The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Boeing Bogusness is Business as Usual

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


Today, Citizens Against Government Waste expressed outrage over the revelation that laid-off Boeing workers in the state of Washington will qualify for federal Trade Adjustment Assistance (TAA), an unemployment benefits program that far exceeds the benefits normally handed out to unemployed workers.

According to an August 1 story in the Seattle Times, the Department of Labor recently ruled that Boeing’s decision to outsource parts of its production and engineering departments qualifies its laid-off American workers for TAA, rather than unemployment, simply because Boeing has moved parts of its production process abroad, and not to another location within the United States.  Had Boeing chosen to move its engineering facilities to Moscow, Iowa, rather than Moscow, Russia (as it did instead), its workers would only be eligible for the unemployment checks given to all other displaced workers.  Instead, under TAA, Boeing’s former employees will receive benefits including unemployment payments for up to 2.5 years, rather than the normal six months, and up to 90 percent reimbursement for travel and relocation costs associated with searching for and ultimately moving to the location of a new position.

TAA’s primary aim (reimbursing and reeducating laid-off workers) may sound laudable, but its existence is entirely unjustifiable. There is no reason to treat unemployed workers who lost their jobs as a result of international trade as though they are more deserving of assistance than workers who lose their jobs due to domestic competition.  Of course, there is no reason to treat Boeing differently from other manufacturing firms, but that has not stopped the federal government from consistently doing so.

Indeed, the Labor Department’s ruling further cements Boeing as perhaps the federal government’s greatest ally in cronyism.  As CAGW has pointed out before, the Export-Import Bank of the United States (Ex-Im Bank) has come to be known as “Boeing’s Bank,” because in many years the majority of Ex-Im Bank’s guarantees and loans have gone to Boeing.  In 2010, Boeing reported profits of $3.31 billion but received 65 percent of Ex-Im Bank’s $15.3 billion in loan guarantees.  In 2009, when profits were a measly $1.31 billion, Boeing received $8.4 of the $9.3 billion in loan guarantees.  When President Obama announced that he would push for reauthorization of Ex-Im Bank in February 2012, he did so at Boeing’s headquarters.

The DOL’s ruling on Boeing workers sends the message that ordinary Americans not paying union dues are less qualified for government largesse than their organized counterparts.  It also does nothing to dispel the notion that Boeing itself operates on a separate playing field.  In a presidential administration that is apparently obsessed with equality, it would be nice to see some in its dealings with private enterprise.

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