Conservatives claim big win on Export-Import Bank. But will it last?

30 Jun 2015 | Author: | No comments yet »

Conservatives claim big win on Export-Import Bank. But will it last?.

For decades, conservatives have dreamed of paring the federal government by eliminating entire cabinet departments — or at least an agency or two. WASHINGTON — The supporters of the federal Export-Import Bank have the Senate votes to revive it and will get a chance to do so, Majority Leader Mitch McConnell said Monday. “Looks to me like they have the votes, and I’m going to give them the opportunity,” McConnell, who opposes the bank, said in a telephone interview from Kentucky, where he is spending Congress’ July 4 recess.With Congress in recess until July 7, the Export-Import Bank will certainly lose its authority to extend new financing Wednesday, but the battle over the bank is far from finished. “This is a small step toward renewing a competitive free-market economy and arresting the rise of the progressive welfare state and the cronyism connected to it,” Republican Rep.Boeing and General Electric (GE) have been throwing all they’ve got behind the reauthorization of the United States Export-Import Bank (Ex-Im), set to expire this week.

President Obama signed hard-fought trade legislation Monday, thanking Republican leaders who helped get it done and saying the package will “reinforce America’s leadership role in the world.” “I think it’s fair to say that getting these bills through Congress has not been easy,” Mr. That shouldn’t come as much of a shock, considering they are the top two recipients of taxpayer-backed loan guarantees for foreign countries and companies to purchase their products. Obama said as he signed the trade bills into law in the East Room. “They’ve been declared dead more than once.” The two major pieces of legislation grant Mr. The Long Island, New York, housewife began making quiches in her home kitchen in 1973, and grew her company, Love & Quiches Gourmet, in part by exporting her products to places such as Qatar and Japan.

For now, Nelson said, he’s keeping faith that Washington will ensure the survival of the export-promoting agency — something supporters in Congress still hope to accomplish by doing an end-run around the committee chairs. “We’re not laying anyone off,” Nelson said. “We’re not going to stop doing what we’re doing. Although opponents in the House managed to prevent a vote on reauthorization ahead of the June 30 expiration of Ex-Im’s charter, the bank will continue to operate until its existing deals run their course, meaning backers will still be able to restore its lending authority in the future, according to Insurance Journal. Obama “fast track” trade-promotion authority, which allows the president to negotiate a deal and submit it to Congress for an up-or-down vote without the chance for amendments, and expand aid for American workers who lose their jobs due to foreign competition. We’re going forward with the belief that Congress will reauthorize.” But any such salvation will have to come after July 7, when Congress returns from its weeklong holiday recess. Indeed, Boeing has been the single largest recipient of Ex-Im funds, receiving more than 40 percent of the bank’s allocations—totaling 8 billion dollars—in order to export their wide-bodied aircraft abroad.

The next attempt to reauthorize Ex-Im is generally expected take place next month, when supporters will most likely try to attach it as an amendment to a bill funding the Highway Trust Fund, which is projected to run out of money July 31. (RELATED: Sens. Graham, Cantwell Threaten to Torpedo TPA Over Ex-Im) Whether such efforts are successful could depend on how lawmakers interpret the immediate effects of Ex-Im’s expiration—particularly with respect to whether exporters are able to find alternative sources of financing. It is corporate welfare for foreign companies and countries.” It’s a humbling setback for an agency that had survived 16 reauthorizations and 81 years of continuous operation with the support of the last 13 U.S. presidents — both Republicans and Democrats. Congressional Democrats and many Republicans remain determined to reverse that step this month, launching a new messaging blitz focused on potential job losses and international competitiveness. Its troubles are partly a casualty of the far-right insurgency that fueled the GOP’s takeover of Congress, where staunch critics now head key committees.

Bank supporters are hoping to engage in parliamentary maneuvers calibrated to overcome the opposition of key GOP leaders even as a solid majority of lawmakers appear to believe the bank should continue its work. “They are bending to the hard right,” Sen. The House and Senate approved both measures last week after House Democrats, including Minority Leader Nancy Pelosi of California, temporarily derailed the package. If the bank’s charter is not reauthorized, “the U.S. is going to lose our exporting power,” Axelrod said. “China and other exporting countries are chomping at the bit to take that business.” She said as much as 30 percent of her business comes from international markets.

Ex-Im — an export credit agency that guarantees loans to help foreign companies buy U.S. exports, among other financial services — isn’t shutting down immediately, even after its charter expires Wednesday. Despite Congressional attempts to increase transparency, Boeing was able in 2012, according to emails obtained by the Wall Street Journal, to work with top bank officials in crafting rules to their benefit. The president said trade-promotion authority isn’t “the end of the road” for his efforts, noting that negotiations for the massive TPP are still unfinished. But it won’t be allowed to approve new transactions and, if Congress abandons it, will slowly shrink as it completes those contracts, lays off employees and finally disappears. One of Congress’s conditions to extend the bank’s charter in 2012 was the requirement that Ex-Im officials publish their methodology for determining how the bank approved transactions.

That figures includes more than $5 billion in financing and insurance for small businesses that make up $27 billion in U.S. exports and 164,000 American jobs. Boeing and bank officials were able to craft an exception for the airplane manufacturing industry alone, keeping Congress in the dark on the methodology behind the high number of authorizations to Boeing each year. On the foreign side, the cheap loans go to state-owned companies like Pemex, the Mexican government’s oil and gas giant, or Air Emirates, the airline of the wealthy United Arab Emirates. Spokespeople for both corporations were not immediately available for comment. “Most of this goes to very successful, well-heeled companies that don’t need the help in the first place,” says Rep. But that was before a fierce lobbying campaign by some of the most formidable forces in conservative activism, including Heritage Action for America, the Club for Growth and the industrialist billionaires Charles and David Koch.

Its records suggest that less than 0.3 percent of small business employees and less than 0.04 percent of small business establishments benefit from the Ex-Im Bank annually. But that hasn’t stopped corporations who rely on the bank’s crony capitalism from fear mongering and threatening that the economy will suffer, jobs will disappear, and international exports will collapse. And considering who the beneficiaries of Ex-Im on the domestic and foreign sides are, there’s no chance that all Ex-Im supported exports will disappear. GE has manufactured opposition and organized rallies, coercing employees in two of is North Carolina plants to participate to stir up media attention.

Cantor was dispatched last year by an anti-Ex-Im conservative primary challenger, and McCarthy, upon assuming the majority leader post, quickly announced his opposition to another renewal. But neither Hensarling nor Senate Banking Chairman Richard Shelby (R-Ala.) will mark up a stand-alone bill, lending huge momentum to the opposition’s cause. But the Government Accounting Office criticized the bank’s job calculation methodology for failing to consider how many jobs would have been created without Ex-Im, among other flaws.

For now, the bank’s supporters still have a shot at a quick renewal, potentially hitching it a ride on the highway authorization bill that expires at the end of July. Also, top Ex-Im beneficiaries have billions of dollars in backorders, which will keep their workers and small business suppliers busy for years to come. Maria Cantwell (D-Wash.), a supporter, said she and other proponents will meet with President Barack Obama on July 8 to ask his backing for a renewal “in the early days of July.” It appears a majority of members in both chambers would support renewal.

Boeing, for instance, has a backlog of $441 billion, meaning it will have years to arrange alternative, private, financing (as, of course, small and large borrowers do every day). More than 240 House members are co-sponsors of at least one of two renewal bills, though substantial differences remain, particularly over provisions to remove the administration’s restrictions on financing for coal projects. The group’s vice president of grassroots outreach, former Hensarling aide Russ Vought, helped coordinate the effort through weekly phone briefings with the network.

Economists have shown that while export subsidies boost the profits of the recipients, it tends to have a negative impact on economy as a whole by shifting capital, economic growth, jobs and profits from unsubsidized firms to subsidized ones. Ex-Im doesn’t represent free market principles, instead serving as the big hand of government moving the goal post and picking the winners and losers of the game. They not only pay higher financing costs but also lose out when private capital flows to politically privileged firms regardless of the merits of their projects.

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