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The Bank does not support small businesses. Most of the Bank’s funding goes to large corporations such as Boeing—a recipient of 68 percent of EXIM’s loan guarantees and 30 percent of EXIM’s overall activities.” Over the years, 10 large domestic corporations have received roughly 65 percent of the Bank’s total assistance (it is closer to 70 percent today). More than 99.9 percent of U.S. small businesses receive no benefits from EXIM and are often placed at a competitive disadvantage by the subsidies doled out to larger competitors. In fact, the Bank’s support for small businesses has declined from $2.3 billion in FY 2019” to “more than $2.0 billion” in FY 2020” to only $1.6 billion in FY 2021.” This decline occurred amid a pandemic that hit small businesses especially hard, and it continues today.

The Bank is not a good deal for taxpayers. The Bank’s accounting practices are deficient, and the Bank miscalculates its budget savings. While it claims that its operations will save taxpayers $14 billion over the next decade, the Congressional Budget Office has found that EXIM programs will actually cost taxpayers $2 billion.2° Numerous audits done by the Bank’s internal inspector general also show that the Bank’s risk analyses, default assumptions, internal reporting procedures, and financial reporting practices are not reliable enough to ensure the safe stewardship of taxpayer funds and responsible management of EXIM’s vast portfolio.””

FAILING TO MEET THE CHINA CHALLENGE

These days, to get whatever expansion of government one wants or to justify anew government activity, one has only to declare that more government intervention is needed to help fight China. President Trump used this argument to secure reauthorization of EXIM in 2019. Today, President Biden argues that the Bank could be a powerful weapon in the government’s geoeconomic arsenal against China.

The rationale is that this will prevent China from dominating the global market with its subsidies and will boost American jobs and manufacturing. The problem is that cynics who support such policies make no effort to adopt a serious strategic plan to achieve this goal. For instance, how can EXIM help us to fight China while state-owned Chinese companies like China Air have been some of the companies most subsidized by EXIM?” Furthermore, it has now been four years since Congress instructed EXIM to focus on China, but there has been no fundamental change in the way EXIM operates or the companies to which it extends taxpayer-backed financing: Deals related to the aircraft industry still dominate the Bank’s portfolio.

In addition, there is no evidence that EXIM has altered its intense focus on competing with other governments’ ECAs. If the Bank were serious about competing against China, it would be targeting the low-income markets where China