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.
Max Boot, a neoconservative military historian based at the Council on Foreign Relations, has urged the United States “unambiguously to embrace its imperial role” and asserted that “America should be the world’s policeman.” Boot, who is also a veteran of the Project for the New American Century and a lifelong Republican, is among a small group of neoconservatives—many of whom are concerned about the rise of an anti-interventionist faction in the GOP—to express tentative support for a potential presidential candidacy by Hillary Clinton, whom Boot has credited as “a principled voice for a strong stand on controversial issues, whether supporting the Afghan surge or the intervention in Libya.”
Despite Robert Kagan's deep ties to the neoconservative movement, the Brookings Institution historian has carefully sought to frame his work in a bipartisan manner. Kagan's efforts have earned him an audience in the Obama White House, where he has had the opportunity to exchange views with the president. Now, with a resurgent anti-interventionist wing challenging the neoconservatives for dominance in the GOP, Kagan has hinted that he would consider backing a presidential bid by Hillary Clinton, who has frequently expressed hawkish views. "I feel comfortable with her on foreign policy," said Kagan, a lifelong apologist for U.S. "superpower."
Ahmed Chalabi, the onetime Iraqi exile who aggressively courted neoconservative support for the U.S. invasion of Iraq by spreading falsehoods about Saddam Hussein's weapons programs, long ago fell out of favor in Washington and has never enjoyed much popular support in Iraq, where he currently serves in parliament. But amid Iraq's current political crisis, Chalabi has been floated as a possible compromise candidate to replace Nouri al-Maliki as the prime minister of Iraq—and some of his old neoconservative allies, especially Richard Perle, have expressed joy at the possibility. Concluded a writer for the Washington Post, "It seems a sad indication of the absurdity of the past 11 years of Iraqi history that the man who helped dupe U.S. officials into that invasion should now be backed in his bid for leadership by those very same people."
Reuel Marc Gerecht, a senior fellow at the neoconservative Foundation for Defense of Democracies, has advocated bombing Iran for years, once admitting that even his mom thought he’d “gone too far.” He recently wrote that U.S. credibility "is overwhelmingly built on Washington’s willingness to use force" and lamented that the Obama administration's reluctance to intervene in Syria's civil war amounts to "retreat" from the region. Dismissing the supposed moderation of Iranian President Hassan Rouhani, Gerecht has also advised U.S. policymakers to "forget diplomacy" with Iran and instead bolster sanctions and military threats.
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