Hardly anyone has noticed or seems to care. Speaking at a Boeing assembly plant in Everett, Washington Friday, President Barack Obama announced a bold new plan to help American exporters: he would broaden the services of the Ex-Im Bank to help grow our exports.
Now, that sounds good on the face of it. The Ex-Im Bank is chartered as an export-funding source with a very narrow, specific charter.
Click here for the background on the Ex-Im Bank and its real purpose.
To ensure that the Ex-Im Bank doesn’t step on the toes of private US banks, it operates under several constraints. It must not compete with other US lenders; if a private bank wants to make the loan, the Ex-Im Bank must step aside. It must not provide this taxpayer-supported service on foreign products; since the whole point is to support US manufacturers, it sets minimum percentage requirements for US content on the goods being sold. And since its whole point is to support exports, it can only make loans attached to export shipments, not just any old loan for any old US company. It’s not there to compete with the private sector!
President Obama’s announcement on Friday throws out the Ex-Im Bank charter and completely redefines what it is and what it can do. All, of course, without legislative input.