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Obama's corporate welfare: No level playing field


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384151Washington Examiner:

President Obama went to a Boeing factory last week and promised to help the $56 billion corporation by giving it more taxpayer subsidies.

Obama called on Congress to reauthorize and expand the government agency that most embodies corporate welfare -- the Export-Import Bank of the United States. The Boeing factory in Washington state was a fitting location, given that most of Ex-Im's finance dollars -- 66 percent of its guarantees last year -- subsidize Boeing sales.

Because foreign governments give "unfair subsidies" to their manufacturers, Obama argued, Uncle Sam needs to raise its subsidies in order to create a "level playing field."

Even if increasing the power of bureaucrats and politicians to dole out taxpayer-backed subsidies to selected U.S. manufacturers somehow levels the playing field globally, it definitely rigs the game domestically, favoring politically connected companies and industries while hurting others.

The latest Ex-Im victim is taking the agency to court. U.S.-based airlines, through their lobby, the Air Transport Association of America, have sued Ex-Im over its $3 billion in loan guarantees to Air India.

Air India used these U.S. taxpayer subsidies to buy Boeing jets for less than it would have paid in a free market. This, the U.S. airlines lobby argues, gave Air India a competitive advantage over Delta, which was flying U.S.-to-Mumbai flights just like Air India. Last month, Delta canceled its service to Mumbai, surrendering to its foreign competitor.

The airline lobby argues that Ex-Im skipped its legally required study of the economic effect of its Air India subsidies.Scissors-32x32.png

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