Exporters Worried Export-Import Bank’s Days Are Numbered
Republican critics of the Export-Import Bank will have even more influence next year, and some exporters are concerned that they will succeed in killing the bank.
In an op-ed for Al.com, Michael McSweeney claimed that Ex-Im “has played a key role in facilitating international sales” for his family business, which makes custom luxury cars.
McSweeney asserted that”about 40 percent of the jobs at our flagship company … are dependent on international sales,” while another of their ventures sells exclusively to overseas customers. “Without international trade, those jobs go away,” he warns.
McSweeney argued “Many of our competitors are based in countries that provide aggressive export credit financing to their businesses, meaning that if Ex-Im isn’t around, we can’t provide competitive financing on our exports.” (RELATED: Is the Export-Import Bank Done?)
Additionally, the Los Angeles Times reported on Friday that Air Tractor Inc., a Texas manufacturer of agricultural and firefighting airplanes, is concerned about the fate of several foreign contracts, which are worth millions of dollars but require months of production to fulfill.
The company is worried because it “can’t be sure if the agency’s loans and other aid will be available after June 30,” when its current charter is scheduled to expire.
Congress has traditionally extended Ex-Im’s charter for multi-year periods without significant opposition, but this year a number of influential Republicans fought to prevent re-authorization, calling the bank a form of corporate welfare for large corporations like Boeing and Caterpillar.
Ex-Im’s defenders managed to prevent its immediate closure, but had to accept a last-minute compromise re-authorizing the bank for only nine months, rather than the five years they had sought. (RELATED: Export-Import Banks Gives Billions to Boeing, Coal to Taxpayers)
The short-term extension, however, has only increased the uncertainty surrounding the bank. “We’ve been waiting on a down payment for this contract for some time, and it’s being delayed because of his concerns that the financing might not go through,” Tyler Schroeder, Air Tractor’s financial analyst, told the Times.
If the contract falls through, Schroeder continued, the company would have to stop production, leaving it stuck with so much extra inventory “that we might have to cut back on employees.” (RELATED: Boeing, Delta Square Off on Export-Import Bank)
Despite such warnings and appeals, Republican critics appear as determined as ever to close the bank. House Majority Leader Kevin McCarthy and House Financial Services Committee Chairman Jeb Hensarling are considered two leading proponents of shuttering Ex-Im.
Jeff Emerson, Hensarling’s spokesman, told the LA Times that, “He believes Congress should allow Ex-Im to expire on schedule because it’s fundamentally unfair to small businesses and taxpayers.”
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