With Congress back in session for less than four weeks before the August recess, business organizations are ramping up efforts to sway policymakers about the U.S. Export-Import Bank’s value ahead of its upcoming expiration. Reauthorization generally gleans support from across the political spectrum, though the debate is becoming increasingly politicized, with conservatives pitted against government intervention in the flow of global trade.
“We are facing a time crunch in terms of legislative days before September 30, when Ex-Im expires. We are really turning up the heat on the Hill – obviously it’s really hot in Washington right now and we’re going to turn it up even higher in terms of our discussions with members,” says Christopher Wenk, senior director of international policy at the U.S. Chamber of Commerce. “It’d be irresponsible, in our opinion, to let a proven program that creates and sustains jobs go by the wayside. That’d be ridiculous, especially in an election year.”
The chamber joins groups like the National Association of Manufacturers in support of the bank, which provides financing and insuring to foreign buyers of U.S.-made goods. In the next few weeks, supporters will distribute cards to each member of the House of Representatives and Senate listing Ex-Im corporate beneficiaries in their districts, as well as how the bank supports local jobs. Opponents of the bank, such as the conservative group Heritage Action for America - political arm of the Heritage Foundation - also say they’ll continue to communicate their opposition to members of Congress in July and throughout the August recess.
Though it facilitates less than 2 percent of total annual exports, the bank last year supported $37 million in exports and more than 200,000 jobs at 3,400 companies, 90 percent of which were small- and mid-sized businesses, according to the chamber. Nearly 60 other major trading partners, including China, have similar export credit agencies, so those favoring the bank argue it helps to level the competitive playing field.
But groups that want to let the bank’s charter to expire say Ex-Im is little more than corporate welfare that provides handouts to big companies like Boeing and General Electric under the guise of support for small businesses who couldn’t otherwise secure export financing. The bulk of Ex-Im’s financing in dollar terms does go to big corporations who sell expensive items like airplanes. For example, in 2013, the bank helped Boeing sell $8.3 billion in airplanes overseas, Bloomberg reports.
While bank supporters generally don’t see it as a political issue, Dan Holler, communications director for Heritage Action for America, said it could be the “major issue for the conservative movement this year.” Conservative opposition got new momentum with incoming House Majority Leader Rep. Kevin McCarthy’s recently announced opposition as well.
“There’s a huge opportunity for the Republican Party to reposition itself as being against cronyism, against corporate welfare and fighting for the folks on main street as opposed to Wall Street,” Holler says. “Ironically it’s the Democrats now who are going out there and fighting for the big business Chamber of Commerce agenda.
Holler says the debate has become higher profile since its 2012 reauthorization as groups like Heritage and the Club for Growth have worked to gather support for the charter’s expiration.
“2012 was important because it was the first time since I think Nixon that you had 90-plus no-votes against the bank,” he says. “In 2012 our goal was to make it a debate and really begin the education process with an eye on 2014 [as] when we could actually end the bank.”
So far, the bank’s latest reauthorization has drawn support from both sides of the political aisle, from Gov. Rick Perry, a Texas Republican, to the Obama administration.
“We think it’s kind of silly this has become a controversial issue,” Wenk says. “People just don’t understand why a program with a long proven track record for success is controversial.”
Similarly, economist and former Treasury Secretary Larry Summers argued in a recent Financial Times editorial that eliminating the Ex-Im Bank, which, “at no cost to the government, enables US exporters to compete on a more level playing field with those of competitor nations,” would be the equivalent to “unilateral disarmament.”
Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, wrote in a blog post that a phase-out of the bank would be preferable to an all-out withdrawal, “especially at a time when we very much need the labor demand generated by exports.”
In 2013, exports to the top 15 U.S. export markets supported more than 2.5 million jobs, or 64.5 percent of all export-supported jobs, a Commerce Department
report Monday showed.