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Good News: Congress Showed Bi-Partisanship Over Export-Import Bank

October 27, 2015

The House voted  today to revive the Export-Import Bank.  That is great news, but equally good news to report is some of that support came from moderate Republicans.  It was of course a major setback for far right-wing conservatives who think they should be able to stop government from functioning.   They had wanted to kill the legislation as they view it akin to being corporate welfare.

But in a stunning show of bi-partisanship the house voted 313 to 118  to send the legislation to the Senate.  It will now take a bit of craftsmanship to get the bill to President Obama’s desk.

But I know it will get done as the will to do it is there in congress.

In the end this bill will be attached to other must-pass legislation–in this case the senate’s long-term highway bill. If the House passes its own long-term highway bill next week, as expected, supporters say that will serve as the vehicle for a conference bill that will include Ex-Im’s renewal.

There is nothing here about corporate welfare that can stick as a description.  This has long been a useful tool to allow for America to better compete on the world market.  This year stats prove that the last wave of loan guarantees supported more than 160,000 U.S. jobs.

Good paying jobs, too.

There are not many times in the recent past I have had the joy of reporting that Washington can work.  Or that congress can function.

Would it not be great if this was a new chapter about to start in the way our government operates?

4 Comments leave one →
  1. Solly permalink
    October 28, 2015 10:52 PM

    One must be able to discern between self-serving Ex/Im Bank news releases or U.S. Chamber of Commerce talking points and objective analysis:
    from http://dailysignal.com//2014/05/22/export-import-bank-actually-losing-taxpayer-money/
    “But in a major embarrassment for the bank and its allies—and a victory for government transparency and accountability—the Congressional Budget Office (CBO) on Thursday reported that Ex–Im programs actually operate at a deficit that will cost taxpayers some $2 billion in the next decade (in addition to the bank’s operating costs).

    The bottom line: If forced to apply the stricter accounting rules required of private firms, Ex–Im would be overstating its profitability by $16 billion during the next decade: Instead of a 10-year surplus of $14 billion, the bank would incur a loss of $2 billion.

    The difference between the accounting method used by Ex–Im and the more accurate method applied by the CBO in its report is in factoring for the risk of defaults related to the bank’s generous financing. The bank calculates its future revenue from loan repayments based on interest rates tied to Treasury securities. But unlike private banks, Ex–Im does not adjust the amount of anticipated revenue for changes in the market that will reduce future repayments.

    And just what is Ex–Im doing with all that taxpayer money—which is expected to exceed $140 billion in outstanding liabilities by September 30?

    It is doling out export subsidies to some of America’s most successful corporations, including General Electric, Westinghouse, John Deere, Caterpillar, Ford Motor Company, and Bechtel. In the last five years, Boeing, the world’s largest aerospace company (with a market capitalization exceeding $91 billion), benefited from 197 Ex–Im deals totaling $48 billion.”

    Congressional Budget Office report referenced: http://cbo.gov/sites/default/files/cbofiles/attachments/45383-FairValue.pdf

  2. October 28, 2015 8:24 PM

    And the Ex-I’m Bank returned money–again– to the federal treasury as it does every year with $675 million coming back in 2014. One must be able to discern programs that work from those that do not.

  3. Solly permalink
    October 28, 2015 7:23 PM

    “Would it not be great if this was a new chapter about to start in the way our government operates?” We can’t afford it. Another newer, closer example. John Deere eliminates 100 jobs in Janesville, promises to create 80 jobs in Horicon in an expansion there. WEDC gives JD $2 million in tax credits. (and we know WEDC NEVER follows up to see if the promises of more jobs are kept) Good for Horicon, good for John Deere. Bad for Janesville. Meh for Wisconsin. As the study said about gubment corporate welfare programs “The nonpartisan Congressional Research Service reflected a consensus among economists in arguing: “Subsidized export financing merely shifts production among sectors within the economy, rather than adding to the overall level of economic activity.” Same for WEDC corporate welfare. Maybe WEDC could budget for sending some turkeys to the Janesville food pantries this year. At least Wisconsin turkey farmers would benefit.

  4. Free market Solly permalink
    October 27, 2015 8:57 PM

    The corporate welfare caucus wins again. Excellent editorial last May laid it out: http://www.dallasnews.com/opinion/editorials/20150531-editorial-congress-should-let-ex-im-charter-expire.ece. .

    “The nonpartisan Congressional Research Service reflected a consensus among economists in arguing: “Subsidized export financing merely shifts production among sectors within the economy, rather than adding to the overall level of economic activity, and subsidizes foreign consumption at the expense of the domestic economy.”

    It was true in 2002, when those words were written. It’s true today.

    The good news is that Congress need do nothing to end the Ex-Im bank; its charter, after a last-ditch nine-month renewal, expires at the end of June. In recent weeks, we have seen intensified lobbying on the bank’s behalf by those U.S. corporations that benefit from its taxpayer-backed loan guarantees to foreign customers.

    Chief among the lobbyists is Boeing Corp., airplane builder and aerospace company. No surprise there. Some critics call Ex-Im “Boeing’s bank” because it and another multinational, General Electric, together benefit from as much as 40 percent of those loan guarantees.

    The bank’s defenders insist that it’s invaluable to small business and that jobs would disappear without it. And this might be true if Ex-Im backed more than 2 percent of all U.S. exports and roughly two-thirds of its financing did not go to just 10 large corporations.

    This newspaper would rather see the playing field leveled for the 98 percent of exports that gain nothing from Ex-Im financing.

    Americans overwhelmingly believe, polls show, that their government gives favored treatment to the companies with the best political connections. This might stand to reason, but it doesn’t have to be the only way business gets done.”

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