Ex-Im Bank debate could affect rural manufacturers
June 23, 2014 | 06:36 PM
Incoming House Majority Leader Kevin McCarthy, R-Calif., on Sunday called for the expiration of the Export-Import Bank, but today the U.S. Chamber of Commerce and the National Association of Manufacturers sent members of Congress a letter calling for the bank’s reauthorization. The letter was signed by some of the biggest companies in the country and some of the smallest rural companies that also benefit from the bank’s programs to finance exports.
The Ex-Im Bank, which has existed since the 1930s, does not have much direct involvement with agriculture, but it finances a lot of sales by John Deere, Caterpillar and small companies making farm and irrigation equipment that is increasingly sold to developing countries with buyers that private sector bankers would not trust without the bank’s guarantees.
The bank’s authorization to make loans expires on September 30, and conservative Republicans including House Financial Services Chairman Jeb Hensarling, R-Texas, have called for the bank to go out of existence on the grounds that it is crony capitalism and that private lending institutions can do its job.
Defenders of the bank have said that other countries have institutions that help their companies gain markets in risky situations, and that U.S. companies will not be able to compete with German, Chinese, Italian and other companies that use them.
Kevin McCarthy, R-Calif.
On Fox News Sunday, McCarthy said, “One of the problems with government is they take hard earned money so others do things that the private sector can do. The last authorization of the bank directed the Treasury secretary to wind down the Ex-Im Bank [and] negotiate with other countries to wind them down so we have a level playing field.”
“We have hearings going on next week in Financial Services, which I sit on,” McCarthy said. “I think Ex-Im Bank is one that government does not have to be involved in. The private sector can do it.”
The transcript of the interview was distributed by the Heritage Foundation, which says the bank’s charter should expire.
But today the Chamber and NAM announced that more than 200,000 people work for 3,400 companies that use the bank’s programs, and that they have formed a coalition to urge Congress to reauthorize the Ex-Im Bank.
The letter was signed by some 800 companies, including many in small states and the rural areas of large states. The National Council of Farmer Cooperatives also signed the letter.
“Failure to reauthorize Ex-Im would amount to unilateral disarmament in the face of other governments’ far more aggressive export credit programs, which have provided their own exporters with an estimated $1 trillion in financing support in recent years,” the companies said in the letter.
“Export credit agencies in China, France, Germany, Brazil, and Korea have provided significantly more support for their exporters than Ex-Im has provided to U.S. exporters — in some cases, more than seven times what Ex-Im Bank has provided on an annual basis.”
The NAM and the Chamber say they have organized more than 350 meetings on Capitol Hill on the issue and created a website with small business success stories, myths and facts about the Ex-Im Bank, as well as a call to action for businesses to show their support, the two groups said in a joint news release.
On Friday another group, the Coalition for Employment through Exports Inc., held a news conference to rally support for the bank.
“The McCarthy statement on Fox News Sunday is certainly disappointing and absolutely wrong,” John Hardy, the CEO of that group, said in an email today.
“The private banks will not step in to fill the financing gap created by an Ex-Im if it is shut down,” Hardy said.
“Instead, exports will be lost and thousands of small business, mid-market company jobs will be in jeopardy, as will jobs from suppliers to the exporters. We remain optimistic that as Republican House leadership better understands the catastrophic consequences of a shutdown of the Bank they will change their position ands support an immediate reauthorization.”
In addition, 41 House Republicans sent the House leadership a letter saying that they support reauthorization of the bank.
The Republicans who support the bill led by Chris Collins of New York and Charles Boustany of Louisiana noted that the House will have an opportunity to review the bank during the reauthorization process.
▪ Export-Import Bank of the United States
▪ Fox News Sunday — Kevin McCarthy talks Iraq, future of the GOP; latest on IRS scandal
▪ Chamber of Commerce /National Association of Manufacturers Letter to Congress
▪ Ex-Im Coalition
▪ Coalition for Employment Through Exports, Inc.
▪ House Republican letter of support
▪ Heritage Foundation — Export-Import Bank: Cronyism Threatens American Jobs
The Ex-Im Bank, which has existed since the 1930s, does not have much direct involvement with agriculture, but it finances a lot of sales by John Deere, Caterpillar and small companies making farm and irrigation equipment that is increasingly sold to developing countries with buyers that private sector bankers would not trust without the bank’s guarantees.
The bank’s authorization to make loans expires on September 30, and conservative Republicans including House Financial Services Chairman Jeb Hensarling, R-Texas, have called for the bank to go out of existence on the grounds that it is crony capitalism and that private lending institutions can do its job.
Defenders of the bank have said that other countries have institutions that help their companies gain markets in risky situations, and that U.S. companies will not be able to compete with German, Chinese, Italian and other companies that use them.
On Fox News Sunday, McCarthy said, “One of the problems with government is they take hard earned money so others do things that the private sector can do. The last authorization of the bank directed the Treasury secretary to wind down the Ex-Im Bank [and] negotiate with other countries to wind them down so we have a level playing field.”
“We have hearings going on next week in Financial Services, which I sit on,” McCarthy said. “I think Ex-Im Bank is one that government does not have to be involved in. The private sector can do it.”
The transcript of the interview was distributed by the Heritage Foundation, which says the bank’s charter should expire.
But today the Chamber and NAM announced that more than 200,000 people work for 3,400 companies that use the bank’s programs, and that they have formed a coalition to urge Congress to reauthorize the Ex-Im Bank.
The letter was signed by some 800 companies, including many in small states and the rural areas of large states. The National Council of Farmer Cooperatives also signed the letter.
“Failure to reauthorize Ex-Im would amount to unilateral disarmament in the face of other governments’ far more aggressive export credit programs, which have provided their own exporters with an estimated $1 trillion in financing support in recent years,” the companies said in the letter.
“Export credit agencies in China, France, Germany, Brazil, and Korea have provided significantly more support for their exporters than Ex-Im has provided to U.S. exporters — in some cases, more than seven times what Ex-Im Bank has provided on an annual basis.”
The NAM and the Chamber say they have organized more than 350 meetings on Capitol Hill on the issue and created a website with small business success stories, myths and facts about the Ex-Im Bank, as well as a call to action for businesses to show their support, the two groups said in a joint news release.
On Friday another group, the Coalition for Employment through Exports Inc., held a news conference to rally support for the bank.
“The McCarthy statement on Fox News Sunday is certainly disappointing and absolutely wrong,” John Hardy, the CEO of that group, said in an email today.
“The private banks will not step in to fill the financing gap created by an Ex-Im if it is shut down,” Hardy said.
“Instead, exports will be lost and thousands of small business, mid-market company jobs will be in jeopardy, as will jobs from suppliers to the exporters. We remain optimistic that as Republican House leadership better understands the catastrophic consequences of a shutdown of the Bank they will change their position ands support an immediate reauthorization.”
In addition, 41 House Republicans sent the House leadership a letter saying that they support reauthorization of the bank.
The Republicans who support the bill led by Chris Collins of New York and Charles Boustany of Louisiana noted that the House will have an opportunity to review the bank during the reauthorization process.
▪ Export-Import Bank of the United States
▪ Fox News Sunday — Kevin McCarthy talks Iraq, future of the GOP; latest on IRS scandal
▪ Chamber of Commerce /National Association of Manufacturers Letter to Congress
▪ Ex-Im Coalition
▪ Coalition for Employment Through Exports, Inc.
▪ House Republican letter of support
▪ Heritage Foundation — Export-Import Bank: Cronyism Threatens American Jobs
