Apr 19 2016

Yellowhammer News: Shelby bucks Senate leadership, refuses to budge on Ex-Im Bank’s 'corporate welfare'

WASHINGTON — In spite of growing pressure from Senate Majority Leader Mitch McConnell, Senate Banking Committee Chairman Richard Shelby (R-Ala.) says he is “in no hurry” to confirm President Obama’s nominees to fill vacancies on the Export-Import Bank’s board of directors. Shelby’s refusal to back down — which has drawn cheers from conservative groups and criticism from a bipartisan coalition of big business interests — has dealt a crippling blow to the Ex-Im Bank because its board does not currently have enough directors to reach a quorum for any meeting.

The Ex-Im Bank was originally chartered by progressive icon Franklin D. Roosevelt in the 1930s. It was a “federal government corporation” that provides taxpayer-backed loans to foreign entities who want to buy American-made goods, but cannot secure credit in the private sector because of the risks. The bank’s charter mandates at least 20 percent its outlays benefit small businesses, but that rule has been frequently violated over the years.

In 2013, 76 percent of the bank’s spending went to its top ten beneficiaries. That year Boeing, the largest beneficiary of the bank for several years, received $8.3 billion in aid from the guaranteed loans taken out by the purchasers of their exports.

In spite of an intense lobbying effort by big business groups, President Obama and Republican congressional Leadership, the bank’s charter expired after Congress did not renew it by the June 30, 2015 deadline.

“After years of efforts to reform the Ex-Im Bank, it has become clear to me that its problems are beyond repair and that the Bank’s expiration is in the best interest of American taxpayers,” Shelby told Yellowhammer at the time. “Nearly 99% of all American exports are financed without the Ex-Im Bank, which demonstrates that subsidies are more about corporate welfare than advancing our economy.”

But a coalition of Republicans and Democrats ultimately managed to resurrect the bank by reauthorizing it in last year’s Transportation Bill.

However, as Diana Katz of the Heritage Foundation explains, the Ex-Im bank cannot issue any loans over $10 million without direct action by its board of directors. And since Senator Shelby is holding up the confirmations, the board does not have the required minimum of three active members to take action on anything.

“Checks and balances are a wonderful feature of our system of governance,” said Katz. “There’s no shame in using allowable procedures to check the crony impulses of Congress. No Ex-Im subsidies is the best policy, but limits on Ex-Im subsidies is the next best thing.”

Shelby reiterated his opposition to the Ex-Im Bank this week.

“I have some fundamental differences about the… Export-Import Bank, about the role it plays, the role it should play, or not play, and so forth,” Shelby told reporters, according to Politico. “So, I’m in no hurry to move those nominations.”

When asked if it mattered to him that President Obama’s latest Ex-Im board nominee worked for Congressman Jeb Hensarling, a staunch Ex-Im opponent, Shelby said that makes no difference to him.

“It doesn’t matter whether he’s a Democrat or he’s my uncle,” he said. “We have a fundamental difference. That’s corporate welfare.”