Congress Leaves For Recess Without Reauthorizing Export-Import Bank
An agency of the federal government will have to stop doing business today. That's because members of Congress went home last week for the July Fourth recess without reauthorizing the Export-Import Bank.
The bank helps American companies sell their goods overseas. The bank's critics say they're stopping corporate welfare.
For more than 100 years, Ellicott Dredges has been exporting dredging equipment made in the Baltimore area to more than a dozen foreign countries. Company President Peter Bowe says it's bad news that the Export-Import bank won't be making any more loans unless Congress steps in.
"I'm unhappy, our employees are unhappy and our customers are unhappy," he says.
The bank makes loans and loan guarantees for the foreign customers of American businesses. The bank's customers include giants such as Boeing and General Electric, as well as 1,700 smaller companies such as Ellicott Dredges.
Never heard of a loan guarantee before? Bowe says it's kind of like buying a house: "Customers look at us and they say, 'Well how will I be able to afford your equipment if it doesn't come with financing?' It's analogous if you go buy a house typically you're buying it from a seller. The seller wants to know that you have financing and can close the deal — so typically you come with a letter from a bank that says you can get a mortgage. So it's the same kind of thing."
While much of the business community and Democrats say it's critical to reauthorize the bank, conservative critics say the agency provides "corporate welfare" for big businesses.
Rep. Jeb Hensarling, R-Texas, is the bank's most vocal critic on Capitol Hill. At a recent hearing, he said the bank meddles with the free market.
"I do understand one person's corporate welfare and politically driven capital allocation is another person's vital export support program and level playing field," he said.
Bowe doesn't see it that way. "Our customers have choices; they can go buy from our foreign competitors who have similar agencies to the Export-Import Bank which finance even more than Export-Import does and on easier terms," he says.
Export-Import Chairman Fred Hochberg and other supporters say killing the bank will cost U.S. jobs and make American companies less competitive internationally.
At a recent Christian Science Monitor breakfast, he said that just the threat of Export-Import's charter expiring is already hurting small businesses like Ellicott Dredges that depend on it for credit insurance for overseas sales.
Hochberg laid out a dire scenario if the bank stops lending: "You will see layoffs, you will see lost business — and we are already seeing foreign governments and foreign companies start taking advantage of the uncertainty."
Supporters hope to revive the bank. Lawmakers plan to link its renewal to a highway bill Congress plans to take up next month.
9(MDE1MTIxMDg0MDE0MDQ3NTY3MzkzMzY1NA001))
Transcript
LINDA WERTHEIMER, HOST:
There's an agency in the federal government you may never have heard of, but a lot of American companies are fond of it. It's called the Export-Import Bank, and it helps companies sell goods abroad - at least it will until midnight. That's because the Congress went home for its July 4 recess without renewing the bank's charter. NPR's Juana Summers reports.
JUANA SUMMERS, BYLINE: For more than 100 years now, Ellicott Dredges has been exporting dredging equipment made in the Baltimore area to more than a dozen foreign countries. Peter Bowe is the company's president. He says it's bad news that the Export-Import Bank won't be making any more loans unless Congress steps in.
PETER BOWE: I'm unhappy, our employees are unhappy and our customers are unhappy.
SUMMERS: The bank makes loans and loan guarantees for the foreign customers of American businesses. The bank's customers include giants such as Boeing and General Electric, as well as 1,700 smaller companies, such as Ellicott Dredges. Never heard of a loan guarantee before - Bowe says it's kind of like buying a house.
BOWE: Customers look at us and they say, well, how will I be able to afford to buy your equipment if it doesn't come with financing? It's analogous if you go buy a house, typically you - you're buying it from a seller. The seller wants to know that you have financing and can close the deal, so typically you come with a letter from a bank that says you can get a mortgage - so it's the same kind of thing.
SUMMERS: While much of the business community and Democrats say it's critical to reauthorize the bank, conservative critics say the agency provides corporate welfare for big businesses. Texas Republican Congressman Jeb Hensarling is the bank's most vocal critic on Capitol Hill. At a recent hearing, he said the bank meddles with the free market.
(SOUNDBITE OF ARCHIVED RECORDING)
JEB HENSARLING: I do understand that one person's corporate welfare and politically-driven capital allocation is another person's vital export support program and level playing field.
SUMMERS: Peter Bowe of Ellicott Dredging doesn't see it that way.
BOWE: Our customers have choices. They can go buy from our foreign competitors who have similar agencies to Ex-Im Bank, which finance even more than Ex-Im Bank does and on easier terms.
SUMMERS: Ex-Im Chairman Fred Hochberg and other supporters say killing the bank will cost American jobs and make American companies less competitive internationally. At a recent Christian Science Monitor breakfast, he said that just the threat of Ex-Im's charter expiring is already hurting small businesses like Ellicott Dredges that depend on it for credit insurance for overseas sales. Hochberg laid out a dire scenario if the bank stops lending.
(SOUNDBITE OF ARCHIVED RECORDING)
FRED HOCHBERG: You will see layoffs. You will see lost business. And we were already seeing foreign governments and foreign companies taking advantage of the uncertainty.
SUMMERS: The bank's supporters hope to revive the bank. Lawmakers plan to link its renewal to a highway bill Congress plans to take up next month. Juana Summers, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
300x250 Ad
300x250 Ad