The Export-Import Bank will seek a $3-billion bailout from Congress next month to counter the loss of hundreds of millions of dollars in capital, the federal agency's president said in a report published today.
John A. Bohn Jr. told the New York Times that he will report to Congress next month that the bank's capital has fallen below $1.4 billion, half its 1983 level, and will be wiped out within nine months.
The bank helps finance U.S. exports.
Bohn said he would welcome the debate expected to follow his request.
"The taxpayer has the right to know what this activity is costing," he said.
Since the early 1980s the bank has lost an average of $250 million to $300 million a year. For the fiscal year that ended Sept. 30, the bank's loss was a record $387 million.
Bohn estimated in September that the bank's reserves of $1.77 billion will be gone in less than two years.
According to the newspaper, the red ink is due to loans made in the late 1970s and early 1980s when interest rates soared. The bank lends to customers of U.S. exporters at rates below the cost of the money it borrows from the Treasury.
Bohn told the newspaper last week that taxpayers have paid between $2 billion and $3 billion over the last 50 years for the subsidies.
But it has resulted in $190 billion in exports, Bohn said, adding, "spending $3 billion to facilitate $190 billion is not bad as government programs go."