Typically, well-established corporate-welfare programs garner huge bipartisan majorities in Congress, easily winning reauthorization. But this year the Export-Import Bank, which mostly subsidizes Boeing sales, has hit a snag, actually losing a Senate vote.
In addition to firm conservative opposition, Ex-Im's troubles stem largely from a new powerful enemy this year: Delta Airlines. Delta, you see, suffers from Ex-Im subsidies that allow foreign airlines -- who are often competitors -- to buy Boeing jets at a discount thanks to taxpayer backing. Delta is suing over this subsidy, but the airline lobby has also hired consultants to pitch around town stories knocking Ex-Im.
Little things like principled belief in free enterprise rarely pose a threat to corporate welfare, but a pissed off airline lobby can always make some hay.
But guess who benefits from the latest Ex-Im subsidy? From Ex-Im's website:
The Export-Import Bank of the United States (Ex-Im Bank) today announced that the board of directors has approved a Final Commitment for an $84.8 million loan guarantee to VRG Linhas Aereas S.A. (GOL), a Brazilian airline. This financing will support the export of engine maintenance services by Delta TechOps, a subsidiary of Delta Air Lines, headquartered in Atlanta, Ga.
GOL engines will be shipped from São Paulo City to Atlanta for heavy maintenance to be performed by Delta Air Lines' maintenance, repair, and overhaul unit. In December 2010, GOL signed a contract with Delta Air Lines to perform heavy maintenance on GOL's CFM56-7B engines that are installed on the airline's Boeing 737 next generation aircraft fleet. As part of the contract, Delta TechOps will provide GOL with up to 253 scheduled engine removals and additional unscheduled removals. Ex-Im Bank's guarantee will cover the first two years of GOL’s five-year contract with Delta TechOps.
"Ex-Im Bank's financing will support high quality, high wage, technical jobs for Delta employees in Atlanta," said Fred P. Hochberg, chairman and president of Ex-Im Bank. "GOL is a long-time Ex-Im customer, and I'm pleased that they have chosen to have their engines repaired by highly-skilled American workers. This transaction truly highlights why Ex-Im financing is so critically important to U.S. businesses such as Delta."