The battle over the future of the U.S. Export-Import Bank (Ex-Im) has been a humbling experience for the Tea Party.
Jim Lobe, last updated: May 16, 2012
Inter Press Service
For leaders of the right-wing populist "Tea Party" who have bragged about their growing influence – if not domination – of the Republican Party, the past week's battle over the future of the U.S. Export-Import Bank (Ex-Im) has been a humbling experience.
It's also been a reminder of the power enjoyed by Big Business, the corporate empires with globe-straddling interests, in both major parties in Congress.
While bipartisanship is an increasingly rare commodity in Washington these days, the interests of U.S.-based multinational corporations is something both Democrats and Republicans can agree on.
Such giants as the Boeing Company, backed by the U.S. Chamber of Commerce (USCC) and the National Association of Manufacturers (NAM), not only coaxed a three-year extension for Ex-Im operations out of Congress supposedly preoccupied with reducing the federal deficit, they also got an increase in lending authority from 100 billion dollars last year to 140 billion dollars by 2014.
"The three-year extension and healthy increase in lending level sends the right message to our foreign competitors," said John Hardy, the president of the Coalition for Employment Through Exports (CEE), one of an alphabet soup of business associations that lobbied for the extension.
"American companies that export have the support of their government to level the playing field and help make those sales," he added.
Created in the early days of Franklin Roosevelt's "New Deal", Ex-Im has survived and prospered under Republican and Democratic administrations alike, and has been headed by individuals from across the political spectrum (see, for instance, Right Web Profile: Phillip Merrill). This despite occasional complaints on the right side of the political spectrum that its operations amounted to government interference in the free market, and, on the left, that it amounted to "corporate welfare", a phrase ironically adopted by then- Sen. Barack Obama to describe the bank when he was running for president in 2008.
As originally conceived, Ex-Im's mission has been to create jobs at home by financing sales of U.S. exports to buyers overseas. Over the years, it has become a model for similar institutions, called export credit agencies (ECAs), established by other export-hungry industrialised countries.
In recent decades, its single biggest beneficiary by far has been Boeing, the giant Chicago-based aerospace firm, which has long depended on Ex-Im's support in its competition with Europe's Aerobus Industries. Last year, the bank provided 11 billion dollars in financing for Boeing's foreign customers – nearly a third of its total financing of nearly 33 billion dollars in deals in 2011.
While much of the bank's opposition in the past has come from Democrats who have described it as a corporate giveaway, not a single Democratic lawmaker in either house opposed its extension this year. This is in major part because it was successfully depicted as a key jobs programme at a time when official unemployment exceeds eight percent and could jeopardise the re-election of Democrats, from President Barack Obama on down.
"With our trade deficit and job situations, exports keep both labour and liberals quiet," said Robert Borosage, founder and president of the progressive Campaign for America's Future.
But the re-authorisation, with higher lending limits, also fits perfectly with Obama's two-year-old "National Export Initiative" which calls for doubling U.S. exports from 1.57 trillion dollars in 2009 to more than three trillion dollars in 2015.
Opposition to the bank this year came from the right, particularly from the "Tea Party" Republicans, who won dozens of seats in Congress in the party's 2010 landslide, and their wealthy backers, including the Club for Growth, a coalition of 527 right-wing and libertarian organisations which raises money for like-minded candidates, and Heritage Action for America, the lobbying affiliate of the far-right Heritage Foundation.
Stressing Ex-Im's origins in the New Deal – whose many government programmes are viewed as "socialistic" or worse by Tea Party adherents and donors – right-wing critics have argued that it constitutes a destructive interference in the free market similar to the "bank bail-out" that followed the September 2008 financial meltdown on Wall Street.
By funding the bank, argued Sen. Jim DeMint, who is widely considered the de facto leader of the Tea Party in the Senate, "Washington sends competitors the signal that the easiest way to get ahead isn't to make better companies, but to lobby Congress for special taxpayer benefits."
"And so a vicious cycle emerges. Washington's attempt to centrally manage the economy only transfers wealth from taxpayers to corporations, it takes those corporations' eye off the ball, dulling our economy's competitive edge and slowly making America less and less competitive in the increasingly competitive global market," he wrote in the Washington Examiner in March.
But a month-long multi-million-dollar lobbying campaign mounted by Boeing and the big business associations apparently worked its magic, and, when the votes were counted in the more Tea-Party-heavy House, only 93 members – all Republicans – out of the total 435 members voted against re-authorisation. That was slightly more than a third of the 242 Republican House members.
"In the end, the vote appeared to show that old guard business groups still have muscle in the Tea Party era," the New York Times observed.
One week later, the Senate voted by a 78-20 margin to extend the Bank's charter through 2014. Of the dissenters, 19 were Republican, while the 20th was Sen. Bernie Sanders, a self-described democratic socialist who normally votes with the Democratic caucus.
"It shows the limits of Tea Party power in the Republican caucus," Borosage told IPS. "For all the talk about how they control the caucus, when the business community talks, they seem to get rolled."
The reauthorisation was applauded by the business lobby, with U.S. Chamber of Commerce President and CEO Thomas Donohue saying, "When other countries are providing their own exporters with an estimated one trillion dollars in export finance – often on terms more generous than Ex-Im can provide – failure to reauthorise Ex-Im would amount to unilateral disarmament and cost tens of thousands of American jobs."
In addition to Boeing, other big recipients of Ex-Im's largesse include KBR (previously known as Kellogg Brown & Root and owned by Halliburton, Inc.), the global engineering, construction, and private military contracting company; General Electric; and Caterpillar, Inc.
Ray Takeyh is a senior fellow at the Council of Foreign Relations and a former official in the Obama State Department who has been called Washington’s “go-to” Iran analyst. He has for years taken a stridently alarmist tone with respect to Iran’s nuclear program and has been critical of the Obama administrations nuclear negotiations with Iran. In July 2014, Takeyh co-authored a report by the Jewish Institute for National Security Affairs that called for increasing “pressure” on Iran during the on-going negotiations.
Michele Flournoy is a former undersecretary of defense for policy in the Obama administration and head of the “liberal hawk” Center for a New American Security. Recently named to the president’s Intelligence Advisory Board, Flournoy has warned against a preemptive U.S. or Israeli strike on Iran, although she once told the rightwing Jerusalem Post that “Israel can rely on Obama to stop a nuclear Iran. … [T]he policy is not containment and I think he is serious about that.” Flournoy has also called for increases in defense spending, writing in an op-ed with former Bush Pentagon official Eric Edelman that "the U.S. military must be able to deter or stop aggression in multiple theaters, not just one, even when engaged in a large-scale war.”
Ashton Carter, former deputy secretary of defense in the Barack Obama administration, is a longtime academic and Pentagon bureaucrat who has advocated using military force as part of controversial nuclear counter-proliferation programs. During his time as deputy defense secretary, Carter strongly criticized cuts in the defense budget. One observer responded to Carter’s criticisms arguing that the cuts “resulted in part from the inefficient and unsound choices the Pentagon has made over the past decade, much of it occurring on Carter’s own watch.” Carter was recently appointed senior executive at the Markle Foundation, an organization that “works to realize the potential of information technology to address previously intractable public problems, for the health and security of all Americans.”
Former Secretary of State Condoleezza Rice, a fellow at Stanford’s Hoover Institution, is now arguably better known as a member of the NCAA’s College Football Playoff selection committee. As an official in the George W. Bush administration, Rice was closely associated with the government’s warrantless wiretapping and interrogation programs, during which detainees were tortured. In 2014, it was revealed that she helped kill a 2003 New York Times story about a failed CIA attempt to sabotage Iran’s nuclear program. The journalist behind the story, James Risen, eventually put the story in a book and endured several years of court battles with the U.S. government over the identity of his sources, which he eventually lost.
A professor at Johns Hopkins School of Advanced International Studies, Eliot Cohen has been described as "the most influential neocon in academe." Cohen has been a vociferous critic of the Obama administration, accusing it of being insufficiently committed to using military force abroad and "promiscuous" in its diplomacy with traditional U.S. adversaries. Cohen, who had multiple roles in the Bush administration, recently was given a position at the “liberal hawk” think tank Center for a New American Security, which is widely viewed as having played an important role shaping many of the Obama administration’s military policies.
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