US President Barack Obama on Saturday urged business owners to press the US Congress to reauthorize the US Export-Import Bank, which could halt any new financing on Sept. 30 — as some conservative Republicans hope it would — if lawmakers fail to act.
The little-known institution provides loans to buyers of US products abroad. Obama said in his weekly radio address that if the US Congress allows the bank close, it would stunt growth in US exports and impede economic expansion.
“If Congress fails to act, thousands of businesses, large and small, that sell their products abroad will take a completely unnecessary hit,” Obama said.
While playing a relatively small role in US exports, the bank has become a political flashpoint. Conservative Republicans single it out as an unnecessary and potentially risky government program, while moderates and most Democrats defend it as providing a useful boost to businesses seeking new markets.
Household names such as Boeing Co, Caterpillar Inc and General Electric Co are big beneficiaries of the bank’s services. Critics of the Export-Import Bank say aiding well-established firms such as those serves little purpose and puts taxpayers at risk.
Opposition to renewing the bank’s charter includes influential lawmakers such as US House of Representatives Majority Leader Kevin McCarthy and House Financial Services Committee Chairman Jeb Hensarling, both Republicans.
Hensarling, in a statement on Saturday, said the Export-Import Bank amounted to “foreign corporate welfare” that benefited mostly “a handful of powerful politically connected corporations.”
“What would really help American manufacturers and small businesses compete on a level playing field are pro-growth tax, energy, regulatory and liability policies that the House has already passed but are being blocked by Democrats in the Senate,” he said.
Fueling concerns about the bank’s role, the US’ Delta Airlines charges that the institution provides an unfair advantage to foreign competitors.
“If left to do business as usual, the bank has proven that it will continue to help all foreign airlines indiscriminately, including well-funded and state-supported ones that competitively threaten US airlines and their employees,” Delta senior vice president Andrea Fischer Newman wrote to Hensarling last week.
The airline wants a ban on Export-Import Bank backing deals to buy wide-body aircraft, such as Boeing 747s. Boeing says that without Export-Import Bank financing, airlines around the world would buy Airbus planes, usually with French or German export credit subsidies.
“The US aerospace industry would lose sales and market share, and the jobs associated with that lost business would end up in Europe,” Boeing senior vice president Tim Keating wrote to Hensarling last week.
The bank’s supporters hope that US Congress will temporarily renew the bank’s charter in a stopgap government funding bill that would have to pass before Sept. 30. That would leave lawmakers more time to craft legislation that would provide a longer charter extension but contain reforms to the bank that would mollify critics.
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