U.S. manufacturers say they’re starting to feel the pain from Congress’ decision to let the federal Export-Import Bank’s charter lapse in June, and are planning to mount a push to revive the obscure, controversial agency when lawmakers return next week.
The bank, a product of the New Deal that finances the sale of U.S. exports to international buyers, hasn’t been able to extend new lines of credit since the end of June, after House Republican leaders rejected efforts to keep it afloat.
Conservatives in Congress say Ex-Im, as the bank is known, is spending billions in “corporate welfare” to prop up corporations that don’t need the help.
Yet as lawmakers decamped for their August break, the complaints started to roll in. Boeing Co. said an international buyer who canceled a satellite purchase blamed Ex-Im’s slated demise, and the aerospace manufacturing giant said the bank’s lapse is one of several factors that will force it to lay off employees before the end of this year.
Company officials said “due to congressional inaction on Ex-Im reauthorization, Boeing is operating at a significant disadvantage in overseas campaigns against foreign aerospace companies that are supported by their governments’ official export credit agencies.”
Bassetts Ice Cream of Philadelphia, a smaller Ex-Im customer, said it will struggle to finance international sales, while Clink Bond Inc., a fastening hardware company, said it will feel the effects of the bank’s breakup “downstream” as it feeds its parts to companies that rely on the bank, even though it doesn’t contract with Ex-Im itself.
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“They’ve moved from disbelief to starting to feel a lot of pain,” Linda Dempsey, vice president for international economic affairs at the National Association of Manufacturers, said of Ex-Im’s customers.
Established in 1934, the bank steps in to finance exports when private lenders are unwilling to extend credit. Its supporters say the bank helps U.S. goods compete in overseas markets, as foreign governments prop up their companies with similar credit agencies.
But conservative groups sharpened their attacks on Ex-Im after President Obama’s re-election in 2012, saying they should target reauthorization bills to phase out government programs they view as wasteful or unnecessary.
Conservatives say the bank’s importance in the economy has been oversold, and point to the fact that the sky hasn’t fallen since the June 30 lapse is proof the bank’s customers can get by without it.
“It is surprising that Boeing is choosing to pursue layoffs when it is reporting increased sales, record-breaking revenue and a backlog of orders that will take seven years to clear,” said Rep. Jeb Hensarling, chairman of the House Financial Services Committee and a key opponent of the bank.
“While there’s no doubt some U.S. companies receive a benefit from Ex-Im, there’s also no doubt Ex-Im hurts other American companies and their workers,” Mr. Hensarling, Texas Republican, said of the standoff over the bank. “Where is the fairness in giving Washington politicians the power to pick who gets helped and who gets hurt?”
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Proponents of the bank said it has majority support in both chambers, and want to see Congress revive it as part of a jam-packed September agenda that includes a vote on the Iran nuclear deal and talks to avert a government shutdown.
“Unfortunately, Ex-Im is being held hostage by an extreme partisan minority,” said Sen. Sherrod Brown, Ohio Democrat and leading champion of the bank. “Congress should continue its bipartisan tradition of reauthorizing Ex-Im now and avoid another self-inflicted economic wound that will threaten jobs and tilt the playing field against U.S. workers, exporters, and manufacturers.”
There’s no clear path forward, however. House Majority Leader Kevin McCarthy, California Republican, opposes the bank and has been content to let it unwind its current business.
Sen. Mark Kirk, Illinois Republican, successfully attached the bank to a multiyear highway bill the Senate passed before recess, but that legislation faces an uncertain fate in the House, which is forging its own approach to financing road projects.
A Kirk aide said Friday the senator would support attaching the bank to any other bill it sends to the House, and U.S. manufacturers are searching for cracks of legislative daylight.
“There’s a lot of different ideas on how to move forward. There’s a lot of challenges as well,” Ms. Dempsey said. “We’re looking at all potential legislative vehicles to move this forward as soon as possible.”
But House Speaker John A. Boehner has agreed to let Mr. Hensarling offer amendments to try to strip out the bank provision if the Senate adds it to any other bills.
Amid the standoff, the bank itself said Friday it hasn’t resorted to layoffs and will continue to manage its $107 billion in outstanding loans and guarantee commitments.
“We have heard from many of you about the detrimental impact this has had on your business and your workers,” Ex-Im Chairman and President Fred P. Hochberg said in a mid-August letter to bank customers. “On behalf of everyone here at EXIM Bank, I want to express our hope and determination that current efforts to reauthorize EXIM Bank will succeed once Congress returns in September.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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