Congress Rewards Mediocrity

Yesterday, the House Financial Services Committee’s Subcommittee on National Security, Illicit Finance, and International Financial Institutions held an oversight hearing on the Export–Import Bank of the United States. The sole witness: former Ex–Im Chairman John Jovanovic, who sat before legislators to discuss the Export–Import Bank Reauthorization Act of 2026. I have written some thoughts about this here and here and here.

I want to point to a submission for the record by Bryan Riley of the National Taxpayers Union that deserves attention because virtually everything in it has been documented, warned about, and ignored for years.

Riley’s testimony is concise. He makes three points. First, Ex–Im’s mission creep is real: In 2022, the bank bypassed Congress and expanded from export-financing into subsidizing domestic manufacturing through its “Make More in America” initiative — a program with no direct export requirement and no congressional authorization. Second, the bank hides the true cost of its lending from taxpayers by using Federal Credit Reform Act accounting instead of fair-value accounting. Under FCRA, Ex–Im’s projected $16 billion loan book looks like a $600 million moneymaker for the government. Under fair-value, which is the method that accounts for market risk the way a private lender would, it is an estimated $200 million subsidy, or cost. Third, Congress has called for negotiations to eliminate predatory export subsidies since the Carter administration. Decades later, those negotiations have produced nothing.

The mission-creep problem did not begin with “Make More in America.” It is the defining feature of an institution that has spent nine decades attaching itself to whatever policy priority dominates the headlines. In 2019, it was competing with China. Congress gave Ex–Im a seven-year reauthorization and a brand-new strategic mandate: the China and Transformational Exports Program, with a $27 billion target; 20 percent of the bank’s total lending authority. 

The chairman of the committee praised the CTEP program yesterday and said he was eager to see it renewed. Why? He must not have looked at what that program has achieved. Here is what’s happened so far:

By 2024, after five full years, cumulative CTEP lending reached $5.9 billion, about 22 percent of what Congress envisioned. The Bank’s own Inspector General found that the program was strategically rudderless. Export-finance bankers told Global Trade Review the program was “struggling to gain scale.” The reasons for the CTEP shortfall are numerous. Yes, the Bank’s domestic-content requirements and default rate caps create friction. The few companies in CTEP’s target sectors that sought to benefit from the government perk often went to the Department of Energy instead, which offered financing with fewer strings attached. And yes, the next reauthorization might loosen these constraints. But the deeper problem is that financing was never the bottleneck to achieving the program’s stated aims. Consider one of the sectors Congress wrote into CTEP: artificial intelligence. This is an industry for which the prevailing worry today is that too much private capital is chasing too few viable projects.

No one cares that this program was a bust, even measured against its own goals. Its failure doesn’t mean that the special interest groups that benefited from the program didn’t like having preferential terms. And the fact that beneficiaries of government largesse say that they like a program isn’t a sign that it is a net positive for the country, or that it should be renewed.

But we are in Washington, D.C., and Congress rewards failure. So, in 2026, Ex–Im is being given more to do. The new pitch doubles down on the China mandate with a critical minerals twist: Project Vault, for instance, is a $12 billion civilian stockpile backed by a $10 billion Ex–Im loan, the largest in its history. 

In addition, Senators Kevin Cramer (R., N.D.) and Mark Warner (D., Va.) want Congress to reauthorize the bank for a decade and raise its lending cap by $70 billion, from $135 billion to $205 billion.

The numbers alone should give lawmakers pause. Ex–Im’s current exposure is roughly $35 billion against a $135 billion cap. That is 25 percent of capacity. The bank is sitting on $100 billion in unused headroom. It failed to spend its China mandate. And the proposed solution is to hand it another $70 billion and a longer leash.

Insane.