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Editorial: Congress should act on Ex-Im Bank charter

Tue., May 12, 2015

It’s a shame about that so-called Bank of Boeing.

The Export-Import Bank supports 80,000-plus jobs in Washington, and more than 164,000 nationwide. Last year, it produced a $675 million surplus for the U.S. Treasury.Yet its charter will expire June 30 unless renewed by Congress, which is paralyzed by a mostly Republican faction that decries the bank’s activities as “crony capitalism” because Boeing and a few other major manufacturers receive the bulk of the bank’s loan supports. Never mind that the bank assisted more than 3,000 small-business transactions.

Since 2007, 233 Washington companies have been helped; in Idaho, 37.

The bank had a near-death experience last fall, when Congress extended the charter for nine months rather than let the bank die and face charges of “job-killing” right before the election. Not much has changed in nine months.

The chairman of the House Finance Committee continues to resist Speaker John Boehner’s appeals he do something before June 30. If not, the Senate is expected to attach renewal to a must-pass bill. The House will have forfeited an opportunity to impose reforms, which Rep. Cathy McMorris Rodgers says she wants before she will join the rest of Washington’s delegation in support of the bill.

There’s no denying Boeing is the Ex-Im Bank’s biggest beneficiary: About 40 percent of Ex-Im Bank loans and loan guarantees support the aircraft maker’s overseas sales. Those sales are essential to Boeing’s future. At the end of 2014, orders from overseas buyers represented almost three-quarters of Boeing’s backlog.

But domestic carriers, Delta Airlines in particular, object to the discounts the subsidies give those foreign competitors. And there are troubling reports the relationship between the bank and Boeing has become too close, if not incestuous. Much of the suspicion regarding the bank is a result of its lack of transparency.

But Ex-Im is not just about Boeing and Washington.

A U.S. Census Bureau compilation of the top exports by each state revealed that aircraft or aircraft parts were No. 1 for 14 states. The same was true for agriculture in just five states, yet how many farm state representatives or senators would consider lowering subsidies in an ultra-competitive world market?

Boeing is engaged in just as ferocious a dogfight with Airbus, Bombardier and Embraer, with new competition emerging in China, where abundant state funding will be a tremendous advantage. Designing and manufacturing the most advanced planes in the air means nothing if customers cannot obtain multibillion-dollar financing to buy them. The dollar’s strength against other world currencies, and the advantage that gives foreign manufacturers, makes the Ex-Im Bank that much more important.

The charter should be renewed, and not just for nine months. A responsible homeowner would not confine their planning to such a short period. Certainly, no business should either.