Export-Import Bank in dispute in Congress
A fight in Congress over a New Deal-era bank could have consequences for jobs in Pennsylvania and geopolitical interests abroad, according to manufacturers who have called on federal lawmakers to extend its charter.
Republican leaders have pushed for an end to the 80-year-old Export-Import Bank of the United States, which helps foreign companies buy American products.
The bank's charter expires on Sept. 30. Businesses say it must be reauthorized because it helps level the playing field in countries such as China and Russia, where competing companies are heavily subsidized by the government. However, critics characterize the system as a form of corporate welfare that disrupts the free market.
Those arguments are “shallow,” and critics do not appreciate its impact on American economic and political interests, said Danny Roderick, CEO of Cranberry Township-based Westinghouse Electric Co.
“It is not a subsidy to business. It is actually the only vehicle we have to keep a level playing field in the international community,” Roderick said on Friday during a roundtable discussion hosted by the National Association of Manufacturers. “The only other weapon that we have is military, and that's not how we solve business problems.”
The Export-Import Bank provides credit to U.S. companies to fulfill export orders, loans to foreign buyers and offers credit insurance. It is an alternative option for financing when private-sector lenders either don't want to loan money for international sales or demand prohibitively expensive rates.
Since 2007, the bank has disbursed $3 billion for exports from 250 Pennsylvania businesses, including many Pittsburgh area firms, according to bank data.
It supports itself through fees and interest payments and actually makes money for U.S. taxpayers, returning a profit to the Treasury of $1.057 billion in fiscal year 2013.
The bank is not unique, as there are 59 other export credit agencies around the world.
The Heritage Foundation, a free-market think tank, has said supporters overestimate the Export-Import bank's value and that the system corrupts, rather than levels, the playing field.
“Whether well-intentioned or otherwise, government interference distorts the competitive landscape, with winners and losers determined by political considerations rather than the merit of their products and services,” Diane Katz, a Heritage research fellow, wrote in an April brief on the bank. She also said it disproportionately benefits large multi-national corporations.
Not true, supporters say. Nearly 90 percent of the bank's authorized transactions in the 2013 fiscal year were for small businesses.
U.S. Liner Co. was among them.
The Cranberry-based company makes plastic liners for refrigerated trucks and shipping containers and sells products to fabricators in China, said Eric Proie, vice president of finance.
The company, which does $60 million in annual sales, used to have a $2 million line of credit but now mostly relies on the Export-Import Bank for loan insurance.
“The Ex-Im Bank is among the most attractive issuers of credit insurance for small and medium-sized businesses,” Proie said. “It's much less expensive, easier to get, and they're willing to take on riskier accounts.”
There are geopolitical concerns as well.
On Friday, Rep. Jeb Hensarling, a Texas Republican who is chairman of the House Financial Services Committee and a critic of the Export-Import Bank, said it should stop financing projects that benefit Russian companies as pro-Russia separatists battle Ukraine government forces, jeopardizing U.S. interests in the region. In 2013, the bank authorized $630 million for deals in Russia.
The bank could help fund projects that would strengthen Ukrainian independence.
Holtec International Corp., a New Jersey-based nuclear waste specialist with a plant in Turtle Creek, is seeking loan guarantees for a project in Ukraine. Without it, Ukraine will continue to rely on Russia to keep its nuclear reactors running, said Pierre Paul Oneid, senior vice president and chief nuclear officer of Holtec.
“We consider Ex-Im a valuable instrument of our government's foreign policy, of which the situation in Ukraine is a textbook example,” Oneid said during Friday's roundtable. “If we fail the Ukrainians, what is the alternative?”
Manufacturers will “be having some pretty robust discussions with members of Congress” during the August recess and into September to reauthorize the bank charter, said Jay Timmons, president and CEO of the National Association of Manufacturers.
U.S. Sen. Bob Casey, D-Scranton, has said he supports the bank.
“I believe it's vital that we work to reauthorize its charter,” Casey said in a call with reporters this month.
Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or email@example.com. Reuters contributed to this report.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Trax is affordable SUV option
- Renewed fears of Greek default whack stock market
- Mylan discounts speculation of a possible takeover by Teva
- Pa. employers shed 12,700 jobs in March; unemployment rate rises to 5.3 percent
- Glaxo to close Moon office, affecting 274 workers
- PPG axes 1,700 jobs as part of global restructuring
- Hearings set on new environmental rules for gas, oil drilling in Pa.
- EU regulators challenge Google’s domain
- Retailer Etsy crafts successful IPO
- Roku fights streaming’s big boys
- Gas price slump has Consol Energy shedding jobs