Chamber, manufacturers leaning on reluctant lawmakers to keep export credit flowing.
- By Jamila TrindleJamila Trindle is a senior reporter who covers finance, economics and business where they intersect with national security and foreign policy. Her beat spans everything from the economic underpinnings of conflict to sanctions, corruption and terror finance. Before coming to Foreign Policy magazine, Jamila reported for the Wall Street Journal’s Washington bureau, covering financial regulation and economics. She has also worked as a foreign correspondent in China, Indonesia and Turkey as a freelancer for NPR, Marketplace, The Guardian and others. She moved back to the U.S. to cover the post-crisis economy for PBS in 2009.
Jim Stouch came to Washington last month on behalf of his York, Pennsylvania, manufacturing company to meet with five congressmen and his state’s Republican senator, Pat Toomey. He had a simple message for lawmakers who want to dismantle the government-backed Export-Import Bank that has financed his firm’s deal to sell containers for spent nuclear fuel to Japan: Find another target.
"There is plenty of waste going on in Washington that doesn’t magnify jobs the way the Export-Import Bank does," Stouch said.
While the rest of the country is focused on beaches and barbecue, business groups around the country are pushing lawmakers to renew the bank’s charter, which will expire Sept. 30 unless Congress acts.
The Export-Import, or Ex-Im, Bank backs export deals for U.S. companies to make it easier for them to sell products overseas. The bank was created to help rebuild industry and spur job growth during the Great Depression; its charter has since been renewed 16 times. But now the agency’s future is in question after House Republican leaders, who have accused the bank of providing corporate welfare, said they’d like to shutter it.
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said at a hearing last week that the main beneficiaries of the bank are "the largest, richest, most politically connected corporations in the world — like Boeing, General Electric, Bechtel and Caterpillar." As head of the committee overseeing the bank, Hensarling can block House legislation that would keep the bank alive. Critics dub the bank "Boeing’s Bank" because it provides more financing for the giant airplane maker than for any other company.
Supporters argue that every mega-deal the bank guarantees for Westinghouse Electric Co., Boeing Co., and General Electric Co. helps those companies support suppliers that provide U.S.-based jobs. Companies that tap the agency’s credit say eliminating the bank would put them at a disadvantage against foreign competitors that are often backed by their own governments and would jeopardize hundreds of thousands of American jobs. The bank authorized $27.3 billion worth of loans that enabled $37.4 billion in exports and supported 250,000 U.S. jobs in 2013, according to the bank and the U.S. Chamber of Commerce.
With time running short for arm-twisting, the U.S. Chamber of Commerce and the National Association of Manufacturers are urging member companies and local chapters to track down their congressional members while the lawmakers are in their districts over the July Fourth weekend and the upcoming August recess. The chamber represents some 3 million companies and spent more than $74 million on lobbying in 2013, according to the Center for Responsive Politics. NAM spent more than $7 million trying to influence government policies last year.
"Members, as they’re home this week, are going to hear from local business," said Christopher Wenk, the chamber’s senior director for international policy. Wenk is spearheading the group’s mobilization effort, which is especially focused on members of the authorizing committees: House Financial Services and Senate Banking.
Democrats are pushing for a Senate bill, hoping it will spur corresponding House action. Sen. Chuck Schumer (D-N.Y.) said in a conference call Tuesday that his Republican colleagues are skittish because many Tea Party-leaning members oppose the bank.
"I think if we can pass it in the Senate, and particularly with a good bipartisan majority, there is more friendliness among Republicans for this bill, that it will put pressure on the House," Schumer said, according to Roll Call.
For some companies, the campaign is in full swing. The nuclear industry relies on backing from the trade bank to compete against state-owned and government-backed companies in bidding multibillion-dollar, multiyear contracts in other countries. Officials from Pittsburgh-based Westinghouse have met with lawmakers while CEO Danny Roderick has even gotten employees in on the effort.
"He urged employees to make their voices known and to reach out to members of Congress," said Jeanne Lopatto, vice president of government and international affairs.
Precision Custom Components was started in 1876 to make patented water wheels for grinding grain. It went on to make the original turbines for the Hoover Dam. Now the company employs 250 people in York, Pennsylvania, making large components and custom parts for nuclear reactors and submarines in a 275,000-square-foot shop that uses machines as big as houses. Stouch, vice president for business development, said his firm not only seeks export financing from the Export-Import Bank itself but is also bolstered when the agency helps Westinghouse — which Precision supplies — get contracts in China and the United Arab Emirates.
"It enabled them to bid it; it enabled them to win it; and it enabled businesses like ours to participate in the supply chain," Stouch said.
Alex Halper, with the Pennsylvania Chamber of Business and Industry, said closing the Export-Import Bank now would be poor timing as companies are trying to ramp up sales to other countries post-recession.
"Back in 2007 and 2008, when we really got hit, it would have been nice if we had a more diverse customer base and could rely on exports," Halper said. "Some companies that never even considered exporting are now making a go of it."
Despite the all-hands-on-deck effort, keeping the bank in business is an uphill battle. Toomey, for instance, sits on the Senate Banking Committee, where renewal legislation would originate, and has advocated ending the bank. Officials from the Chamber of Commerce, Westinghouse, and Precision Custom Components have met with the former Club for Growth president, but to no avail. (Under the current president, former Indiana Rep. Chris Chocola, the influential, conservative Club for Growth opposes renewing the bank’s charter.)
"He has a point of view and, on balance, he doesn’t agree with us," Stouch said.