President Obama on Wednesday reauthorized the Export-Import Bank, raising its lending authority 40 percent to $140 billion by 2014, one day before the 78-year-old federal bank would have been shut down had he not signed the bill.
Increasing the bank’s lending power ensures “that we’re not just known as a nation that consumes,” the president said at a signing ceremony. “We’ve got to be a nation that produces.”
Republicans quickly accused the president of hypocrisy, pointing out that he had called the bank “little more than a fund for corporate welfare” during the 2008 campaign and promised to eliminate it.
They also reminded voters that despite Mr. Obama’s longtime disdain for corporate jets and corporate jet owners, the bill includes $1 billion in subsidies for jet manufacturers, which have experienced a steep decline in demand in recent years.
“I’m sure you all remember the good old corporate jets the president used to rail against on the stump - he must have forgotten about that bright shiny object already because the reauthorization includes $1 billion for corporate jet manufacturers,” a Republican National Committee spokeswoman said in a release. “Goes to show you it’s more rhetoric and less principle when Obama is on the stump.”
As part of his jobs proposal last year, Mr. Obama wanted to raise taxes on corporate jets by decreasing the number of years their owners could depreciate their cost from seven to five years, a plan the White House estimated would have raised $3 billion in revenue.
The Export-Import Bank’s supporters in the business community cheered the president’s action.
“Great news for thousands of American workers and businesses of all sizes,” said John Murphy, vice president for international affairs at the U.S. Chamber of Commerce.
The National Association of Manufacturers also supported reauthorizing the bank. It pointed out that last year the bank supported nearly 290,000 American jobs.
“Small and medium-sized manufacturers will greatly benefit, helping them reach new markets with their exports and create jobs,” said Lauren Airey, director of trade facilitation policy at NAM.
The bank provides working capital guarantees, export credit insurance and loan guarantees, as well as direct loans to companies that send a significant portion of their products to overseas markets.
The Boeing Co. is a major beneficiary of Ex-Im Bank funding, with the airplane manufacturer’s foreign carrier customers using the bank to finance the purchases of modern passenger jets.
In 2011, the bank generated $700 million in revenues from fees charged for its loan guarantees. It brought in a total of $3.4 billion between 2006 and 2010.
Supporters argue the bank keeps American companies competitive overseas by offering loans and credit guarantees to international customers who otherwise could not afford to buy American products, but some free-market conservatives argue the bank distorts the market and is little more than another hand in taxpayers’ pockets.
Mr. Obama has set a goal of doubling U.S. exports to $3.14 trillion by the end of 2014, up from $1.57 trillion in 2009. The Ex-Im charter would have expired at the end of May without congressional action.
During Wednesday’s signing ceremony, Mr. Obama cited the bank’s reauthorization as an example of the type of bipartisan compromise Washington can accomplish to bolster the economy even in a highly charged election year.
“I hope this ends up being a model of the kind of work we can get done,” he said.
Continuing to push an economic “to-do list” on Congress, Mr. Obama used the occasion to call for several pet initiatives, including eliminating tax breaks for companies who move operations and jobs overseas, making it easier for more Americans to refinance their homes, extending tax breaks for clean energy companies, and creating a returning veterans jobs corps.
“We’ve got to treat our heroes with the respect and dignity they’ve earned,” he said. “These are Americans who want to keep serving now that they’re back. [EnLeader] We need to ensure they come home to a job and security.”