150 International Affairs:Eliminate the Overseas Private Investment Corporation

Savings in Millions of Dollars
  • 2016
  • 2017
  • 2018
  • 2019
  • 2020
  • 2021
  • 2022
  • 2023
  • 2024
  • 2025
  • 2016-2020
  • 2016-2025


Calculations rely on the FY 2014 enacted amount of $210 million in net revenue, as found on page 4 of the Overseas Private Investment Corporation’s “Congressional Budget Justification: Fiscal Year 2015,” This level of revenue has been increased at the same rate as discretionary spending in the CBO’s most recent August 2014 baseline spending projections.


Technical Notes on Scoring

CBO Baseline

Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.

Savings “Totals”

While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.

First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.

Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs.  Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.


Heritage Recommendation:

Eliminate the Overseas Private Investment Corporation. While the CBO’s methodology scores this recommendation as costing the government about $2.2 billion over 10 years, eliminating OPIC is consistent with the important goal of reducing the size and scope of government.


Taxpayer funding for Papa John’s in Russia & Ritz-Carlton hotels in Turkey? How to save billions

OPIC was created in 1969 by the Nixon Administration to promote investment in developing countries. OPIC provides loans and loan guarantees; subsidizes risk insurance against losses resulting from political disruption, such as coups and terrorism; and capitalizes investment funds. The private market also offers these services, but OPIC offers them at a discount (subsidy) that does not fully account for risk. By putting the taxpayer on the hook for this exposure, OPIC privatizes profits while socializing risk.

Some OPIC projects do not meet the program objective of decreasing poverty in developing countries, including:

  • $67 million to finance 13 projects in the Palestinian territories while a unity government was formed with Hamas
  • Financing for Papa John’s pizza franchises in Russia
  • $50 million of financing for a Ritz-Carlton hotel in Istanbul, Turkey

Milton Friedman criticized the agency in 1996 as follows: “I cannot see any redeeming aspect in the existence of OPIC. It is special interest legislation of the worst kind, legislation that makes the problem it is intended to deal with worse rather than better…. OPIC has no business existing.”

Taxpayer funding for Papa John’s in Russia & Ritz-Carlton hotels in Turkey? How to save billions

Contributing Expert

Brad Watson served as Senior Policy Services Advisor in Policy Promotion during the production of The Budget Book. He has since left The Heritage Foundation for a new position

Brad WatsonSenior Policy Services Advisor

Heritage Experts

Brett D. Schaefer is the Jay Kingham Fellow in International Regulatory Affairs at Heritage's Margaret Thatcher Center for Freedom.

Schaefer analyzes a range of foreign policy issues, focusing primarily on the United Nations and affiliated funds and programs. He frequently speaks and publishes on issues related to the world body and its activities.

See publications by Brett D. Schaefer

Brett D. SchaeferJay Kingham Fellow in International Regulatory Affairs at Heritage's Margaret Thatcher Center for Freedom

Diane Katz, who has analyzed and written on public policy issues for more than two decades, is a research fellow in regulatory policy at The Heritage Foundation.

See publications by Diane Katz

Diane KatzResearch Fellow in Regulatory Policy

Additional Reading