The last of the 2015 lobbying reports are in, and the top corporate spender turns out to have been the Boeing Company, at $21.9 million. Not coincidentally, the aerospace giant also outranks thousands of other firms in profiting from the subsidies doled out by the Export-Import Bank. Last year, Boeing benefitted from a whopping 69 percent of all Ex-Im loan guarantees (and 44 percent of total financing).
{mosads}There is nothing inherently wrong, of course, with Boeing or any other corporation spending its money to “petition” Congress. But that freedom comes with a regulating corollary: the right of others to compete for the policies of their choice. And that’s precisely the case with the hold on Senate confirmation of President Obama’s nominee to the Ex-Im board.
In other words, the battle against cronyism is not quite over.
The Export-Import Bank provides subsidized financing for foreign firms and governments to purchase American exports. The bank dates to the Franklin Roosevelt administration, and periodically requires a charter reauthorization by Congress.
Boeing, the National Association of Manufacturers (NAM) and General Electric, among others, lobbied forcefully for reauthorization of the bank charter, which expired on July 1, 2015. For Boeing, that contributed to a 30 percent increase in lobbying expenditures last year compared to 2014. NAM ended 2015 with $17 million in lobbying outlays, an increase of 37 percent over 2013. General Electric spent $21 million, up 38 percent from 2014.
Ultimately, this corporate enthusiasm for Ex-Im subsidies achieved a four-year reauthorization of the bank’s charter, but only after conservative opposition left this bastion of corporate welfare in limbo, without a charter, for five months. It was the first time in Ex-Im’s 81-year history that Congress allowed the bank charter to lapse.
Bank advocates paid a steep price for their victory, in terms of both dollars and principle. The reauthorization ultimately required a procedural trick known as a “motion to discharge.” That is, 62 Republicans joined ranks with all House Democrats to bypass the jurisdiction of the House Financial Services Committee and force a floor vote on reauthorization.
But all is not rosy for the cronies. Only two of the five board seats are currently filled, and three board members are needed to constitute a quorum. Without a quorum of board members, the bank is precluded from approving any financing deal in excess of $10 million. That excludes about 75 percent of the transactions approved in a typical year — the vast majority of which have benefited some of the most successful multinational corporations in the world.
The president has nominated attorney J. Mark McWatters for the bank board. However, Sen. Richard Shelby (R-Ala.), chairman of the Committee on Banking, Housing and Urban Affairs, has said he’s “in no hurry” to hold a hearing or a vote on the nomination. Other pending confirmations take precedence, he said.
But that really shouldn’t be a problem for bank officials, who have repeatedly maintained that serving small businesses is at the core of Ex-Im’s mission — despite all evidence to the contrary. So now they really do have the opportunity to make it so.
Boeing and its allies are waiting on Shelby to move the board nominee, but that’s the beauty of political competition. Sometimes the big money wins out, and sometimes the better policy prevails.
Katz is a research fellow in regulatory policy at the Heritage Foundation’s Roe Institute of Economic Policy Studies.