Editorial: Congress can help keep U.S. competitive with bank aid
The Export-Import Bank, perhaps Washington state’s most important manufacturing lender, could go out of business at the end of May.
Tuesday, the U.S. Senate rejected an amendment sponsored by Sen. Maria Cantwell that would have extended the bank’s charter into 2015 and increased its lending limit to $140 billion. Her two Republican co-sponsors, apparently cowed by Minority Leader Mitch McConnell, voted against their own bill.
ExIm loans money to foreign entities that use the money to buy American-made goods, notably airplanes. Almost one-half of its lending supports the purchase of Boeing Co.’s planes, but many other Washington companies benefit, including several in Spokane.
Brubakken and Reinbold Inc., for example, have used ExIm support to sell more than $2 million worth of grass seed to China. Schweitzer Engineering Labs in Pullman and Colmac Coil Manufacturing Inc. in Colville have also used the bank.
ExIm loans support more than 80,000 jobs in Washington and 200,000 more jobs at 3,600 companies around the United States.
Bank business has doubled in the last four years, which not coincidentally has corresponded with the rebound in American manufacturing. The National Association of Manufacturing and U.S. Chamber of Commerce strongly supported the amendment.
The Chamber noted Canada, where Bombardier airplanes are made, provides three times the export financing the U.S. does – for an economy one-tenth the size. China last year provided $300 billion in export financing for its companies.
Boeing’s biggest competitor, Airbus, is substantially subsidized.
That, until Tuesday, was good enough for amendment co-sponsor Sen. Lindsey Graham, a Republican.
“In South Carolina, we have a particular interest in this issue as the bank is used to finance textile exports as well as every Boeing 787 that rolls out of the brand new, state-of-the-art assembly line this year in North Charleston,” Graham said on Thursday. So he was for it before he voted against it.
Foes say ExIm takes business from private banks and hurts domestic airlines such as Delta that pay more for airplanes than foreign carriers that benefit from cheaper loans. They also point, legitimately, to the damage done to taxpayers when quasi-government Fannie Mae and Freddie Mac could not handle crushing mortgage losses.
And the airline business is barely more stable than mortgage lending. But the ExIm has been profitable and is well-reserved against potential loan losses. It has returned $3 billion in profits to the U.S. Treasury.
The amendment, incidentally, was to be added to the Jumpstart Our Business Startups – JOBS – bill, a measure apparently so perfect that protection for 290,000 existing jobs is unnecessary.
ExIm keeps American manufacturers competitive in a world awash in government financing and other subsidies. Airbus executives will be singing in the Parisian rain if ExIm does not get a lifeline, and soon.
And – memo to Boeing – how much loyalty is that “brand new, state-of-the-art assembly line” winning for you in South Carolina? Both senators voted against the bank.