By Dick Miller
WE.CONNECT.DOTS: The same philosophical split preventing the Republican Party from moving forward on the immigration issue, threatens hundreds of high-paying Pennsylvania jobs.
If Congress does not vote to re-authorize the Export-Import Bank of the United States by the end of June, a popular way to finance export orders will cease. Both GE Transportation, based in Erie, and Caterpillar in York County say if this type of financing becomes unavailable the order books will shorten and layoffs will occur.
General Electric sells locomotives to China with this type of financing and the engines are made at its plant in Grove City. Caterpillar sells construction equipment in the Pacific Rim and elsewhere. Also at risk are hundreds of jobs at suppliers to these two companies and other small manufacturers.
For example, GE used this financing for sale of $720 million worth of locomotives to foreign buyers in 2014, according to the Erie Times-News. The deals are made with both outright financing from the bank which receives appropriations from the US Treasury as well as government guarantees of loans from private banks.
While status of the Ex-Im Bank has always been sort of hazy, performance on the loans and guarantees have not been an issue. The Philly Business Journal reports “small businesses are beneficiaries of 90 per cent of its financial transactions, but most of the agency’s dollars support exports by large businesses.” The largest user is aircraft builder Boeing. Critics refer to it as the “Bank of Boeing.”
President Franklin Roosevelt formed the bank 80 years ago. Recently the threat of extinction is deemed more possible because it requires Congress to do what it has become best at – taking no action.
Many Republican lawmakers believe it is a form of corporate welfare that does not belong in a capitalistic, conservative society. Big business, of course, points to the number of US jobs that are based on goods manufactured for export.
If a straight up vote for continued operation of the Ex-Im Bank were taken today passage would be assured. President Obama and nearly all Democrats would join those Republicans under the influence of big business. PA Congressmen Mike Kelly and Glenn Thompson join Senator Bob Casey in support of continuance. Sen. Pat Toomey does not.
Congress does not work the way it did. One of the methods Republicans adopted to extend power is by adopting the “rule of the majority” in any legislative body under GOP control. This means no reaching across the aisle; compromise is a bad word, and Democrats should be part of any solution as infrequently as possible. Legislation in a GOP-ruled chamber does not move unless their members can provide all votes necessary for passage or defeat.
Hillary is for continuation of the Ex-Im Bank, most GOP presidential candidates are not. They are focused on getting votes from conservatives who want less government and taxes and no abortion or gun control.
Not everyone believes Ex-Im always sustains American jobs. Boeing has used this financing to build so many airplanes for foreign airlines that Delta Airlines complains the subsidized competition hurts their business.
Bottom Line: Renewal of the Ex-Im bank is another “Washington Crisis du jour.” Until the GOP leadership is agreeable to a rules change that would return individual lawmakers more power, stalemates will continue.
