Business Vows Not to Be Caught Sleeping on Em-Im BankBrian Wingfield
Big business was blindsided by the Tea Party two years ago and almost lost a fight to keep the U.S. Export-Import Bank alive.
Supporters are vowing not to let that happen this year, though they face many of the same opponents -- including a congressman who now runs the committee considering the matter.
The U.S. Chamber of Commerce, National Association of Manufacturers, Aerospace Industries Association and Nuclear Energy Institute are stepping up their lobbying to reauthorize the bank, which helps foreign companies buy U.S.-made goods. The charter for the lender, which backed $38 billion in exports last year, expires Sept. 30.
“We’re going to be doing our damnedest to focus some minds” on Capitol Hill, Christopher Wenk, senior director for international policy at the U.S. Chamber, said in a phone interview. “We’re not going to let misinformation win the day this time around.”
The push coincides with the Export-Import Bank’s two-day annual conference, which begins tomorrow in Washington. It also sets the stage for what will probably be months of debate with ideological opponents, who deride the 80-year-old lender as an example of corporate welfare, and critics, including Delta Air Lines Inc., who say the bank’s practices benefit their foreign competitors.
The Export-Import Bank provides loan guarantees, insurance and loans to foreign entities, often in developing countries where private financing is either inadequate or unavailable. It frequently operates in sectors including transportation, energy, mining and communications, where the cost of doing business is high.
“It’s nothing more than a slush fund for crony capitalism,” Barney Keller, a spokesman for the Club for Growth, a Washington-based group that advocates for limited government, said in an interview. “We’re happy to work with anybody who wants to shut down the bank.”
The group may gain an edge this time from House Financial Services Committee Chairman Jeb Hensarling, a Texas Republican and Ex-Im critic who has led the panel since January 2013. Any legislation to reauthorize the lender must go through his committee, and he wields the authority to stall the debate.
Hensarling, who is away on recess with the rest of the Congress until April 28, wasn’t available for an interview, according to committee spokesman David Popp. His office recently tweeted a link to an April 17 video, in which Hensarling described the bank as the “face of cronyism.”
Industry groups have been coordinating their efforts to counter such opposition, said Linda Dempsey, the National Association of Manufacturers’ vice president for international economic affairs.
“This is an all-hands-on-deck effort” from the business community, she said in an interview. Officials from the nuclear industry, who want to ensure that companies can supply the technology for reactors under construction in other nations, and the aerospace industry, which is seeking to expand sales of satellites, also have been meeting with the lawmakers in recent weeks to make their case.
The groups declined to say how much they’re spending on the lobbying efforts.
“We are going to be intensely increasing our congressional outreach in the coming weeks,” according to Wenk, who said the U.S. Chamber has held hundreds of meetings on Capitol Hill to discuss the issue since the 2012 debate. He said group plans to deploy “significant resources in terms of lobbying, in terms of communications” and will involve chambers of commerce outside Washington to advocate for the bank’s reauthorization.
The U.S. Chamber, the nation’s largest business group, spent $75 million on lobbying in 2013 -- almost double the amount of the next major spender, according to the Center for Responsive Politics, a campaign-finance watchdog group.
Bank opponents can overcome such well-financed opposition “on the foundation of our ideas,” according to the Club for Growth’s Keller. “The government shouldn’t be picking winners and losers in the free market.”
Other foes include FreedomWorks and Heritage Action for America, Washington-based groups that advocate for limited government and support politicians tied to the Tea Party movement.
The bank last year authorized a record 3,842 transactions valued at $27.3 billion, according to its annual report. Those authorizations supported $37.4 billion in U.S. exports, it said. While the number of transactions increased, the total value of authorizations fell about 24 percent from 2012.
About 70 percent of the 6,000 exporters aided in the past five years are small businesses, according to the bank website. The top beneficiaries were major manufacturers: Boeing Co., General Electric Co. and Caterpillar Inc.
“I find it inconceivable that these companies would be in need of the government dole,” Hensarling said during a June hearing of the panel’s monetary policy and trade subcommittee.
Critics say the lender’s efforts can actually undermine U.S. companies. In 2012, a group of U.S. airlines led by Atlanta-based Delta said bank financing of wide-body Boeing jets for carriers including Air India Ltd. and Dubai’s Emirates Airline threatened American companies’ business. That criticism hasn’t waned.
“There’s a place for the bank, but the bank needs to be reformed,” Delta Chief Executive Officer Richard Anderson said today on an earnings conference call. “It needs to be transparent, and it shouldn’t be providing financing in any instance where there’s a private-market alternative.”
Anderson said the carrier’s complaint with the bank deals only with the lender’s support for purchases of wide-body aircraft.
Delta sued the bank a year ago to stop more than $100 million worth of guarantees for carriers including Emirates, Etihad Airways and Korean Air Lines Co., saying the lender didn’t adequately analyze the effect on U.S. businesses. The U.S. carrier is backed by the Air Line Pilots Association union and Hawaiian Airlines Inc. The case is pending in federal court.
Export-Import Bank Chairman Fred Hochberg has often said the bank reviews every transaction to ensure U.S. businesses aren’t harmed, and that in recent years it has increased efforts to show how its efforts benefit U.S. exporters, including a more interactive website.
Hochberg said he’ll use this week’s conference to make the case for reauthorization. He said businesses need certainty about their financing options and that other nations stand ready to help their exporters win contracts for products including satellites and nuclear reactors.
“This is a brutally competitive world,” Hochberg said, noting that the bank competes against government-backed credit providers in nations including France, Russia and China. “We’re not going to let them steal the business from U.S. companies because of financing.”
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