TAXPAYER WATCHDOG GROUP CALLS FOR REDUCTION IN OPIC APPROPRIATION

For Immediate Release Contact: Jim Campi
July 23, 1997 (202) 467-5300

(Washington, D.C.) – At a Capitol Hill news conference today, Council for Citizens Against Government Waste (CCAGW) President Thomas A. Schatz was joined by Members of Congress and representatives of the Stop Corporate Welfare Coalition to urge the House of Representatives to pass the Royce-Andrews-Kasich Amendment to the FY 1998 Foreign Operations Appropriations bill.  The amendment would cut administrative funding for the Overseas Private Investment Corporation (OPIC) from $32 million to $20.8 million.

OPIC is a classic example of corporate welfare and is one of twelve programs specifically targeted by the Stop Corporate Welfare Coalition.  OPIC provides direct and guaranteed loans as well as insurance for risky corporate ventures overseas.

“Nobel Prize-winning economist Milton Friedman has called OPIC ‘a serious mistake’ and labeled it ‘special-interest legislation of the worst kind,’” Schatz stated.  “Cutting OPIC’s administrative funding is the first step toward eliminating the program altogether.”   

Passage of the amendment would bring OPIC’s administrative funding in line with its stated costs and its current insurance and loan programs.  In FY 1994, OPIC’s current insurance and loan caps were established and administrative expenses were capped at $20.8 million.  Since that time, OPIC’s loan and insurance levels have not increased.

“So why should OPIC receive a 50 percent increase in its administrative appropriation when there is no increase in loan or insurance expenditures?” Schatz asked. OPIC should not get that increase and the Royce-Andrews-Kasich Amendment will ensure that it does not.” 

Rarely do small companies in need of investment capital benefit from OPIC programs.  Last year, 41 Fortune 500 companies benefited, while only three “small” businesses received help.  U.S. conglomerates lining up at the public trough have included AT&T, Coca-Cola, McDonald’s, and Citicorp. 

“If these companies want to invest overseas, then they can easily afford to acquire loans and risk insurance from private sector-providers of these services.  There is no need to hit up the American taxpayers,” Schatz said.  “We’ve ended welfare for the poor, it’s time to end welfare for wealthy corporations.”

CCAGW is a 600,000-member organization dedicated to enacting legislation to eliminate waste, fraud, abuse, and mismanagement in the federal government.  For more information or to arrange an interview please call Jim Campi at (202) 467-5300.

 

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