As Export-Import Bank charter expires, backers warn of economic damage

30 Jun 2015 | Author: | No comments yet »

As Export-Import Bank charter expires, backers warn of economic damage.

WASHINGTON • Supporters of the Export-Import Bank, including St. Tomorrow will be the first day since 1934 that an obscure federal agency will no longer be able to risk Americans’ tax dollars to subsidize big business.

Business groups and Democrats, who strongly back the bank, organized news conferences and calls with journalists to try to increase the pressure on House Republican leaders to allow a reauthorization vote. The White House said he scheduled a conference call Tuesday with elected officials, business owners, and labor leaders to discuss the importance of reauthorizing the bank, which provides loans to foreign buyers of U.S. goods and other assistance to support exports. “We are facing the cold reality of the Ex-Im bank authorization expiring,” said Aric Newhouse, Senior Vice President for Policy and Government Relations at the National Assn. of Manufacturers.

Minnesota Public Radio News ( ) says that since 2007 the bank has supported more than 200 Minnesota businesses, including 3M, and helped create $3 billion in state exports. A cadre of conservative Republicans in the House led the opposition, labeling the bank corporate welfare and “crony capitalism,” in the words of House Ways and Means Committee Chairman Paul Ryan, R-Wis. The Ex-Im expiration is finally a bit good news for American families and small businesses who since the days of the Great Depression have had their tax dollars spent on political favoritism and corruption.

And it’s gotta go away.” But for Washington institutions, death can be just a first step toward rebirth: Democrats, along with a handful of GOP lawmakers, are already laying the groundwork to resurrect the bank, as soon as the end of July. Bridge, a Cambridge, Ohio, manufacturer, said a nearly $100-million sale to Ghana is in jeopardy without Export-Import Bank assistance. “We have already received a very disturbing message … that one of our competitors from China has informed our customer that they cannot secure financing for our bridges and therefore they should consider another source,” said Rogovin, whose company has about 150 employees. “Ex-Im Bank was going to guarantee a long-term loan to Ghana,” he said. “There is no U.S. domestic commercial bank that will perform the same service.” The bank, similar to export-assistance agencies in about 60 other countries, provided $20.5 billion in aid last year that that financed $27.5 billion worth of U.S. exports. Blatant examples such as bank employees taking kickbacks for loans or former Congressman William Jefferson found with $90,000 of cash found in his freezer along with other questionable activities finally became too much for ever Washington to sell to the American people. Despite the culture of corruption at the bank, Ex-Im’s supporters have spent tens of millions of dollars in lobbying activity since the beginning of the year to convince Congress to extend their handout.

Over the past several years, Ex-Im has emerged from relative anonymity to become a top target for conservative Republicans, who say the bank’s loan guarantees for U.S. exporters amount to corporate welfare. And they say the bank amounts to “crony capitalism” and the government picking winners and losers. “Where is the fairness in giving Washington politicians and bureaucrats the power to pick who gets helped and who gets hurt?” asked GOP Rep. Kirk says the bank is necessary to provide U.S. companies an equal playing field in competition with heavily subsidized competitors, including Chinese aircraft producers squaring off with Boeing.

But many conservative Republicans complain that the bank mostly helps large corporations, such as Boeing Co., putting taxpayers at risk for any losses the bank can’t cover on about $112 billion in outstanding assistance. “This is a small step toward renewing a competitive free-market economy and arresting the rise of the progressive welfare state and the cronyism connected to it,” said House Financial Services Committee Chairman Jeb Hensarling (R-Texas), a leading bank opponent. Proponents have predictably turned to “the sky is falling!” claim in an effort to frighten lawmakers to attach bank reauthorization to “must pass” piece of legislation.

The seller wants to know that you have financing and can close the deal — so typically you come with a letter from a bank that says you can get a mortgage. Meanwhile, House Speaker John Boehner (R-Ohio) hasn’t stopped his two top deputies from plotting to eliminate the agency, as the right has made the issue a reliable litmus test for presidential hopefuls and congressional candidates. Despite the conservative excitement, Democrats are about to cash in on a promise from Senate Majority Leader Mitch McConnell (R-Ky.) that the chamber will vote on renewing the bank this summer. Government backing can be needed because of the huge amounts of money involved in big purchases such as aircraft, or to help U.S. companies protect against the risk of default from a little-known buyer in a foreign country.

Transportation funding runs dry on July 31 and Republicans are loath to miss that deadline in the middle of the summer construction season, particularly after they blew a deadline earlier this spring and allowed key provisions of the PATRIOT Act to lapse for two days. Export-Import Chairman Fred Hochberg and other supporters say killing the bank will cost American jobs and make American companies less competitive internationally. At a recent Christian Science Monitor breakfast, he said that just the threat of Export-Import’s charter expiring is already hurting small businesses like Ellicott Dredges that depend on it for credit insurance for overseas sales. The bank’s expiration is an opportunity for private financiers to fill in for the remaining 2 percent of exporters that have been receiving Ex-Im financing.

Hochberg laid out a dire scenario if the bank stops lending: “You will see layoffs, you will see lost business — and we are already seeing foreign governments and foreign companies start taking advantage of the uncertainty.” But recently, the obscure agency has become something of a conservative purity test, with tea party-backed lawmakers and groups attacking it and rallying fellow Republicans to defy the business community and turn against it.

Despite the undeniable fact that the sky will not fall with the banks expiration, many in Congress are already plotting to resurrect Ex-Im in a backroom deal. David McKinley (R-W.Va.) said he wants to modify the bank so that it isn’t used as often for large corporations’ benefit and it backs off its “ideological warfare” on his state’s coal industry. Rather than relying on failed New Deal policies America should look to eliminate costly mandates and red tape to encourage job growth and help raise wages of hardworking Americans. Critical House Republicans are likely push for short-term extensions of the bank’s charter rather than the four-year timeline preferred by Ex-Im backers in the Senate and to shrink its economic blueprint.

Knowing that, bank proponents pushed so hard and vocally for a vote on Ex-Im before its expiration — but they stopped short of attaching it to a recently passed fast-track trade bill, which could have killed the fragile coalition that sent the trade package to President Barack Obama’s desk for his signature on Monday. Dick Durbin, the second-ranking Senate Democrat, was recently pessimistic on the chances of reviving the bank, noting that the task gets “increasingly difficult” once the charter has expired. But that vote has caused tension between McConnell and Democrats like Cantwell, who has suggested that was not what she had in mind when she voted to advance the trade legislation over a liberal-led filibuster. Heidi Heitkamp (D-N.D.) and Majority Whip John Cornyn (R-Texas) had an animated discussion during the Senate’s second trade vote last week, with Heitkamp arguing that the Ex-Im clearly has the votes to pass the Senate. “We know that there were commitments made, or understandings, that weren’t necessarily carried through on,” Heitkamp fumed late last week as GOP leaders pointed to that nonbinding vote. “I don’t know how anyone can look at that and say that was a fulfillment of a commitment.” “Sen.

But a temporary death of the agency is not the victory that conservatives have been seeking, said Dan Holler, a spokesman for Heritage Action for America, an organization that is urging Boehner and McConnell to permanently wind down the bank by fending off a vote from the floor of either chamber. Heritage Action and the Club say the only way Republicans can shrink government is to let the bank expire altogether — and the wind is at the GOP’s back if they choose to do so. “Everything that proponents of the bank say is harder than they say … they are trying to make it sound like a foregone conclusion that it will be on this highway bill,” Holler said. “Literally, all the Republican leadership in both the House and the Senate has to do is clock a win on this.”

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