The U.S. aerospace industry hailed the December 3 passage by Congress of legislation that renews the operating authority of the Export-Import Bank more than five months after that authority expired. The dispute over preserving the export credit agency pitted aerospace and other manufacturers against arch conservative lawmakers who accused the institution of cronyism and skewing free-market competition in favor of large companies.
Legislation providing for a four-year reauthorization of the Ex-Im Bank is contained in a $305 billion highway and mass transit spending bill the House and Senate each passed by wide margins and sent to President Obama for his signature. With the passage of the five-year FAST, or Fixing America’s Surface Transportation, act, the first long-term federal highway legislation in a decade, Congress now faces a decision to reauthorize the Federal Aviation Administration, which has temporary operating authority until March 31.
The Ex-Im Bank provides loan guarantees and other financing support to foreign buyers of U.S. products, including widebody airliners manufactured by Boeing, its biggest beneficiary. Its operating authority expired in July when Congress broke for its summer recess without voting to reauthorize the agency. However, the bank maintained responsibility for its outstanding loan agreements and remained funded during the interim period. There were no layoffs.
“By reopening the Export-Import Bank, Congress has taken strong action enabling American exporters and the skilled workers they employ to compete successfully in tough global markets,” Boeing president and CEO Dennis Muilenburg said in a statement. “With these votes, Congress did the right thing for workers at companies large and small across the nation, including the 1.5 million workers at nearly 15,000 U.S. companies that help Boeing design, make and support America’s aerospace exports.”
The Aerospace Industries Association (AIA), which represents U.S. aerospace and defense contractors, said it was “relieved and delighted” by the congressional action to reauthorize the bank, which sends “a clear signal that we are serious about competing in the global marketplace and will take the necessary steps to ensure American taxpayers have a level playing field.”
But “one last item remains,” the AIA added. The bank’s governing board does not currently have the required number of directors to approve transactions greater than $10 million, and filling those positions will require further cooperation by the Senate and the White House to nominate new members, the association said.
Not all entities welcomed the bank’s revival. The reauthorization “is a knife in the back of [the] conservative grassroots,” said FreedomWorks, a conservative advocacy organization. “Supporters of the Export-Import Bank acted like the sky was falling when Congress didn’t renew its charter this summer,” it said. “Obviously, these Chicken Littles were proven wrong. The sky didn’t fall, the economy didn’t crash, and taxpayers were better off without having to bear the burden of risky loans doled out to politically connected corporations and Beltway insiders.”