A U.S. agency that helps foreign companies buy American-made products is facing the biggest test in its 80-year history as House Republicans press to shut the U.S. Export-Import Bank.
Companies including Boeing Co. (NYSE:BA), General Electric Co. (NYSE:GE) and business groups for hundreds of manufacturers promised yesterday to ramp up their lobbying to prevent the bank’s demise, which they said would jeopardize billions of dollars in sales of goods from crop dusters to satellites and airplanes.
“Customers have been telling us for months that they are concerned about the bank’s future,” Boeing spokesman Tim Neale said by e-mail. “If Ex-Im is not reauthorized, Boeing will be placed at a competitive disadvantage to Airbus,” the European plane maker that gets its own government support, he said.
The bank debate highlights a split between factions of the Republican party: Tea Party-aligned members who back smaller government and oppose the bank and lawmakers who support some aid for businesses big and small.
President Barack Obama has proposed reauthorizing the bank’s charter for five years. The plan also would raise the cap on total loans the bank can guarantee to $160 billion from the $140 billion now. The lender last year approved 3,842 requests for assistance, according to its annual report. Small businesses accounted for 89 percent of the total number of deals, it said.
The effort against Ex-Im gained momentum this week when the new No. 2 House Republican, Majority Leader-elect Kevin McCarthy of California, said Congress should let the bank’s charter expire Sept. 30. He said the private sector can offer what the bank gives foreign companies seeking U.S. products.
Without the House’s support, even U.S. Senate action to extend funding for the the bank wouldn’t be enough.
The bank offers loan guarantees and other financing to foreign companies that borrow money to buy American products, which were valued at $37.4 billion in 2013 alone. The backing helped sell a range of U.S. goods, from Air Tractor Inc.’s planes for crop dusting to satellites by Orbital Sciences Corp.
Opponents including small-government advocacy groups like Heritage Action for America and Americans for Prosperity, say the lender meddles too much in markets.
“We see widespread support at the grassroots level and among conservative organizations for letting the bank expire,” Tim Phillips, president of the Arlington, Virginia-based Americans for Prosperity, said yesterday in a statement.
House Financial Services Committee Chairman Jeb Hensarling, a Texas Republican, favors abolishing the bank. His panel tomorrow holds a hearing with bank critics including Delta Air Lines Inc. Chief Executive Officer Richard Anderson and supporters, including Ex-Im Chairman Fred Hochberg.
“Delta has consistently said reforms are needed to stop U.S. taxpayer subsidized financing to our foreign competitors,” the airline said today in a statement. “The bank should not be reauthorized without significant reforms.”
House Speaker John Boehner, an Ohio Republican who sets the agenda for legislation, is staying out of the fray for now.
“Boehner has been clear that this is an issue that members, particularly on the Financial Services Committee, need to discuss -- and that is happening,” Michael Steel, the speaker’s spokesman, said in an e-mail. No legislation to reauthorize the bank has been introduced in the House.