May 16, 2012

State of Alabama
Press Release: Alabama Department of Commerce

Export-Import Bank Reauthorized by Senate

May 15, 2012


On a broad bipartisan vote of 78 to 20, the Senate voted Tuesday to extend the life of the U.S. Export-Import Bank and expand its authority to make loans to U.S. exporters.

In the "Schoolhouse Rock" version of how Capitol Hill works, this is what Congress does all the time — passes legislation.

But it made for big news on this Capitol Hill, where protracted partisan warfare has meant that lately the story has more often been about votes forced by one party or the other to indignantly demonstrate the other’s opposition.

Amid the gridlock, it had been nearly six weeks since the last time Congress completed this seemingly routine task.

Tuesday’s bill was the rarest of breeds: a lasting compromise on an issue of substance. It renewed the charter of what is commonly referred to as the Ex-Im bank for three years and will over that time raise the cap on the total financing the bank can guarantee from $100 billion to $140 billion.

The House agreed to the same measure by a similarly broad 330-to-93 vote last week.

Depending who you talk to, the fact that it was the Ex-Im bank that provided the opportunity for election year cooperation was a sign either that occasional bouts of bipartisanship are still possible in Washington — or a symbol of the enduring power of corporate influence over both parties.

The measure was approved over the objections of some tea party conservatives who argued that the bank distorts the global marketplace and that propping up U.S. exporters is an improper role for government. But the measure had the backing of business and labor groups.

The nearly 80-year-old bank makes loan guarantees to foreign buyers that seek to do business with U.S. exporters.

The bank has been reauthorized with little notice dozens of times before, and the U.S. Chamber of Commerce, the National Association of Manufacturers and others had been pushing for Congress to do so again when the bank’s temporary authority expires at the end of the month.

They argued that export subsidies help level the global playing field for U.S. companies competing with foreign businesses that are given significantly more support by other governments.

Proponents said the bank’s loans support 200,000 jobs at big and small companies around the country.

“This legislation helps American businesses export their products instead of exporting jobs,” House Majority Leader Harry M. Reid (D-Nev.) said Tuesday.

Though no taxpayer money is used in bank deals, the bank is designed to offer guarantees in cases deemed too risky by private lenders, and detractors worry that taxpayers could be on the hook if those deals go south.

Among its opponents was the Club for Growth, which put wayward Republicans on notice last week by spending nearly $2 million to help Indiana state Treasurer Richard Mourdock knock off six-term Sen. Richard Lugar (R) in the state’s senate primary. The Club argued that Lugar had not been sufficiently committed to conservative fiscal policy.

“What this shows is that members of Congress in both parties are opposed to subsidies — except when it affects a favored industry,” Club for Growth spokesman Barney Keller said. “Democrats won’t eliminate welfare for supposed green jobs. And the Republicans won’t eliminate it for massive multinational companies that don’t need it.”

Passage was made possible by a deal crafted in the House by Majority Leader Eric Cantor (R-Va.) and Minority Whip Steny Hoyer (D-Md.) in which the bank would be subject to a slew of new reporting requirements.

The bank’s supporters counter that its default rate is low and that the costs of deals are shouldered by trading partners.

Republicans who backed the measure said they were sympathetic to concerns that the bank disrupts free markets, but they said American businesses would be hurt if the country were to halt its export support while other nations continue to assist their own companies.

“I live in the real world and the real world is that these financing mechanisms have to be available to American manufacturers to have a share of the overseas market,” said Sen. Lindsey Graham (R-S.C.).

Graham has been a vocal bank supporter in part because one of the agency’s biggest beneficiaries has been Boeing Co., which builds aircraft in South Carolina that are sold overseas using Ex-Im bank financing.

More than a third of the $32 billion in loans and guarantees issued by the bank last year went to Boeing. Some supporters of Delta Airlines had argued that the financing had helped foreign airlines buy jets for artificially low prices and undercut the U.S. airliner.

The bank’s charter expired last year and it has been operating under a temporary authority that ends this month. The measure extends the bank’s charter for one year shy of what had been sought by the White House but meets the Obama administration’s request for new lending authority.

The measure was approved after the Senate considered and rejected five GOP-authored amendments that would have weakened or ended the bank. Graham said the robust debate on amendments was a sign that the Senate is “back in business.”

But he said that he fledgling governments like that in Afghanistan don’t turn on C-SPAN to get a sense of how American governance works.

“Who are we to lecture anyone about democracy given the way we’re behaving?” he said.

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