Issue link: https://jocdigital.uberflip.com/i/340697
GOVERNMENT WATCH INTERNATIONAL | WASHINGTON | CUSTOMS | SECURITY | REGULATION 16 THE JOURNAL OF COMMERCE www.joc.com JULY 7.2014 By Mark Szakonyi THE FUTURE OF the Export-Import Bank of the U.S. is in doubt, threatening U.S. manufacturers with the loss of a powerful resource that helps them remain competi- tive globally. Many House Republicans are signaling they won't renew the independent federal agency's charter when it expires at the end of September. The Ex-Im Bank approved more than $27 billion in loans in fiscal 2013, supporting about $37.4 billion in exported goods and services. It's not clear just how much freight movement the bank supports but it's sizable, considering Caterpillar is one of its largest beneficiaries. Foreign buyers of Caterpillar's earth-moving equipment received nearly $2 billion in financing from the bank over the last five years, according to Crain's Chi- cago Business. President Obama wants to give the bank a five-year renewal and scale up its lending cap from $140 billion to $160 billion to further support the administration's export goals. Many House Republicans, however, want to let the bank sunset. They point to the bank as an example of "crony capitalism," in that some U.S. exporters, such as Boeing and GE, gain advantages at the expense of other domestic companies. Delta Air Lines, for example, has said the bank allows foreign rivals to buy Boeing airplanes more cheaply than they would if American taxpayers didn't prop up the bank. The Ex-Im Bank's proponents counter that nearly 90 percent of the 3,400 com- panies that depend on the institution for loan guarantees are small and midsize, and they would see their global competitive edge slip if financing dries up. In addition to supporting some 205,000 jobs, the bank is perceived as a good deal for taxpayers, having returned $1 billion to the Treasury last year. Detractors, however, doubt the account- ing for that figure and say the 80-year-old bank still provides subsidies to U.S. busi- nesses. The reported suspension or firing of four bank officials amid investigations into gifts and kickbacks underscores the bank's too-cozy relationship with big business, opponents say. The warning signs for the bank have been building for months, but it wasn't until new House Majority Leader Kevin McCarthy in June dismissed giving the bank an extension that the alarm bells began to ring. The bank isn't something the federal government needs to be involved with, and it soaks up taxpay- ers' dollars when financing could be left to the private sector, McCarthy, R-Calif., said in a June 22 interview on Fox News. "One of the biggest problems with gov- ernment is they go and take hard-earned money so others do things that the private sector can do. That's what the Ex-Im Bank does," said McCarthy, who voted for the bank's reauthorization in 2012. The fight over the future of the bank reflects how traditional battle lines in Wash- ington have been redrawn, pitting the U.S. Chamber of Commerce and the National Association of Manufacturers against some of the same Republicans who have sup- ported the groups' goals in the past. "To simply close the bank would be an incredible gift from Congress to our com- petitors," NAM President and CEO Jay Timmons said in a late June media confer- ence call. That the American Federation of Labor EX-IM BANK ON THE ROPES House Republicans signal it may be time to pull the plug on a key finance facility for importers and exporters