Our congressional representative here in North Carolina’s second district put out a statement trying to explain how her allegedly conservative ideology meshes with her vote to reauthorize the U.S. Export-Import Bank (long a target for elimination by conservatives and Tea Partiers):
I voted to reauthorize the Export-Import Bank this week to help create American jobs and expand our trade. The Export-Import Bank is a key driver in re-building the US workforce in industries such as manufacturing, oil & gas, aerospace, agriculture machinery and mining. In 2011 alone, the Export-Import Bank supported over 290,000 export related US jobs — jobs we cannot afford to lose.
This bill raises the credit limit for this “bank” from $100B to $140B. Read On:
The Export-Import Bank consistently operates at a profit and it’s default rate is below the default rate of commercial banks. It has returned about $3.5 billion to the U.S. Treasury above and beyond the cost of its operations.
I have heard from numerous small businesses and farmers who use the services of this bank to help them export products to countries they could not otherwise serve. Many larger companies can self finance their trade deals, but small businesses and industries with substantial cost, like aerospace and companies that build nuclear power plants, could not participate in the international arena without the Export-Import Bank. In fact, in 2011 the Export Import Bank authorized $6 B in direct support for nearly 2,000 US small businesses.
It would be foolish to discontinue the US Export-Import Bank when our economy needs all of the help it can get. Our foreign competitors would simply fill the void and use their own rapidly expanding export import banks to finance deals for their own industries, putting our companies at competitive disadvantage and jeopardizing American jobs. I will continue to fight for free market policies that protect our job creators and protect American taxpayers from unnecessary burdens. This legislation does just that.
Um, Renee. I hate to break it to you, but ANYTHING that relies on government money to fund its operations is NOT “free market.”
Let’s turn to a few folks who don’t get their talking points from Eric Cantor — like the libertarian Cato Institute:
House legislators have reached a “compromise” deal to reauthorize the Export-Import Bank of the United States until 2014 and at an increased funding level ($120 billion, with a possible increase to $140 billion). The compromise builds on a bill crafted by Rep. Eric Cantor (R-VA) I blogged about in March, but seems to largely be a win for the pro-bank folks judging by the increased funding levels, with the “compromise” part being not much more than pathetic sops to those concerned about the bank’s mission, if not its very existence.
House Republican and Democratic leaders late last week announced that they had a reached a compromise deal to reauthorize the Export-Import Bank through fiscal year 2014 and immediately raise its lending cap to $120 billion, with the possibility of further increases to $140 billion during that period if default rates are kept low and other conditions are met. The House expects to consider the bill on Wednesday (May 9) under suspension of rules, a House GOP aide said.
The bill contains a longer reauthorization, and a higher lending cap, than what was included in an initial draft bill floated by Rep. Eric Cantor (R-VA) in March. That draft bill would have renewed the bank’s charter only through June 2013, and would have raised the lending cap to $113 billion, up from the current level of $100 billion.
At the same time, the compromise bill reflects some of the demands of Cantor and other Republicans who are wary of reauthorizing the activities of a bank they say puts taxpayer money at risk and distorts the free market.
For instance, it conditions further increases in the lending cap, to $140 billion for fiscal year 2014, on the bank maintaining a default rate on outstanding loans that is below two percent and submitting other required reports. It also includes language from Cantor’s draft instructing the president to enter into negotiations with other countries to substantially reduce official export financing in general and for aircraft in particular, with the goal of ultimately eliminating such financing altogether.
Under suspension of rules, which is a procedure typically reserved for non-controversial legislation, debate is limited to 40 minutes and the bill must garner a two-thirds majority to pass.
The article goes on to describe all of the ostensible brakes that the Republican leadership have insisted placing on Ex-Im, but they really amount to the usual Washington ways of pretending they are implementing real reform: calls for the bank to issue business plans, address GAO concerns, be more transparent, etc. Nothing, unfortunately, about changing the accounting rules under which the bank operates let alone setting a path to winding down the bank altogether.
In short, the “compromise” is just fiddling while Washington is awash in red ink, and the federal government encroaches more and more into what should be private markets.
Here is the conservative Heritage Foundation’s take on reauthorization of the bank:
Yesterday, the House of Representatives voted on the Export-Import Bank Reauthorization Act of 2012 (H.R.2072). The bill extends and expands the Export-Import (Ex-Im) Bank by 40% through 2014. Ex-Im provides subsidized loans to companies that export their goods to foreign companies. The market distortion means foreign companies can buy American made products cheaper than domestic companies, putting the U.S. at a disadvantage. […]