“Looks to me like they have the votes, and I’m going to give them the opportunity.”
With those 16 words to the Associated Press about the future of the Export-Import Bank, Senator Mitch McConnell began charting a new course just six months into his tenure as majority leader. As Senate Majority Whip John Cornyn explained earlier this year regarding amendments and ending debate, “The only person who makes the decision is the leader.” To date, Majority Leader McConnell has not allowed a non-budget amendment to pass that he and a majority of his conference opposed.
Read the entire memo.
Fourteen months ago, the taxpayer-backed U.S. Export-Import Bank authorized a $700 million loan to Australia’s richest person, mining heiress Gina Rinehart. Today, Australia’s Business Spectator (sub. req’d) reported the new mining project “is set for very large losses.”
In the short term, the capital costs for Gina Rinehart’s Roy Hill mine are almost certain to blow out — and a lower iron ore price will make matters worse.
If the current iron ore price decline continues into 2017 and beyond, then Gina Rinehart’s massive $10 billion Roy Hill mine project is set for very large losses when it starts production next year.
And if the reports of safety problems in the construction phase are right, then the capital costs will blow out beyond $10bn, especially if unions start playing hard ball, as they often do when there is a safety cause.
The slump in iron ore didn’t come out of the blue, though. According to the Business Spectator, “When Roy Hill was being conceived, there were already dark clouds on the iron ore pricing scene.” Will Rinehart’s Roy Hill Holdings be able to repay the $700 million it owes American taxpayers? We’ll find out in about seven years.
Yesterday, in a speech at Hillsdale College’s Kirby Center, House Budget Chairman Rep. Paul Ryan (R-WI) N/A% expressed his desire to end the Export-Import Bank, which expires at the end of September. Ryan’s primary point though was that conservatives and Republicans should let Democrats be the party of corporate welfare and cronyism:
“My friend Rep. Jeb Hensarling (R-TX) 83% has recently launched a great challenge against the crony capitalist economy, and in particular, against one of its manifestations, the Export-Import Bank. But the bank is just one example of how bureaucratic government is corrupting free enterprise through and through. Conservatives must stop defending this. Cronyism is the Progressives’ project for economic control. Let them defend it.”
In a letter to the editor in the Spokesman-Review, Edmund Schweitzer III writes:
“Some Schweitzer Engineering Laboratories customers have used the Ex-Im Bank for financing, at their choosing. SEL does not depend on it, nor encourage it. If the Ex-Im Bank were to disappear, I believe buyers and sellers would find attractive commercial options unencumbered by politics and special interests.”
Mr. Schweitzer’s position is clear: Thus, at this moment, I believe the charter should not be renewed.
Ironically, a Spokesman-Review editorial in 2012 cited his company as a reason the Bank should be reauthorized:
“Although Boeing Co. is by far the biggest beneficiary, in the last five years several Eastern Washington companies – SCAFCO in Spokane, Schweitzer Engineering Laboratories in Pullman, and Colmac Coil in Colville – have done more than $3 million worth of foreign business with Ex-Im’s help. Dozens, if not hundreds, of jobs have been created or sustained.”
The fifth district company, represented by Rep. Cathy McMorris Rodgers (R-WA) 58%, has received $3.6 million in financial assistance from the Bank since 2007, with $1.6 million coming since 2012.
Congress should End Ex-Im.
So what exactly does the Export-Import Bank do with your hard-earned money? Check out this money trail: