The Obama administration recently announced that it reached its goal of $1 billion in Export-Import Bank loans and loan guarantees. My column today discusses these subsidies in the context of Ex-Im's upcoming reauthorization and in context of President Obama's regular attacks on corporate jet "tax breaks."
Below is Ex-Im's response:
First of all, Ex-Im Bank does not offer tax breaks, and we do not offer subsidies. We offer competitive financing at market rates. Our credit is not free. And our credit is offered on the basis of reasonable assurance of repayment, lack of financing at affordable rates, and U.S. job support.
Second, Ex-Im Bank earns a profit. In the last fiscal year alone, Ex-Im Bank generated more than $1 billion for the U.S. taxpayers above operational expenses and reserves.
In May of 2012, Chairman Hochberg announced that Ex-Im Bank would provide support for at least $1 billion in business-aircraft and helicopter financings by the end of 2014. Ex-Im Bank met the goal well in advance.
52 percent of the financing supported the export of aircraft, including a $300 million deal that supported 2,100 Gulfstream jobs in Savannah, Ga. But nearly 48 percent of the financing supported the export of helicopters from the greater Philadelphia area.
On top of the $1 billion, Ex-Im Bank also approved 65 transactions totaling $60 million for agricultural aircraft. Companies like Air Tractor, a small business based in Olney, Texas, and Thrush Aircraft of Albany, Ga., directly benefitted.
It must be borne in mind that Ex-Im Bank competes with other export credit agencies, not with the commercial sector. Our mission is to support U.S. jobs by ensuring that American companies do not lose out on orders to state-backed competitors due to financing terms.
I could quibble with some of Ex-Im's definitions and the relevance of some of their arguments, but I've had my say for now.