Officials of the Obama administration teamed up with Boeing executives last week to lobby for Senate confirmation of the president’s nominee to the board of the Export-Import Bank, which lacks a quorum and thus is barred from approving deals in excess of $10 million (that is, the deals that most benefit the multinational conglomerates that are least in need of taxpayer subsidies). Lest anyone doubt that the delay is anything but entirely justified, however, the following facts are in order:
1. The aviation giant is talking with Iran about the sale of aircraft. The state sponsor of terrorism currently lacks ready access to financing, which is the very type of deal Ex-Im advocates say the bank exists to serve.
2. Boeing, and several other U.S. mega-corporations, are continuing to benefit from Ex-Im subsidies—albeit in smaller amounts than past years, when they collected 80 percent of all authorizations.
3. The Ethiopian Airlines deal that Boeing claims is at risk would actually be the latest in a series of U.S. subsidies for the African carrier, which has received more than $2.2 billion in Ex-Im financing since 2010—of which more than $1.6 billion remains outstanding, according to Ex-Im records.
4. Absent a board quorum, Ex-Im has been forced to focus on export financing for small businesses, which is precisely what bank proponents insisted was the primary purpose of last year’s bank reauthorization.
5. Ex-Im continues to be plagued by dysfunction, according to the bank’s Office of Inspector General, despite longstanding promises of reform.
Taken together, these facts (among others) underscore why Senate Banking Chairman Richard Shelby, R-Ala., would do very well to continue resisting the lamentations of Boeing and its Washington buddies who want to revive Ex-Im’s most egregious pursuits.
Last week’s statements from Boeing CEO Dennis Muilenburg, Treasury Secretary Jack Lew, and Ex-Im President Fred Hochberg coincided with the bank’s annual conference as well as news that a Boeing delegation recently met in Tehran with representatives of Iranian airlines. (General Electric, another primary beneficiary of Ex-Im, has likewise been “exploring business opportunities in Iran,” according to news reports.)
Notwithstanding the lack of a board quorum, bank officials have authorized about $1 billion in new financing this year—80 percent of which has benefited “small business” (according to Ex-Im’s expansive definition of the term). Boeing claims to be losing deals, but according to bank data, some $912 million in insured shipments, guaranteed credit, or loans authorized so far this year will benefit the company.
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