Obama to business: tell your lawmakers to renew Ex-Im Bank

WASHINGTON Sat Aug 23, 2014 2:55pm EDT

U.S. President Barack Obama delivers a statement from Martha's Vineyard, Massachusetts, during his vacation August 20, 2014. REUTERS/Kevin Lamarque

U.S. President Barack Obama delivers a statement from Martha's Vineyard, Massachusetts, during his vacation August 20, 2014.

Credit: Reuters/Kevin Lamarque

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WASHINGTON (Reuters) - President Barack Obama on Saturday urged business owners to press Congress to reauthorize the U.S. Export-Import Bank, which could halt any new financing Sept. 30 - as some conservative Republicans hope it will - if lawmakers fail to act.

The little-known institution provides loans to buyers of U.S. products abroad. Obama said in his weekly radio address that if Congress lets the bank close, it would be stunting U.S. export growth and impeding economic expansion.

"If Congress fails to act, thousands of businesses, large and small, that sell their products abroad will take a completely unnecessary hit," the president said.

While playing a relatively small role in the U.S. export universe, 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 (BA.N), Caterpillar Inc (CAT.N) and General Electric Co (GE.N) are big beneficiaries of the bank's services. Ex-Im Bank's critics 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 new House Majority Leader Kevin McCarthy and House Financial Services Committee Chairman Jeb Hensarling, both Republicans.

Hensarling, in a statement on Saturday, said the Ex-Im 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, Delta Airlines (DAL.N) charges that the institution provides an unfair advantage to foreign competitors of the U.S. carrier.

"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 U.S. airlines and their employees," Delta Senior Vice President Andrea Fischer Newman wrote to Hensarling this week.

The airline wants a ban on Ex-Im Bank backing for deals to buy wide-body aircraft, such as Boeing's 747s. Boeing says that without Ex-Im Bank financing, airlines around the world would buy Airbus planes, usually with French or German export credit subsidies.

"The U.S. 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 Congress will temporarily renew the bank's charter in a stopgap government funding bill that must 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.

Paul Ryan, the Republican vice presidential candidate in 2012 and skeptic about the bank, said this week he thinks the bank's charter will be kept alive with a temporary extension.

(Reporting By Mark Felsenthal; Editing by Ken Wills)

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Comments (39)
elsewhere wrote:
Why bother, this man doesn’t understand business anyway.

Aug 23, 2014 7:50am EDT  --  Report as abuse
JustProduce wrote:
With all the problem on his hands, I am not surprised that Obama is trying to distract us with his latest version of a Jedi mind trick.
After decades trading all sort of products internationally, I have never heard about this bank. Looking into it, I am not surprised why the big deal. It is only intended to serve a selected group of large players; companies with much larger access to capital markets than I ever dreamed of. So why would they need it? Well, they don’t. Their foreign (massively) large customers do. In a way, we risk bailing out foreign large companies if they fail to pay the loan.
And I thought that Obama was all about not bailing out large companies. Now I know that he meant US companies. Bailing out foreign large companies would be fine, I guess.

Aug 23, 2014 9:02am EDT  --  Report as abuse
Billyfrumusa wrote:
Thank you Reuters and your Brit controllers for censoring free speech.

The Export-Import Bank is simply a means for some large companies to get a better deal with insider guarantees. This is not a populist mechanism as O’Bama seems to convey. O’Bama has no small business support. Yes, insider large businesses support him, not any small business.

Better leadership would simply create a quid pro quo to add costs to the European supports to be paid by the Europeans.

Aug 23, 2014 9:36am EDT  --  Report as abuse
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