The Reagan administration's high minded rhetoric about demanding sacrifices of rich and poor alike has taken a tumble on the House floor with a stunning reversal of the president's budget cuts for the Export Import Bank.
In fact, the legislators and lobbyists who worked hardest to win more lending authority for the bank, and for the big corporations that use it the most, say it was really no contest. The White House didn't even put up a fight.
"We took a licking," acknowledged one administration official. "I believe our people were caught by surprise. I don't think the Republicans had the word loud and clear that this was bad."
The folks at Boeing, Genegal Electric and the International Association of Macninist, to mention just a few of the suites around town that plunged into the work, were delighted at the outcome. It involved an overnight switch of some 70 votes.
"We just made clear what this meant to us, and our suppliers in 44 states," said a Boeing spokesman. "We just laid this down in dollars and cents and in [an initial vote for the Reagan budget] got a fantastic reversal."
At stake were the final levels for the current 1981 fiscal year in the Ex-Im Bank's direct loan authority and in its loan guarantee authorizations.
Reagan proposed cutting back the burgeoning bank's direct loan level for the current year to $5.148 billion, a reduction of $752 million, as the first step in a professed effort "to reduce or eliminate federal subsidies to business."
And he called for a $1 billion cutback from the Carter administration's loan guarantee level for the bank this year, from $8.560 billion to $7.559 billion.
The president "believes that American business should be required to compete in the market, unfettered by unnecessary government restrictions, but unaided by special government privileges," the administration said in its outline of budget revisions last month. "In particular, he thinks it unfair that taxpayers should be forced to share the interest costs of private, profit-making -- and often larger -- corporations engaged in export enterprise."
The Office of Management and Budget headed by David A. Stockman has also hammered at the fact that most of the bank's direct loans, which carried an average interest rate last year of only 8 1/2 percent, support the exports of a handful of large firms.
In 1980, two-thirds of those loans went to seven companies: Boeing, General Electric, Westinghouse, McDonnell Douglas, Lockheed Western Electric and Combustion Engineering.
By the same token, the Ex-Im Bank has powerful friends on Capitol Hill. And some observers think Stockman doesn't have that many allies on the issue within the administration.
"Each $1 billion in exports creates 40,000 jobs," asserted Boeing board chairman T. A. Wilson in House testimony this year on behalf of his firm, the country's leading exporter. Of Boeing's export sales of $5 billion last year, he added, about $3 billion involved Ex-Im financing.
The first swipe at Reagan's formula came in March when the Senate Budget Committee whisked through a proposal by Sen. Nancy Landon Kassebaum (R-Kan.) to give the bank $250 million more in direct lending authority than the president wanted, and a total of $2.4 billion more over a four-year period.
If the White House cared, Senate aides say, there was little sign of it. The committee voted additional cuts in social programs to come up with the money.
The House Appropriations Committee proved even more generous to Ex-Im for fiscal 1981 when the final money bill of the year came onto the floor last Tuesday. The committee recommended $376 million more in direct loans than the administration had proposed and $500 million more in loan guarantees.
That was the way it was expected to go until Rep. David Obey (D-Wis.), an unlikely administration ally, grew angry over a surprise cut in funding for the International Development Association, an institution that makes most of its loans to impoverished countries with per capita incomes of less than $360 a year.
He offered an amendment to cut Ex-Im funding back down to Reagan's level.
"If we are going to be cutting funds . . . that affect very poor people both in this country and throughout the world," he protested,"" . . . there is no reason for us not to ask Boeing, GE and the other priveleged characters in our society to share the load."
To widespread surprise, reportedly even to Obey, the House agreed with him, or at least with the president, by a vote of 231 to 166.
"We just wanted to make a point," an aide to Obey said later. The Ex-Im funding "is the only place in the budget where there's a direct nick on corporations, the only place where they can say we're taking an equal bite out of subsidies for the rich and subsidies for the poor."
The turnaround came the next day.
Ex-Im's backers did a through job. Emergency strategy was laid out in the office of Rep. Norman D. Dicks (D-Wash.). Boeing's home-state delegation of five Democrats and two Republicans agreed to spread the word, stressing the trickledown benefits of Ex-Im loans on smaller companies throughout the country.
"Then we got the major companies together, and the Machinists Union," Dicks said. "And we were able to turn it around. I thought it was very important. We should be strengthening our export efforts, not cutting them back. . . The Machinists Union made a major effort with liberal Democrats."
By one account, a Wednesday morning session in Dicks' office flabbergasted some present with the lists, names and background material that had been cranked out overnight.
The afternoon of the first vote, I met some people from Boeing on the street," said one congressional aide. "They weren't at all sad. They thought it was an opportunity to prove their clout. And they did."
Ex-Im still has critics in Congress. A Congressional Budget Office study in March, for instance, concluded that "the United States as a whole must lose from the program" because of the shift of resources abroad and other inefficiencies.
By Wednesday, however, the mood of the House had changed. Rep. Tom Evans (R-Del.) led the calls for another vote. The action of the day before, he charged, "amounted to unilateral economic disarmament" when foreign countries were subsidizing their industries even more heavily.
The vote to undo the Obdy amendment and restore the Appropriations Committee's recommendations was 237 to 162.
Dicks said either Stockman or someone else at OMB informed Rep. Trent Lott (R-Miss.), who had called to inquire, that the administration did not want the additional funds, but there was no lobbying effort to bring the point home. The best Stockman could do, on Thursday, was to try to cut his losses with a letter to the Senate.
There, Sen. Robert Kasten (R-Wis.) had been fighting a losing battle with his Senate Appropriations subcommittee. Kasten wanted to give the Bank only $250 million more than Reagan's proposal, in short to settle for the first stage of the Kassebaum amendment.
But a majority of the subcommittee, it was clear, wanted to provide $376 million more, just as the House had done.
With the issue coming up before the full Appropriations Committee Thursday, Stockman sent a letter to Kasten voicing "strong support" for the lower amount that Kasten had proposed. With the assist, the full committee approved Kasten's figure by a vote of 14 to 10.
"The letter helped -- it helped Kasten save $126 million," said a committee staffer. "But there was no way in the world the committee was going to go along with the administration's [original] figure."