The Export-Import Bank will make its last loan within the next few weeks, and close its doors May 31 unless Congress renews its charter.
This should be a slam-dunk. Renewal has been automatic since 1934, when Ex-Im Bank began making loans and loan guarantees to buyers of U.S.-made goods. For good reason.
Ex-Im helped finance the Marshall Plan that rebuilt post-WWII Europe. The bank financed the Burma Road and Pan American Highway. American companies have used the loans and guarantees to sell hundreds of billions of dollars in goods and services – $31 billion in 2011 alone.
Although Boeing Co. is by far the biggest beneficiary, in the last five years several Eastern Washington companies – SCAFCO in Spokane, Schweitzer Engineering Laboratories in Pullman, and Colmac Coil in Colville – have done more than $3 million worth of foreign business with Ex-Im’s help. Dozens, if not hundreds, of jobs have been created or sustained.
For U.S. taxpayers, the bottom line is this: $1.9 billion in profits returned to the U.S. Treasury since 2005.
When the administration of President Barack Obama and the U.S. Chamber of Commerce can agree on the value of the Ex-Im Bank, there should be no problem, right?
There’s a problem.
In the eyes of tea party purists, Ex-Im is guilty of interfering in free markets. To Delta and other domestic airlines, Ex-Im is providing below-rate financing for foreign aircraft buyers that they cannot get from their banks.
Nonsense. The international aircraft market is rife with subsidies; from Canada for Bombardier, Brazil for Embraer, France for Airbus. The same is true for much else sold across international borders, farm commodities being Exhibit A.
As for Delta, Thursday it was reported it will benefit from $84.8 million in loan guarantees to a Brazilian airline, Gol, that will use the money to get engines serviced at the U.S. airline’s Atlanta headquarters.
In the U.S. Senate, the majority and minority leaders are trading letters on how best to extend Ex-Im. Two weeks ago, Republicans squelched an amendment from Sen. Maria Cantwell that would have done the trick. Now, it appears they are willing to support renewal of Ex-Im’s charter if, say, Democrats might be willing to relax regulations from the U.S. Securities and Exchange Commission, those awful folks who want Wall Street to play fair.
The House Republican leadership has thrown in with the tea party on Ex-Im. Rep. Cathy McMorris Rodgers, a member of that group, says she has met with Boeing officials on the issue, but remains concerned bank loans and guarantees are unfair to domestic companies.
Boeing, meanwhile, has hired two of Washington’s heaviest heavyweight lobbying firms. Delta has sought help from a firm that includes a former adviser to Senate Majority Leader Harry Reid.
There should be compromises that make this doable: loan limits, terms closer to conventional bank rates, more transparency on bank business. But compromise has not been the tea party way. If that’s the way the House chooses to go, Ex-Im could be in for a bumpy landing. That would be very unfortunate for workers who need trade-related jobs.
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