MONTGOMERY, Ala. — Governor Robert Bentley (R-AL) this week joined a majority of Governors across the country in sending a letter to Congress in support of the Export-Import bank.
The Ex-Im bank, which requires Congressional reauthorization, will expire unless it is renewed by June 30th.
The bank has received vocal support from many business groups, including the U.S. Chamber of Commerce, but some conservative organizations, including The Heritage Foundation’s political arm Heritage Action, have waged a campaign against it, calling it the epitome of corporate welfare.
The Ex-Im Bank finances exports for American companies that would be too risky for traditional lenders by making guaranteed loans to the foreign purchasers of those exports. While the bank’s charter mandates at least 20 percent its outlays benefit small businesses, that rule has been frequently violated.
In 2013 76 percent of the bank’s spending went to its top ten beneficiaries. That year Boeing, the largest beneficiary of the bank for several years, received $8.3 billion in aid from the guaranteed loans taken out by the purchasers of their exports.
In his letter to Congress, Gov. Bentley hailed the Ex-Im Bank as a major job creator.
“Job creation is my number one priority as Governor, and the Export-Import Bank of the United States is a crucial tool that both small and large businesses in Alabama use to export goods around the world,” Bentley said. “Failure to provide a long-term reauthorization of the Ex-Im Bank will place Alabama based businesses at a significant disadvantage in the global marketplace. I strongly encourage Congress to pass a long-term reauthorization.”
But while Governor Bentley and other Ex-Im proponents praise its role in economic development, a 2011 Congressional Research Service report found that “Subsidizing export financing merely shifts production among sectors within the economy, but does not add to the overall level of economic activity, and subsidizes foreign consumption at the expense of the domestic economy.”
Several American airlines have spoken out against the Ex-Im bank in recent years, saying it unfairly subsidizes their foreign competitors, who are able to buy American-made Boeing planes with less risk.
“In spite of our government’s stated goal to foster open markets free of state subsidized competition, U.S. airlines today face that very competition from our own government in the form of Ex-Im loan guarantees—subsidies that are both massive and unnecessary,” said Delta’s CEO Richard Anderson in a congressional hearing on the Ex-Im Bank last summer.
A bipartisan Senate bill has been introduced that would reauthorize the Ex-Im Bank until 2019 and would require it to focus more on supporting small businesses.
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— Elizabeth BeShears (@LizEBeesh) January 21, 2015
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