Congress has less than two weeks to keep the Ex-Im Bank alive and restore its lending authority, which expired on June 30. A majority of both chambers favors doing this, but it is blocked by a stubborn group of House Republicans.
They appear to prefer a misguided ideology about supposed corporate welfare to facts about the banks’s effective role in helping America compete in world markets. In exploiting their control over the House agenda to throttle any Ex-Im Bank rescue, these GOP lawmakers are doing damage to their party and, more importantly, their nation.
An example of that damage appeared last week in announcements by two major South Carolina employers, General Electric and Boeing. GE said it will accept help from the French counterpart to Ex-Im Bank to invest in a new plant in Europe. Consequently the jobs that might have come to South Carolina, Texas and other U.S. states will be going to France and other European nations. If Ex-Im Bank had been able to help, those jobs could have come here.
Boeing announced that it lost a contract to supply satellite services to an Asian competitor because of unfavorable financing conditions caused by the inability of Ex-Im Bank to help and will be forced to cut employment in California.
What Ex-Im Bank does is guarantee loans to purchasers of U.S-made products. About 60 other nations have similar arrangements. Boeing’s top competitor, Airbus, could not exist with out them.
Despite the argument put forward by opponents of Ex-Im Bank, commercial lenders cannot compete with the interest rates backed by government guarantees. Ex-Im Bank roughly breaks even, so its efforts to level the competitive playing field for American firms don’t impose major costs on the American taxpayer. At the same time, the jobs created by exports add to federal, state and local revenues.
Two leading opponents of Ex-Im Bank are Republican members of the South Carolina congressional delegation: Reps. Jeff Duncan of the 3rd Congressional District and Mick Mulvaney of the 5th.
Both districts border on the I-85 manufacturing corridor where GE has a major plant.
In a statement on the GE announcement, Rep. Mulvaney said the focus should be on the overall competitiveness of American industry, taking into account taxes and regulations, and questioned why GE did not seek commercial credit.
That’s a classic case of changing the subject.
It certainly does not address the arguments of supporters of the Ex-Im Bank like Rep. Trey Gowdy. The Republican from the neighboring 4th District correctly said that opposing Ex-Im Bank at this time makes no sense, especially in South Carolina “where our manufacturing base is engaged in competition worldwide with companies who have access to multiple Ex-Im banks.”
GE chief executive Jeff Immelt said in June that 27 countries require government credit guarantees for any bids in large infrastructure projects. “We’re not going to lose this business,” he explained. “We’ll build these products in places where export financing is available because we have to.”
The evidence is clear — conservative opposition to the Ex-Im Bank is a costly mistake.