Seattle Times Loves Boeing, Export-Import Bank
“With billions at stake,” says the Seattle Times editorial board, “this state’s congressional Republicans, especially, now need to lead on the issue.”
This was the conclusion of a passionate defense of the Export-Import Bank, which the editorial board says is “of particular importance” to their state, “where about 40 percent of jobs are linked to international trade.”
The Bank’s charter is set to expire in September, which accounts for the editorial board’s sense of urgency. The Seattle Times lauds the Bank for the loans and loan guarantees it gives foreign companies to purchase goods and services from U.S. exporters, and they note that “90 percent of Ex-Im transactions support firms typically too small for commercial Banks.”
But in urging Congress to reauthorize the Export-Import Bank, the Seattle Times made two massive errors.
First, the editorial writers said the Bank was “vital to Boeing.” But by Boeing’s own admission, that’s just not true. The Wall Street Journal reported:
Mr. Zolotusky [a managing director at Boeing’s finance arm] said he was confident the company could find alternative funding sources for customers that wouldn’t require it to boost its support of aircraft sales, but said Boeing remains “mindful” of the debate over Ex-Im’s future.
Second, the editorial writers claimed the Bank “doesn’t cost taxpayers a dime.” Using fair-value accounting, the Bank will actually cost taxpayers $2 billion over the next decade. The Congressional Budget Office (CBO) explains:
Thus, the 10-year effects would be savings of $14 billion using FCRA [Federal Credit Reform Act of 1990] methodology and costs of $2 billion using the fair-value approach, a difference of $16 billion.
So, in a sense, the Seattle Times editorial board is right. “Billions” are “at stake.” American taxpayers are poised to lose billions of dollars over the next ten years if the Bank is reauthorized.
In addition to these two errors, the Seattle Times editorial board wrongly emphasises the Bank’s role in supporting small business. Proponents love to talk about the benefit of the Ex-Im Bank to small business in terms of the number of transactions or applications made, rather than the amount of financing provided.
The Heritage Foundation roundly exposed that for the market scheme it is. In the past five years, Boeing, the Bank’s top beneficiary, “has profited from 197 Ex-Im deals totaling $48 billion. Last year alone, Boeing-related financing comprised 30 percent of all Ex-Im activity.”
The bottom line is that the Ex-Im Bank doesn’t need to exist for the sake of Boeing, and taxpayers certainly don’t deserve to have billions of dollars if their hard earned money wasted on the Bank’s cronyism.