President Obama, as a final exercise of power, is pursuing a backdoor measure to approve $20 billion in massive taxpayer-backed deals to subsidize Boeing and other giant manufacturers.
Republicans have the power the stop this raft of corporate welfare. The only question is whether they have the will.
The Export-Import Bank of the United States is a federal agency that subsidizes U.S. exports by extending taxpayer-backed financing to foreign companies and foreign governments buying U.S. goods. Most of this financing backs a few massive exporters, with Boeing’s sales accounting for about 40 percent of the total.
Currently, Ex-Im is barred from handing out very large subsidies — loans or guarantees of $10 million or more — because there is no quorum on the agency’s board. Senate conservatives put Ex-Im into this unhappy position by blocking Obama’s nominees for the board.
Obama, with the help of outgoing Sen. Minority Leader Harry Reid, is trying to fix the problem by attaching an unrelated policy rider to the continuing resolution — the bill that would fund government into next year. The rider would effectively scrap the quorum requirement, thus freeing the agency to hand out its 8-, 9-, and 10-figure deals.
This is quite a last battle for Obama, who ran eight years ago against the special interests while blasting Ex-Im as “little more than a slush fund for corporate welfare.”
When the Tea Party came to town in 2011 and started questioning Ex-Im, it was Obama and Reid’s Senate Democrats who led the fight to preserve and expand the agency.
Conservatives in 2015 knocked Ex-Im to the mat, blocking its reauthorization. Democrats and K Street fought back and in December of that year resurrected the agency.
In the recent debates over Ex-Im, Democrats portrayed the agency as mostly a small-business tool. “The bank’s sole mission is to support American jobs by increasing our exports,” Obama said in 2015. “That’s it. It helps small businesses go global. It helps American entrepreneurs take that next step.”
Because Democrats and industry haven’t been able to secure another member on the board, Ex-Im can’t approve any large deals (over $10 million).
So Republicans have failed to kill Ex-Im, but they’ve reduced it to being what Obama pretended it was: an agency that subsidizes small businesses. Ex-Im never was that, of course. Boeing’s 40 percent of Ex-Im financing was twice as large as its financing for all small-business exports combined.
All of these small business deals still go through at Ex-Im. The only businesses seeking eight-figure financing deals from Ex-Im are the big guys: Boeing, General Electric, Caterpillar and a few others. All of these titans have plenty of access to private credit markets and plenty of experience selling goods overseas.
Junking the quorum rule doesn’t help a single small exporter. It just opens the spigot on mega deals: 30 of them, worth $20 billion, according to Ex-Im champion Heidi Heitkamp, the Democratic Senator from North Dakota.
The White House and Reid are trying to stick a rider in the government funding bill that would do exactly that. A conservative could take some perverse joy in this fitting final act for Obama — a sneaky corporatist ploy benefitting only a handful of manufacturers. But the Republican reaction ought to be: no way.
Republicans control both chambers. Obama isn’t going to veto the bill, shutting down the government, just because it doesn’t have the Ex-Im provision in there. K Street and the White House and Reid have no leverage. They only get their Ex-Im mega-deal provision if Republicans agree. And Republicans have no reason to agree.
The Speaker of the House, Paul Ryan, opposes Ex-Im. House Majority Leader Kevin McCarthy opposes it. House Financial Services Chairman Jeb Hensarling opposes it. Senate Majority Leader Mitch McConnell opposes it. Senate Banking Chairman Richard Shelby opposes it. A majority of Senate Republicans oppose it. And even President-elect Donald Trump has said he opposes Ex-Im.
Republicans often cave on government funding fights, frequently out of strategic necessity. Here, though, there is no necessity. Obama is not going to shut down the government on his way out the door for Boeing—and Democrats would be the ones loading up the bill with an unrelated policy rider.
The only reason the Ex-Im provision would end up in the spending bill is if Republican leaders wanted it there — that is, if they valued the wishes of Big Business over their professed belief in free enterprise.
Timothy P. Carney, the Washington Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Tuesday and Thursday nights on washingtonexaminer.com.
