Ex-Im Bank lives to loan another day

Congress reauthorizes Export-Import Bank for 9 months.    The U.S. Congress threw the Export-Import Bank a temporary lifeline this week, approving a stopgap spending bill to prevent a government shutdown that includes a nine-month extension of the export credit agency’s operating authority. Absent the renewed authority from Congress the independent agency was scheduled to wind down operations on Sept. 30, the end of the fiscal year. 
   On Thursday, the Senate approved a continuing resolution by a vote of 78-22, allowing the government to spend at the levels set in the current appropriations bills since a fiscal year 2015 appropriations package has not been completed. The House passed the bill on Wednesday.    
   A strong block of House Republicans has vigorously opposed the Export-Import Bank, saying it puts U.S. taxpayer dollars at risk to mostly support large corporations that don’t need financing to nail down overseas sales. They advocate that the free market can meet any demand for export financing. 
   Supporters argue that the Ex-Im Bank fills the void when private lenders are averse to taking on risk in certain foreign markets, and that it is especially helpful to small businesses that often need working capital, receivables insurance or loan guarantees to finance sales. They also point out that the U.S. government makes money on the transactions — to the tune of about $1 billion last year.
   Congressional Democrats, who mostly favor the export credit agency, have openly worried that Republicans will try to kill the bank next year when the extension expires if they gain control of the Senate in the November elections. They unsuccessfully pushed for a new vote during the lame duck session, when the Democratic majority will still be in place.
   “I look forward to working with Congress on the passage of a long-term reauthorization of the Export-Import Bank in order to bring certainty to the hundreds of thousands of Americans whose jobs depend on a level playing field for U.S. goods and services,” Fred Hochberg, the agency’s chairman and president, said in a statement. “Businesses don’t pursue overseas sales, invest in their operations, or hire new employees on a month-to-month basis. Similarly, quality American goods shouldn’t lose out to aggressive foreign competitors because of the Export-Import Bank’s still-uncertain future. Overwhelmingly bipartisan majorities in Congress have extended our charter 16 times, and I’m confident that together we can again find a long-term solution. Small businesses and workers in communities across America are counting on it.”
   Business groups expressed relief that the bank will continue its work for the time being, but urged Congress to pass a multi-year authorization.
   “Today’s extension of the Export-Import Bank is a step forward, but to help ensure U.S. companies of all sizes can compete globally and support U.S. growth and jobs, Congress must pass a long-term reauthorization,” Doug Oberhelman, chairman and chief executive of Caterpillar Inc., said in a statement issued by the Business Roundtable. “A long-term reauthorization is needed to provide more certainty to U.S. companies and their suppliers that rely on the Ex-Im Bank to out-compete well-financed foreign competitors for sales around the world.”
   Tyler Schroeder, a financial analyst with Olney, Texas-based Air Tractor, wrote in an op-ed in Thursday’s Fort Worth Star-Telegram that his company depends on the Export-Import Bank for a large part of its business.
   Air Tractor makes crop duster and fire-fighting aircraft.
   “Congress should be looking at ways to help businesses like Air Tractor, not putting us at a disadvantage,” he wrote. “Ex-Im is not a handout. We pay fees to use the bank, and in more than 20 years of using the bank, we have never filed a claim. We ensure that our customers are financially capable of repayment before the bank ever gets involved. What’s more, Ex-Im has a lower default rate than commercial banks.
   He continued, “We don’t use the bank as an easy way out, we use it because it is the only tool we have for exporting into emerging markets. If the private sector could do what Ex-Im does, we would already be using it.”
   Schroeder wrote that the bank “has been crucial in helping Air Tractor gain access to new markets and customers, and ultimately helping us grow and provide more jobs.” He added, “Our foreign customers can’t afford to pay cash up-front for capital-intensive equipment, and if we can’t offer competitive financing, they will buy from someone who can.