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 bank is nothing but welfare for America’s largest, most successful corporations, and it’s time for taxpayers to stop footing the bill.
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. In fact, Ex-Im finances one out of every three of Boeing’s airplane sales. Not only has it received the most in funding, but it also has been allowed to tailor bank rules for its own benefit. No one corporation should have so much sway over a taxpayer-backed, U.S. government institution.
The bank has proven to be immune to reforms. 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. 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.
According to the Wall Street Journal investigation, “the previously unreported documents, obtained through an open-records request, show how the two sides swapped ideas, drafts and data” on Boeing airplane sales. Top bank officials allowed Boeing’s top executives to make changes to the bank’s draft proposal, solely benefiting Boeing.
The strategy of avoiding reform and rewarding politically well-connected corporations is what has led, ultimately, to the lapse in authority for the first time in the Ex-Im bank’s 81-year history – nearly everyone concedes that the bank will, in fact, expire this week.
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. Boeing and GE have been ringing the alarm bells and predicting catastrophe. GE Vice Chairman John Rice has threatened that the company would move jobs overseas, should the bank collapse. GE has manufactured opposition and organized rallies, coercing employees in two of is North Carolina plants to participate to stir up media attention.
However, despite the alarmist rhetoric, Boeing and GE themselves have quietly admitted that they will be fine when the bank’s authority collapses. These companies can compete with or without the bank; the end of Ex-Im will not make or break them.
Boeing has assured overseas buyers that it would be able to self-finance its foreign exports, but that it simply doesn’t want to. Historically, plane makers have long provided their own funding and guarantees to support sales, according to the Wall Street Journal.
GE too, has admitted they’ll have the means to survive, but would rather not use their own funding. Instead, they have focused their lobbying efforts on championing for the bank’s extension on behalf of small businesses — a laughable endeavor, considering less than one percent of small businesses in the U.S. receive the bank’s assistance. In fact, the bank actually only assists with less than two percent of our exports abroad, in total.
Ex-Im chairman Fred Hochberg himself admits that “None of us actually expires on June 30. That bank’s authority to make a new loan expires on June 30.” When authority lapses, there will be an orderly, multi-year wind-down of the bank. All outstanding obligations will be fulfilled, people won’t lose jobs en mass, and the sky will not fall.
Taxpayers cannot keep footing the bill for big business. 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. It’s time to stop providing welfare for America’s largest multinational corporations. It’s time for the bank to go.