 2015

Corporate welfare takes a blow

The Washington Examiner reports:

The Export-Import Bank is down.

At the stroke of midnight Tuesday night, Ex-Im's congressional authorization will expire. The federal agency, which subsidizes U.S. exporters and lenders through taxpayer-backed financing to foreign companies and governments, officially enters liquidation.

Legally, Ex-Im's officers, employees and board members must cease their typical work of subsidizing Boeing, J.P. Morgan and Chinese state-owned enterprises. Instead, under the law that authorized it, Ex-Im is allowed to exist only "for purposes of orderly liquidation, including the administration of its assets and the collection of any obligations held by the bank."

U.S. taxpayers are exposed to more than $100 billion in outstanding Ex-Im loans, guarantees and credit insurance, and agency employees are allowed to administer and collect the outstanding money and fees. But, if the words "orderly liquidation" hold their normal meaning, Ex-Im is also supposed to sell off its assets — that is, it should dump its loans into the private sector, and hand the cash over to the Treasury.

The rent-seeking Ex-Im will try and make a comeback, sadly, this summer on a continuing resolution. We hope we are wrong.