Export-Import Bank Will Have to Wait – UPDATE

UPDATE, July 30, 3:50 pm EDT:  This afternoon the Senate passed the House’s short-term (three-month) extension of the highway bill, that has no Export-Import Bank reauthorization, sending it to the President for signature.  The Senate also passed its own long-term highway bill, that includes the Ex-Im Bank reauthorization adopted by amendment earlier this week; it will be waiting for House action when the House returns in September.

ORIGINAL POST, July 30, 8:19 am EDT:  The House began its summer recess last night without passing legislation to reauthorize the Export-Import Bank, leaving it in limbo at least until September.  Instead it passed a short-term extension to the highway bill without an Ex-Im Bank provision and sent it to the Senate before turning out the lights.  The House will meet in pro forma sessions, but no legislative business is scheduled until September 8.

The Bank’s charter, originally enacted in 1934, must be periodically renewed.  It expired on June 30 when a previous reauthorization attempt failed.  The issue splits the Republican and Democratic parties with some members of each insisting that the bank is essential to U.S. exports and therefore to U.S. jobs, while others assert it is corporate welfare for a few big companies.  Boeing is often mentioned in the latter regard.  Advocates claim that small and medium size businesses also benefit not only because of their own projects, but because many are suppliers to the big companies.

The Bank helps provide financing for U.S. exports, including
communications satellites, for example.  The Aerospace Industries
Associate and the Satellite Industry Association are among its
supporters.  

Reauthorization of the Bank is the source of bitter contention in the Senate, but earlier this week that chamber did agree to a multi-year extension of the bank as an amendment to a must-pass highway bill.  There is no substantive connection between the highway bill and the Ex-Im Bank reauthorization, but attaching one to the other was part of a strategy to get both passed before the summer recess began.  Senate supporters of the Ex-Im Bank hoped that enough House members would be willing to accept reauthorization of the Bank in order to keep money flowing from the Highway Trust Fund for highway, highway safety, and public transportation projects.  The Highway Trust Fund’s authorization expires tomorrow (July 31).

The House Republican leadership rejected that strategy, however, and instead passed a separate short-term extension of the Highway Trust Fund authorization (until October 29) without any reference to the Ex-Im Bank.  That bill is now pending before the Senate, which is likely to pass it since they do not want highway funding to end and the House has gone home for five weeks so nothing else can pass both chambers until September.

During an appearance at The Economic Club of Washington, D.C.. yesterday,  Boeing chairman, W. James McNerney, Jr said that the Boeing is “actively” considering moving some of its operations overseas so it can take advantage of other countries’ equivalents of the Ex-Im Bank.  Explaining that the whole point of the Bank is to level the playing field with foreign competitors, McNerney said If there will be no U.S. Ex-Im Bank, “we are actively considering now moving key pieces of our company to other countries and we never would have considered it before this craziness on Ex-Im.”   

He called it “the triumph of ideology over any description of private business.”   Boeing is the biggest beneficiary by dollars, he agreed, but not by transactions:  “There are more deals for small and medium size companies than big companies,” adding that “70 percent of the value added of our airplanes are made up by small companies … who would never have a chance to export without us.”  The congressional situation is a “sign of dysfunctionality” when two-thirds of the House and of the Senate support reauthorization, but legislation cannot pass because of the “extremes” of the two parties.