Business owners rally to save Export-Import Bank from extinction
On top of hawking his company’s concrete additives, Gabriel Ojeda has been trying to sell something else lately — the virtues of the endangered Export-Import Bank.
He’s among dozens of small-business owners enlisted by the bank’s supporters in an attempt to convince reluctant Republican lawmakers that they should reauthorize the federal export-assistance agency before its charter expires Sept. 30.
“It is important to us,” Ojeda, president of Fritz-Pak Corp. in Mesquite, Texas, said of the $810,000 worth of export assistance his company has received since 2007 to help sell products abroad. “There is very little help in the U.S. for small businesses to go and sell overseas.”
Conservatives have targeted the bank for extinction, calling its support corporate welfare that mostly helps Boeing Co. and other large multinational firms while putting taxpayers on the hook for future losses.
With incoming House Majority Leader Kevin McCarthy (R-Bakersfield) recently announcing his opposition to the bank, its future is in doubt because the Republican-controlled House can simply refuse to bring a reauthorization bill up for a vote.
Bank supporters said that would be a blow to the still-sluggish U.S. economy and have launched a full-scale lobbying blitz to lure enough Republicans to join with Democrats to overcome conservative-led opposition.
President Obama and congressional Democrats have formed an unusual alliance with trade groups, large exporters and small businesses in trying to save the bank. They argue that its loans to foreign buyers and other assistance are crucial to boosting U.S. exports in a highly competitive global economy in which dozens of other nations offer greater support for their products.
“This is an all-hands-on-deck effort across the business community,” said Christopher Wenk, senior director of international policy at the U.S. Chamber of Commerce, which is running ads in Washington and has held hundreds of meetings with lawmakers and their staff urging the bank’s reauthorization.
“We’re concerned and members of Congress need to be hearing from the business community and local businesses that this would have a devastating impact on jobs if the Ex-Im bank would go away,” he said.
Rep. Maxine Waters (D-Los Angeles), a staunch bank backer, has been reaching out to owners of small businesses that have received export assistance, particularly those in districts of Republican lawmakers, to have them tell their stories and press their representatives to reauthorize the bank.
For example, Ojeda’s company is in the district of House Financial Services Committee Chairman Jeb Hensarling (R-Texas), one of the bank’s leading critics. Ojeda said he plans to give Hensarling “an earful” about opposing the bank in a meeting scheduled with the lawmaker next month.
“The role of Congress is not to just down shut down agencies because they’re inefficient or cronyism or favoritism. They should fix it,” Ojeda said.
In addition to rallying business owners, supporters have pointed to the bank’s own data on how many jobs that export assistance sustains in each congressional district.
The bank said the $27 billion it spent last year in loans to foreign buyers and other assistance supported $37.4 billion worth of exports and 205,000 U.S. jobs. The effort came without spending any taxpayer money because the bank makes enough in interest and fees to cover its expenses, supporters said.
Last year, the bank sent a record $1.1 billion in profit to the Treasury. But taxpayers are on the hook for any future losses on the $140 billion in outstanding loans and other assistance the bank has extended over the years.
The bank assisted 3,413 small businesses last year, nearly 90% of all its transactions. But only about a quarter of the bank’s funding went to those businesses.
Critics contend that the bank has tried to spread its money around the country to make it difficult for politicians to shut it down.
“I have no doubt that you have come close to finding a customer in every congressional district in America today,” Hensarling told bank President Fred Hochberg at a hearing last month.
For some lawmakers facing reelection in a tough economy, the tactic makes opposing the bank difficult.
“I’m going to have a hard time, I’m just going to tell you, going back home to my district and telling my people, my folks, that the only thing I’ve done is kill jobs for my district,” Rep. Stephen Fincher (R-Tenn.) said at the hearing. The bank’s lending sustained about 1,000 jobs in his district, he said.
Mark Roberts, chief executive of Springboard Biodiesel in Chico, Calif., provided a letter to Waters explaining how the bank’s export insurance allowed his company to sell $200,000 worth of equipment in Argentina in 2012-13.
“I’m sure there are some areas of the Import-Export Bank that could be changed for the better but to pull all the funding, know it will hurt my business,” he said in an interview. “I will not sell to certain countries.”
Some of the bank’s top supporters are among the biggest spenders when it comes to Washington lobbying.
The U.S. Chamber of Commerce spent more than anybody on overall federal lobbying last year with nearly $75 million, according to the nonpartisan Center for Responsive Politics. General Electric Co., another major recipient of bank assistance, was the fourth-highest-spending company with $16.1 million in lobbying, and Boeing wasn’t far behind at $15.2 million.
Critics have called the agency “Boeing’s Bank” because of the large amount of aid received by foreign buyers of its airliners. Nearly two-thirds of the bank’s loan guarantees last year helped Boeing, said Veronique de Rugy, a senior research fellow at George Mason University’s Mercatus Center.
“They realized they were vulnerable to the charge that they were Boeing’s Bank ... and they’ve made an effort to get the word out about all the small businesses they work with to try to insulate themselves,” said Dan Holler, a spokesman for Heritage Action, a conservative activist group that opposes the bank.
Sen. Maria Cantwell (D-Wash.) said Boeing, which has a major presence in her state, has a supply chain of small businesses that also would be hurt if the bank is shut down.
“The supply chain that supports Boeing is about 80,000 people in Washington state,” she said. “It’s so important that members of Congress hear from these small businesses to understand why this is so important for job creation.”
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