Dems pushing for Corporate Welfare. This could get sticky.

Another government shutdown? I don't think it'll come to that. Here's the HuffPo article in it's entirety.

Quote :

WASHINGTON -- Congress is gearing up for another government shutdown, this time over a minor federal agency that most Americans have never heard of: the Export-Import Bank.

Ex-Im, as it's known in Capitol Hill parlance, provides cheap loans to foreign companies who want to buy U.S.-manufactured goods, particularly Boeing airplanes. The agency has limited macroeconomic significance, but its very existence has ignited a holy war within the Republican Party, where hardliners view the bank as an exercise in corporate welfare.

Ex-Im's formal authorization expires Sept. 30, the same date congressional funding for the entire federal government runs out. If the Democratic-led Senate insists on reauthorizing and funding the bank, the Republican-controlled House can reject the measure, and shut down the government just five weeks before the November elections.

Democratic leaders smell election-year blood -- an opportunity to leach campaign funds from corporate donors that have traditionally backed the GOP. And a Republican-led government shutdown over an obscure agency may be the Democrats' best chance to take back the lower chamber. House Minority Leader Nancy Pelosi (D-Calif.) personally lobbied individual members of Congress to sign on to a bill from Rep. Denny Heck (D-Wash.) to reauthorize the bank through 2021, and also pressed members to back the Heck bill during Tuesday's weekly caucus meeting....

I hate the government subsidizing anything. If an industry cannot make it on it's own against fair competition, it should go by the wayside.

Looks like the corporate weenies at Boeing are doing pretty well. 2013 salary and equity/stock

Name and Title
W. James McNerney Jr.
Chairman and Chief Executive Officer $23,263,562

Shephard W. Hill
President, Boeing International and Senior V.P., Business Development and Strategy
$6,775,173

John J. Tracy
Senior V.P., Engineering, Operations and Technology and Chief Technology Officer
$6,465,968

Dennis A. Muilenburg
Vice Chairman, President and Chief Operating Officer
$7,003,959

Gregory D. Smith
Executive V.P. and Chief Financial Officer
$3,567,082

Fiscal Year Ended in 2013

ExIm also provides loans in energy... like renewables, and for US exporters. In my experience these are not small loans. They are in amounts that -- if you don't support government welfare -- might make you feel sick to your stomach.

I once saw a flip chart that showed the top 20 (I think) businesses and countries and their respective dollar amounts that received these loans in the past x number of years and it was pretty disgusting. DOW Chemical, Boeing, GE, Siemens, Bechtel; India, China, Mexico... you get the idea. The businesses were not generally (Solyndra was on the list) ones who are strapped for cash and the countries are those that take our manufacturing jobs from the US labor force. The chart ticked me off pretty badly... Now I see they're talking about bailing ExIm out. Amazing. Those bastards should have more money than they know what to do with.

riceme wrote:

ExIm also provides loans in energy... like renewables, and for US exporters. In my experience these are not small loans. They are in amounts that -- if you don't support government welfare -- might make you feel sick to your stomach.

I once saw a flip chart that showed the top 20 (I think) businesses and countries and their respective dollar amounts that received these loans in the past x number of years and it was pretty disgusting. DOW Chemical, Boeing, GE, Siemens, Bechtel; India, China, Mexico... you get the idea. The businesses were not generally (Solyndra was on the list) ones who are strapped for cash and the countries are those that take our manufacturing jobs from the US labor force. The chart ticked me off pretty badly... Now I see they're talking about bailing ExIm out. Amazing. Those bastards should have more money than they know what to do with.

In situations like these and others....'sick to the stomach' pretty much sums it up... This administration then has the nerve to say they are for the middle class workers and have defended jobs from leaving the US.... Wonder if the middle class workers can expect a bailout anytime soon...that is if the middle class even exists getting closer to shrinking....but then there's all the entitlements waiting...

Totally agree. Subsidies are for the birds, and ExIm Bank is always pitched as being great for American manufacturing because it helps us to sell goods to foreign countries. I don't think it really works that way. Most of these guys figure out pretty quick that it costs a lot less to set up shop overseas than to export because of labor and transportation costs. So we end up losing jobs. Yay!

*Just noticed that I wrote "government welfare" instead of "corporate welfare" in my first post. That must have been some sort of Freudian slip. :]

I am not familiar with this website, but I just found some information similar to what I referenced in my first post. It's linked here:

http://www.hardhatters.com/2013/06/the-u-s-export-import-bank-playing-with-your-money-overseas/

From what I read these are not subsidies this bank is giving. It is loans to buy our exports which help us.They do not take away manufacturing jobs. They buy our goods and export them.

To subsidize something is to aid a private enterprise with public money. That is exactly what ExIm Bank does.

I worked in manufacturing for a long time and can promise you that GE, Boeing, Siemens, Rolls Royce,... probably 99% of the names on that list have set up manufacturing facilities in China and Mexico that shut down American factories in order to cut labor and transportation costs. The *businesses* take away American manufacturing jobs, not ExIm Bank.

I understand that but a loan is not a subsidy. I understood the article to say loan. Maybe I'm not understanding correctly what they're saying but isn't the money paid back?

Right, but the premise is that these private enterprises could not take place without these public monies and no other bank will risk these "loans." That's where it becomes a subsidy. To take it a step further look at Solyndra, as we clearly did not get the public money back from that "loan."

riceme wrote:

Right, but the premise is that these private enterprises could not take place without these public monies and no other bank will risk these "loans." That's where it becomes a subsidy. To take it a step further look at Solyndra, as we clearly did not get the public money back from that "loan."

Bet that somewhere, somehow, there were some in the Solyndra power structure that made a little money...

Well then all govt.loans can be categorized as subsidies like students loans,VA,Freddie and Fannie Mae,SBA and such.

mediawatcher wrote:

riceme wrote:

Right, but the premise is that these private enterprises could not take place without these public monies and no other bank will risk these "loans." That's where it becomes a subsidy. To take it a step further look at Solyndra, as we clearly did not get the public money back from that "loan."

   Bet that somewhere, somehow, there were some in the Solyndra power structure that made a little money...

There is no doubt in my mind that they did. If you recall, I worked for Enron before GE bought us out of the bankruptcy... these guys always pay themselves first.

koolkat wrote:

Well then all govt.loans can be categorized as subsidies like students loans,VA,Freddie and Fannie Mae,SBA and such.

The difference is that these are multinational corporations that are taking taxpayer dollars to fund corporate enterprise, not individuals or small mom & pop businesses, and the loans are so high risk that no one else would loan them the money. But sure... I agree that those things are subsidies as well. When I got my student loans for school it was called a federally subsidized loan.

To add insult to injury, these corporations pay a pittance in taxes. GE pays an average of about 7% in federal taxes each year when their US profits are around $5BN (that is JUST the US). They are one of the top corporations to receive ExIm Bank loans... $1.5BN in 2011 - 2012.

Lots of companies get subsidies by their governments.  Competitors in different countries bitch.

Take the Boeing - Airbus arguments, for example.  At - http://money.cnn.com/2012/03/12/markets/boeing-airbus-wto/

Quote :

...In 2004, EU authorities claimed Boeing (BA, Fortune 500) received $19 billion in unfair subsidies from federal and state governments between 1989 and 2006.

The U.S. government filed a similar claim the same year against Germany, France, the United Kingdom, Spain and the EU over subsidies given to Airbus, owned by European Aeronautic Defense & Space Co. (EADS).

According to Monday's ruling, the WTO's appellate body said Boeing received between $3 billion and $4 billion in U.S. subsidies, according to Kirk.

By contrast, the WTO said in December that Airbus received $18 billion in subsidies from European governments...

I started this thread because it is the Dems that are pushing for "sales assistance" and I associate that type of practice with the Republicans.  Y'know, the stereotypes say that Dems are for helping the little guy and the Republicans are supposedly leaning toward helping big business.

Eric wrote:

Lots of companies get subsidies by their governments.  Competitors in different countries bitch.

Take the Boeing - Airbus arguments, for example.  At - http://money.cnn.com/2012/03/12/markets/boeing-airbus-wto/

Quote :

...In 2004, EU authorities claimed Boeing (BA, Fortune 500) received $19 billion in unfair subsidies from federal and state governments between 1989 and 2006.

The U.S. government filed a similar claim the same year against Germany, France, the United Kingdom, Spain and the EU over subsidies given to Airbus, owned by European Aeronautic Defense & Space Co. (EADS).

According to Monday's ruling, the WTO's appellate body said Boeing received between $3 billion and $4 billion in U.S. subsidies, according to Kirk.

By contrast, the WTO said in December that Airbus received $18 billion in subsidies from European governments...

I started this thread because it is the Dems that are pushing for "sales assistance" and I associate that type of practice with the Republicans.  Y'know, the stereotypes say that Dems are for helping the little guy and the Republicans are supposedly leaning toward helping big business.

Sorry, I was probably too subtle. That was why I mentioned that ExIm also finances a lot of renewables, which greatly interests most democrat politicians.

Regarding Boeing, I believe they are the global top recipient of government subsidies from many different countries.


Just found this great article... a must-read:

Quote :

The Battle For The Ex-Im Bank: Small Potatoes Or Large Stakes?

Created in 1934, the Export-Import Bank, “the official export credit agency of the United States” in the words of Ex-Im’s Inspector General, Osvaldo Gratacós, has been reauthorized 16 times. The current authorization expires on September 30, 2014. Proponents want Congress to pass a five-year extension.

The political alignment and alliances on this issue are intriguing. The fight over reauthorizing Ex-Im highlights the major fault line within the Republican Party. Free market, small government, tea party Republicans oppose reauthorization on principle—they object to government subsidies and privileges being granted to a favored few. The Chamber of Commerce, establishment, moderate Republicans want to perpetuate the bank for pragmatic reasons—money and a fear (with some justification) that withdrawing support for government aid to businesses drive some businessmen into the Democrat Party.

Speaking of Democrats, President Obama and progressive Democrats are fighting for renewal alongside the Chamber of Commerce and National Association of Manufacturers. How odd. Ex-Im predominantly helps big businesses, particularly Boeing , whose overseas customers received a whopping 82 percent of the bank’s loan guarantees in 2012. Progressives generally denounce government favors to Big Business as cronyism. Indeed, when campaigning for president in 2008, President Obama derided Ex-Im’s corporate welfare. Yet, since becoming president, he has changed his tune. Ex-Im’s annual portfolio has increased 94 percent to $113.8 billion per year in five years—a sliver of which was a $10 million guarantee to the president’s friends at Solyndra as part of Ex-Im’s green energy quota.

Syndicated columnist Robert Samuelson doesn’t particularly like Ex-Im, but argues against letting its charter expire this year. He thinks there are bigger fish to fry. Indeed, the Ex-Im Bank is involved with only two percent of American exports, has an annual operating budget of $90 million (small potatoes by Washington standards) and makes no appreciable difference in the federal budget deficit (proponents claim it returns a small profit to the Treasury, while MIT’s Debbie Lucas counters that Ex-Im’s accounting masks small annual losses).

Despite Ex-Im being comparatively small potatoes compared to larger and more wasteful federal agencies that deserve to be terminated, the fact is that, at present, there is no conversation in Washington about shutting down any larger agencies. The stakes here are enormous for the future direction of the country: If those who want to rein in federal spending can’t eliminate even one small bureaucracy, what chance do they stand of pulling the plug on any of the big ones? If Congress does not reauthorize Ex-Im, it will be a symbolic, if fiscally irrelevant, victory for those who want to shrink government; if it does reauthorize, it will signify business as usual.

There are two powerful reasons why Congress should not reauthorize the Ex-Im Bank:

1.) It doesn’t follow its own rules. I’m not referring here to allegations of fraud, but to its everyday functions. The Bank’s stated purpose is to provide financing assistance for export transactions that otherwise would not take place; further, it is forbidden to compete with private sector corporations. In fact, Ex-Im does not comply with either of those stipulations.

First, it is inconceivable that Boeing can’t find private sources for financing its sales. Second, since Ex-Im’s default rate is only .2111 percent (according to their own fact sheet), the loans they are making evidently are nowhere near being so risky as to deter private lenders. Third, Boeing undoubtedly prefers to collaborate with Ex-Im instead of private alternatives because it is implicitly backed by the federal treasury and can offer lower interest rates than private-sector lenders. Like so many other federal agencies, Ex-Im seems to be unaccountable and free to defy its stipulated guidelines with impunity.

2.) The most fundamental reason for letting the bank wind down is that it doesn’t do anything that private-sector lenders couldn’t do. Capital markets are far more developed today than when the bank was chartered in 1934. As Veronique de Rugy of the Mercatus Center stated with such logical clarity in her congressional testimony last week, “if the Bank is making profits, that is an argument for privatization. If the Bank is suffering losses, that is an argument for shutting it down.” In other words, the Ex-Im Bank is either redundant, taking profitable business away from private companies, or uneconomical, therefore unneeded.

My prediction: Political expediency will win out over sound economics, and Congress will reauthorize Ex-Im. Maybe as a consolation prize to me, Congress could at least rename it the “Export Subsidy Bank.” In researching the Bank, I failed to find a single activity pertaining to imports. Ex-Im is all about exports, so let the name fit the reality.

http://www.forbes.com/sites/markhendrickson/2014/07/03/the-battle-for-the-ex-im-bank-small-potatoes-or-large-stakes/

I see what you're saying Riceme. We have so many things in this country that need to be fixed and all they do is fight w/ each other.