Critics of the U.S. Export-Import Bank “want to unilaterally disarm” American companies from competing in the global marketplace while countries including China support their industries, the lender’s chairman said.
Congress should renew the bank’s charter for four years and increase its lending authority to $140 billion from $100 billion to keep U.S. exporters competitive, Fred Hochberg, the Ex-Im bank’s chairman and president, said at a conference today in Washington.
“Other countries will happily step in if we can’t or won’t finance a deal,” he said.
The 78-year-old bank is using the conference to press for a renewal of its charter, which is set to expire May 31 and has drawn opposition. Among those scheduled to speak at the event are former President Bill Clinton, Chicago Mayor Rahm Emanuel and United Parcel Service Inc. (UPS) Chief Executive Officer Scott Davis.
Critics of the bank, including the Club for Growth, which supports smaller government, say the lender meddles in private enterprise. Supporters of reauthorization include the National Association of Manufacturers and the U.S. Chamber of Commerce.
Senate Republicans defeated a bipartisan measure on March 20 to reauthorize the bank for four years and increase its lending limit to $140 billion as part of a bill rolling back Securities and Exchange Commission rules.
Some U.S. airlines including Delta Air Lines Inc. (DAL) of Atlanta and US Airways Group Inc. (LCC) of Tempe, Arizona, in November sued the bank through a trade association, alleging that the lender “routinely fails to evaluate the negative impact that its commitments have on domestic industries and domestic employment.” The case is pending in the U.S. District Court for the District of Columbia.
The bank performs an economic-impact review of each of its transactions, which include loan guarantees, insurance and direct lending, Hochberg said in an interview April 4.
Boeing Co. (BA), the world’s biggest aerospace company, is one of the bank’s main beneficiaries and a leading advocate for its reauthorization. Senator Jim DeMint, a South Carolina Republican and founder of the Senate Tea Party caucus, has said the bank gives foreign airlines an edge over American carriers, such as Delta, in buying new aircraft.
Unless Congress acts, “all new activity will grind to a halt,” Hochberg said. American companies “will find themselves at a huge disadvantage” while China and other governments use export finance to create jobs in their countries, he said.
Congress intends to take up the issue again when it returns from a two-week recess April 16.
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