Ex-Im Bank becomes the walking dead

30 Jun 2015 | Author: | No comments yet »

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

“It is a culturally corrupt organization,” said Rep. 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. 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. 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. 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.

And it’s gotta go away.” But for Washington institutions, death can be just a first step toward rebirth: Democrats, along with a handful of GOP lawmakers, are already laying the groundwork to resurrect the bank, as soon as the end of July. 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. Congressional Democrats and many Republicans remain determined to reverse that step this month, launching a messaging blitz focused on potential job losses and international competitiveness. 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. 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.

Meanwhile, House Speaker John Boehner (R-Ohio) hasn’t stopped his two top deputies from plotting to eliminate the agency, as the right has made the issue a reliable litmus test for presidential hopefuls and congressional candidates. 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.

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. Transportation funding runs dry on July 31 and Republicans are loath to miss that deadline in the middle of the summer construction season, particularly after they blew a deadline earlier this spring and allowed key provisions of the PATRIOT Act to lapse for two days.

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. But Boehner has resisted drawing lines in the sand, committing instead to House Financial Services Chairman Jeb Hensarling (R-Texas) that the House will be allowed to amend any Export-Import Bank revival that clears the upper chamber. “The only commitment the speaker has made on the Export Import Bank is to Chairman Hensarling, who asked that — if the Senate attached Ex-Im to a ‘must pass’ bill and sent it over to the House — he be allowed to offer amendments under an open process,” Boehner spokesman Kevin Smith said Monday. 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. David McKinley (R-W.Va.) said he wants to modify the bank so that it isn’t used as often for large corporations’ benefit and it backs off its “ideological warfare” on his state’s coal industry.

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 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.

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. As a way to demonstrate to the business community that Congress would not permanently bury the credit agency, the Senate held a nonbinding Ex-Im vote in June that showed 65 senators — including 22 Republicans — backed the agency. 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). 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. Dick Durbin, the second-ranking Senate Democrat, was recently pessimistic on the chances of reviving the bank, noting that the task gets “increasingly difficult” once the charter has expired.

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. Lindsey Graham (R-S.C.) refused to vote for that fast-track trade bill until McConnell reassured them that there will be an opportunity for the Senate to revive Ex-Im by attaching it to a mutually agreeable legislative vehicle. But that vote has caused tension between McConnell and Democrats like Cantwell, who has suggested that was not what she had in mind when she voted to advance the trade legislation over a liberal-led filibuster. 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. Heidi Heitkamp (D-N.D.) and Majority Whip John Cornyn (R-Texas) had an animated discussion during the Senate’s second trade vote last week, with Heitkamp arguing that the Ex-Im clearly has the votes to pass the Senate. “We know that there were commitments made, or understandings, that weren’t necessarily carried through on,” Heitkamp fumed late last week as GOP leaders pointed to that nonbinding vote. “I don’t know how anyone can look at that and say that was a fulfillment of a commitment.” “Sen.

Here you can write a commentary on the recording "Ex-Im Bank becomes the walking dead".

* Required fields
All the reviews are moderated.
Twitter-news
Our partners
Follow us
Contact us
Our contacts

About this site