Who OEMs Want For President
NOTE: The below originally appeared as the editorial in our February 26 One Minute Week newsletter. To find out more, and sign up for free, please click here.
Last year was a tough year for the US Export-Import Bank. It was shut for new business after Republicans blocked its reauthorization. It was reopened in December and now has a mandate to September 2019. But it could face a less supportive president next time.
Opposition to Ex-Im Bank is one of the few things that nearly all Presidential hopefuls agree on.
Ex-Im loans have been used on business aircraft for many years, but the bank really stepped up its support from 2010. As well as helping with large business jets being exported to jurisdictions like Nigeria where it is harder to find finance, it also supported Textron Finance and created the Qualifying Adviser programme for smaller business aviation deals.
Reauthorization had never been a problem before but it became a target for the Tea Party. It sees it as “crony capitalism” and Ted Cruz, in particular, has been an extremely outspoken critic for several years. Last summer when it was seeking reauthorisation he vowed: “I am willing to use any and all procedural tools to stop this corporate welfare, this corruption from being propagated.”
The other leading Republican candidates share similar views. Marco Rubio also opposed its reauthorization (even though Florida, his home state, is the second biggest recipient).
Trump is less vehement but not a fan. “I don’t like it because I don’t think it’s necessary,” says Trump. “It’s sort of a featherbedding for politicians and others, and a few companies. And these are companies that can do very well without it. So I don’t like it. I think it’s a lot of excess baggage. I think it’s unnecessary.”
It is not just Republicans.
Bernie Sanders opposed its reauthorization in June 2015. He said: “Instead of providing low-interest loans to multi-national companies that are shipping jobs to China and other low-wage countries, we should be investing in small businesses and worker-owned enterprises that want to create jobs in the USA. If the Export-Import Bank cannot be reformed to become a vehicle for real job creation in the United States, it should be eliminated.”
The one exception is Hillary Clinton. She has supported it for many years and argued strongly for its reauthorisation. She could even make it bigger. In 2011, when she was Secretary of State, Mrs Clinton said: “I would like to put Ex-Im on steroids.”
Reauthorization may be almost four years away but it is worth watching. We are also only seven months from the start of the 2020 Presidential Campaign.