Ex-Im Bank Can’t Back New US Exports as Charter Lapses
U.S. exporters won’t be able to obtain new financing for overseas deals from the U.S. Export-Import Bank as of July 1.
The situation may be temporary, though, as Congress, which left town prior to July 4 for recess without preventing the lapse in the bank’s charter, may consider reauthorizing Ex-Im later this month. The House and Senate won’t return until the week of July 6.
The 81-year-old institution provides financing arrangements that help U.S. companies such as trucking compete for overseas sales.
Senate Majority Leader Mitch McConnell (R-Ky.), who is opposed to reauthorizing the bank, has said he’ll allow its supporters to combine legislation to extend it with a highway funding bill expected to be considered in July.
Meanwhile, Ex-Im will continue work on existing agreements, though it can’t approve new loans, guarantees or insurance. Pending applications for Ex-Im financing total more than $9 billion, according to the bank.
Due to a lapse in our authorization is unable to take on new customers or new transactions. More here:
— Export-Import Bank (@EximBankUS)
Congress can reauthorize the bank and promote American businesses or “shut down the bank and put manufacturers on their back heels and put Americans out of work,” said Aric Newhouse, a senior vice president for the National Association of Manufacturers.
Sen. Marco Rubio, an Ex-Im opponent and Florida Republican who is seeking his party’s presidential nomination for the 2016 election, called the lapse a “major victory for the country.”
Rubio told reporters on a conference call June 30 that legislation to revive the bank should be considered “on its own merits” rather than being “tagged onto an unrelated bill,” such as the highway-funding measure.
The lapse is a “small step” toward ending “cronyism” in which some U.S. companies benefit from the federal government’s aid and others don’t, said U.S. Rep. Jeb Hensarling, a Texas Republican who is chairman of the House Financial Services Committee.
“There’s no doubt some U.S. companies receive a benefit from Ex-Im, but there’s also no doubt Ex-Im hurts other companies and their workers,” Hensarling said in a statement. “In fact, more are hurt than helped, and nearly 99% of all U.S. exports are financed without Ex-Im. Where is the fairness in giving Washington politicians and bureaucrats the power to pick who gets helped and who gets hurt?”
Ex-Im proponents are set to meet with President Obama on July 8 to plan how to push legislation to revive the institution.
Ex-Im, renewed without controversy for decades, has become a target of conservative Republicans who say it benefits only a few large corporations that don’t need government assistance.
Five public U.S. companies — General Electric, Boeing, Caterpillar Inc. and units of General Dynamics Corp. and United Technologies Corp. — had overseas customers who received about $10 billion in loan authorizations or long-term guarantees from the bank last year.