Between 2009 and 2013, the Export-Import Bank of the United States authorized more than $16 billion in loans and loan guarantees to 34 state-owned foreign airlines for the purchase of Boeing aircraft, according to an analysis by Heritage Action.
Over the same period, the total value of loans and guarantees awarded by the bank was slightly less than $95 billion, of which Boeing customers accounted for just under $49 billion, or about 51 percent.
About one-third of the subsidies awarded to Boeing customers went to companies that are either owned or supported by foreign governments, raising questions as to whether the bank is using taxpayer dollars appropriately. (RELATED: Some ‘Beneficiaries’ of Export-Import Bank Oppose Re-Authorization)
In a recent letter to members of Congress, Lee Moak, president of the Air Line Pilots Association, claimed that Ex-Im subsidies to state-owned foreign airlines put domestic carriers at a competitive disadvantage, and asked Congress to ban the practice.
Michael Robbins, managing director of governmental and public affairs for the ALPA, told The Daily Caller News Foundation that “currently, the bank does not consider the worthiness of requests for Ex-Im financing,” and that the proposed reform “would put in place a test where the bank and the Treasury would have to look very carefully at each specific case.”
Robbins also offered Delta as an example of the competitive disadvantage created by Ex-Im subsidies. In 2011, Air India received financing from Ex-Im to purchase three Boeing 777 aircraft, which it needed in order to create a direct route from New York City to Mumbai. Delta already had such a route, but Air India was able to undercut Delta’s rates thanks to the discounted cost of its planes, and ultimately Delta was forced to abandon the route.
Ex-Im’s willingness to provide financing for state-controlled foreign companies can also have diplomatic consequences, especially when the foreign states in question are hostile to the United States.
When President Obama announced new sanctions against Russian companies earlier this month, it was revealed that one of the targeted companies had previously secured a loan guarantee from Ex-Im worth nearly $500 million to finance purchases from Boeing. The sanctions do not apply to existing investments, though, so Ex-Im has no obligation to cancel the deal even though it is at cross-purposes with the sanctions. (RELATED: Export-Import Bank Backed Two Russian Companies Hit By Sanctions)
The bank’s partiality toward Boeing customers also puts it at odds with Ccngressional mandates, according to an op-ed by Texas Republican Rep. Jeb Hensarling in the Daily Signal. Although “Congress requires that 20 percent of Ex-Im’s authorizations go to small businesses,” he claims that the bank “consistently fails to meet this statutory requirement.”
Hensarling’s assertion is supported by the bank’s FY 2013 annual report, which shows that authorizations for small businesses only amounted to about 14 percent of the total for that year.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact firstname.lastname@example.org.
Powered by WPeMatico
We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse. Read more.
Send this to friend