Last week General Electric joined a growing list of major corporations to lash out at Congress for allowing the U.S. Export-Import Bank charter to lapse earlier this year.
On Tuesday, the industrial giant announced it would create 500 jobs to France instead of the U.S. because it can longer access the kind of financing once offered by the now shuttered agency.
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“Congress left us no choice when it failed to reauthorize the Ex-Im Bank this summer,” said John Rice, GE’s vice chairman.
The fate of the New Deal-era credit agency has divided congressional Republicans for much of the last year. House Speaker John Boehner (R-OH), whose own support for the bank has been uneven, has deferred to conservatives who argue the bank is the post-child for “crony capitalism” that favors large corporations over small businesses.
The hardliners successfully blocked its renewal in June.
But GE’s announcements suggests that more companies may start blaming Congress for destroying America jobs.
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Even so, the trade bank’s opponents are unrepentant in the face of GE’s announcement and don’t plan on letting the agency return from the dead any time soon.
“We’re winning,” said Rep. Jim Jordan (R-OH), chair of the conservative House Freedom Caucus.
“Middle class tax payers don’t want their money going to help get special deals for the biggest corporations in the country,” he added. “I love those big corporations, they’re great success stories … But even Boeing said back during the debate this summer ‘We’ll finance these deals on our own’ and middle class tax payers shouldn’t have to pay for that.”
The aerospace giant did say it might temporarily provide financing for some aircraft purchases by airlines whose portfolios are tied to the bank’s future.
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“I understand that crony capitalism is an easier way to do business simply getting politicians in Washington to carve out billions in favors for giant corporations, but it’s not what congress should be doing,” said Sen. Ted Cruz (R-TX), a 2016 presidential contender and one of the agency’s harshest critics in the Senate.
Even though other financial issues, like funding the federal government and avoiding a shutdown, top the congressional agenda, the bank remains on the minds of Democrats, including President Obama.
In speech last week to the Business Roundtable in Washington, he urged executives to pressure Congress to renew the agency.
“I think you have to flood the zone and let them know this is important,” Obama said, suggesting a revival could happen as part of larger negotiations on the budget.
“It is mind-boggling this wasn’t reauthorized a year ago,” he said.
The cases made by GE and Obama failed to persuade House Financial Services Committee chair Jeb Hensarling (R-TX), a staunch opponent of the bank.
“It’s troubling that the head of President Obama’s Jobs Council [GE chairman and CEO Jeffrey Immelt] is announcing GE is leaving Connecticut because the state’s taxes are too high and is choosing to send jobs overseas because U.S. taxpayer-provided subsidies are too low," he said in a statement.
On Thursday, House Democrats forced a vote on a measure to reauthorize the bank and were promptly defeated.
“Republicans’ continuing refusal to reauthorize the Export-Import Bank is costing jobs and crippling American competitiveness in the global economy,” House Minority Speaker Nancy Pelosi (D-CA) said in a statement.
But it’s not just Democrats who want the bank to make a comeback. The Palmetto State’s two Republican Senators were not happy with the news, either.
Of the 500 GE jobs going overseas, 400 will come from a cluster of sites, including a power turbine plant in Greeneville, South Carolina.
“This is bad news and I fear even worse news is still to come,” said Sen. Lindsey Graham, another White House hopeful. “The sooner Congress reauthorizes the Export-Import Bank and puts us back on a level playing field, the better it will be for workers in Greenville and across our state. The United States should not unilaterally disarm, yet that is exactly what we are doing.”
A spokesman for Sen. Tim Scott said the bank “has returned $7 billion [in] taxpayer dollars to the treasury while helping … South Carolina businesses and other businesses interested in exporting. It’s clear that Ex-Im is connected to a number of jobs.”
Outside groups who opposed the bank, such as Freedom Partners, reject those arguments, saying states couldn’t lose out on jobs that didn’t actually exist in the first place.
While the path forward may seem murky for some, for Jordan the way is crystal clear.
“We’re the party of free enterprise, we’re the party of free markets, we’re the party of competition. We’re not the party of cronyism, we’re not the party of special deals for big companies,” he said.
The Export-Import Bank “should go away and we have a natural wind-down process,” he added, noting that existing contracts issued by the agency are still honored and “that’s fine.”
“It’s the most natural progression, natural wind-down you could come up with and, oh, by the way, it happens to be the free enterprise and the free -market way of doing things,” Jordan said.
