UPDATE 1-US manufacturers press Congress on Eximbank renewal
* 'Competition not standing still'
* Temporary authorization expires on May 31
By Doug Palmer
WASHINGTON, Feb 23 (Reuters) - U.S. manufacturers warned on Thursday of lost U.S. exports and jobs unless Congress moves quickly to reauthorize the U.S. Export-Import Bank, which one conservative Republican group has branded as "corporate welfare."
"Our competition is not standing still and we can't either," Jay Timmons, president of the National Association of Manufacturers, said just a few days after President Barack Obama pushed for renewal of the nearly 80-year-old bank.
Timmons said big U.S. exporters like Boeing, as well as many small and medium-sized manufacturers, relied on the Exim Bank to help them make overseas sales by matching credit terms provided by other state lending agencies in Europe, China, Brazil and India.
The bank is now operating on a temporary extension that expires on May 31. But manufacturers said Congress needed to act in coming weeks to raise Exim's credit exposure cap, which is expected to reach its $100 billion ceiling by late March.
At that point, the bank would be unable to extend new credit guarantees or direct loans until some of its existing loan commitments are repaid. A bill currently stalled in Congress would raise the exposure cap to about $135 billion.
"We've been having lots of conversations with leadership," Timmons said, when asked if NAM felt comfortable that House of Representatives Speaker John Boehner and House Majority Leader Eric Cantor, both Republicans, support reauthorization. "I think leadership on both sides understands the importance of Exim."
A Republican leadership aide said Cantor "intended to move forward" on a reauthorization bill in the coming month and hoped to have both Republican and Democratic support.
The conservative group Club for Growth, which is influential with Tea Party Republicans, has urged lawmakers to vote against reauthorization of Exim Bank. They charge the bank is corporate welfare for big companies like Boeing that should be able to finance their exports without it.
In addition, Delta Airlines has complained to members of Congress that it is hurt by Exim Bank financing because it allows foreign competitors to buy Boeing aircraft on much better credit terms than it can obtain. Domestic companies are not eligible for Eximbank programs to finance purchases of U.S. goods.
"While we don't oppose reauthorization of the Exim Bank, our main goal is to make sure our employees are treated fairly in the process," Trebor Banstetter, a Delta spokesman, said.
BIGGER ROLE UNDER OBAMA
The bank has played a larger role in supporting U.S. exports since Obama took office in January 2009.
That is due largely to the lingering effects of the global financial crisis, which dried up other sources of export financing. But Obama's goal of doubling exports by the end of 2014 has also increased the bank's activity.
After back-to-back record years, Exim's total credit exposure is now more than $90 billion, close to the $100 billion cap set by Congress.
Although about 40 percent to 45 percent of the dollar value of Exim Bank loan and credit guarantee programs support Boeing aircraft exports, about 85 percent of its transactions involve small or medium-sized businesses.
Drew Greenblatt, president of Marlin, a steel wire manufacturer in Baltimore, said he already felt a "chilling effect" on his export sales because of the possibility that Exim could have to stop making loans in four to five weeks.
If Exim financing is not available to match terms provided by other state agencies, customers are "just going to stop talking to me and buy from Germany," Greenblatt said.
Robert Patton, president of Patton Electronics in Gaithersburg, Maryland, also said Exim was vital to his business and expressed frustration that concerns raised by Delta might be blocking reauthorization of the bank.
"It doesn't make sense to hurt all the small businesses because Delta doesn't like the price it's getting on a plane," Patton said.
- Malaysia air probe finds scant evidence of attack: sources |
- Malaysia probes passenger backgrounds for clues on missing flight |
- Confrontation in Ukraine as diplomacy stalls |
- N.Korea using sophisticated means to avoid U.N. sanctions - U.N. report
- Exclusive: Chinese raw materials also found on U.S. B-1 bomber, F-16 jets