House backs Export-Import Bank; Blunt predicts Senate approval
WASHINGTON – Fending off opposition from some conservatives, the House on Wednesday approved a compromise bill to reauthorize the Export-Import Bank, which provides loan guarantees to help U.S. exporters -- including 78 firms in Missouri and 236 in Illinois – sell their wares abroad.
“This is a jobs bill,” said U.S. Rep. Blaine Luetkemeyer, R-St. Elizabeth, who helped garner the support of 30 conservative House Republicans for the legislation.
“Critics say that Ex-Im funding only benefits the nation’s largest companies. But that is simply not the case,” he said, adding in his House remarks that that relatively small firms in his northeast Missouri district benefit from such help.
But the 93 Republicans who voted against the bill, including Rep. Todd Akin, R-Wildwood, and Rep. Ron Paul, R-Texas, contended that the bank distorts free trade and too often benefits big firms that could get similar help from the private sector.
“This is an area where the federal government is involved in something that could be done in the private sector,” Akin said in an interview after the vote. “The theory is that it makes us more competitive against foreign countries that subsidize their businesses. But that doesn’t mean it’s a good idea for our federal government to subsidize big industry.”
The vote in favor of the bill was 330-93. While all House Democrats supported the bill, Republicans were split, in part because of the opposition of tea party groups and the arch-conservative Club for Growth and Heritage Action for America – both of which listed the Ex-Im vote as a key vote in their conservative ratings scorecards. Akin was the only Missouri congressman to vote no.
Among House Democrats who supported the bill was Rep. Russ Carnahan, D-St. Louis, who said "the crucial financing provided by the Export-Import Bank allows local businesses and manufacturers, including Boeing, to stay competitive on a global playing field and market St. Louis-made products all across the world. I was pleased to vote for the bipartisan agreement to reauthorize and expand this crucial tool for American commerce."
A state-by-state analysis by the Ex Im Bank found that 54 of the 78 Missouri exporters helped by the bank – and 147 of the 236 Illinois firms – are classified as small businesses. In all, 28 companies in the St. Louis area benefited from the bank over the past five years.
The top destinations for Missouri exports aided by the bank (which lent $467 million to Missouri firms to support $1 billion in export sales) were Mexico, India and Brazil. In Illinois -- the bank lent $3.5 billion to Illinois firms to support $6.7 billion in export sales -- the top export destinations were Kazakhstan, the Netherlands and Ukraine.
The House bill is expected to be taken up soon in the Senate, where Sen. Roy Blunt, R-Mo, expects it will be approved. “The Ex-Im bank has significant Missouri impact because of all of our aircraft suppliers,” Blunt said Wednesday. He said the House-passed compromise would get Senate support, “and I would expect that to become the law.”
With its charter set to expire at month’s end, the Ex-Im had bank appeared to be in trouble in the House as of a couple of weeks ago. But Luetkemeyer and Rep. John Campbell, R-Calif., organized a letter by 30 conservative Republicans to the GOP leadership, supporting “a multiyear reauthorization of Ex-Im that provides certainty and stability for U.S. manufacturers and exporters as soon as possible.”
That support helped convince conservative House Majority Leader Eric Cantor, R-Va., to back the compromise bill, which extends the bank’s charter through 2014 and raises its lending limit gradually from the current $100 billion to $140 billion.
As part of the deal, Ex-Im would be required to maintain default rates below 2 percent. Also, the Treasury Department would be ordered to open talks with U.S. trading partners toward “substantially reducing” and ultimately ending export financing subsidies.
“Make no mistake, I am no fan of government subsidies [that] distort the free market and global trade,” Cantor said. “And in a perfect world, the Ex-Im Bank and its counterparts in Europe and Asia and elsewhere would not exist.” But, given that other countries heavily subsidize exports, he argued that closing Ex-Im would amount to “unilateral disarmament” in export wars.
But other conservatives dismissed that argument. “If other nations want to impoverish themselves [by subsidizing exports], we don’t need to imitate them,” argued Rep. Tom McClintock, R-Calif. “We’re told this doesn’t cost the taxpayers money. `The last few years this turned a profit.’ That’s what they told us about Fannie Mae and Freddie Mac until they blew up in our face.”
GOP support for the bill was bolstered by business groups such as the U.S. Chamber of Commerce and National Association of Manufacturers, which argued that the bank helps small business as well as big corporations. Last year about 87 percent of the $32 billion in Ex-Im transactions directly benefited small business, providing about $6 billion in support for export financing.
Even so, some critics derided the bank as “Boeing’s bank” because the Chicago-based aerospace company is the largest single beneficiary of Ex-Im funds. The bank helped finance about $11 billion worth of Boeing’s commercial aircraft sales.
In all, Ex-Im says its financing – mostly in the form of loan guarantees but also some direct loans and credit insurance – supports 290,000 jobs, including 85,000 aerospace jobs. The bank, which is an independent federal agency, operates through fees and interest charges and does not receive money from the government.