WASHINGTON (Reuters) - The Senate Banking Committee chairman warned Tuesday the U.S. Export-Import Bank could be forced to stop operations in two months unless the Senate quickly approves the nomination of Fred Hochberg to lead the government-run bank for another four years.
“If we do not again confirm Mr. Hochberg before July 20, we run the risk of leaving the bank without a quorum to act on many of the transactions before it, which will hurt American workers and exporters,” Senator Tim Johnson, a South Dakota Democrat, said at a hearing on the nomination.
The Ex-Im Bank provides loans, loan guarantees and other types of financing to help big U.S. companies such as Boeing and GE, as well as many small and medium-sized U.S. companies, to export their goods around the world.
The bank needs a quorum of at least three of its five board of directors to approve transactions. In addition to Hochberg, the terms of two other board members expire in July and President Barack Obama has not yet nominated replacements.
The conservative free-market group Club for Growth tried last year to persuade Congress to shut down Ex-Im Bank, which it views as government welfare for big corporations.
But after U.S. business groups such as the U.S. Chamber of Commerce and the National Association of Exporters rallied to the bank’s defense, lawmakers in both the Senate and the House of Representative voted on a bipartisan basis to renew Ex-Im’s charter through September 2014.
Club for Growth’s strategy this year is to encourage like-minded lawmakers to block action on Hochberg and other Ex-Im nominees to deny the bank an operating quorum.
That would “threaten the export sales of the thousands of U.S. companies and the hundreds of thousands of American jobs that depend directly or indirectly on the Ex-Im Bank’s export financing,” the U.S. Chamber and a dozen other business groups said in a letter to the Senate Banking Committee last month.
The committee’s top Republican, Senator Mike Crapo of Idaho, was one of 19 Republicans that voted against renewing the bank’s charter last year.
Senate Republican leader Mitch McConnell of Kentucky also opposed renewing the nearly 80-year-old bank’s lease on life.
Crapo pressed Hochberg during the hearing to address the concern “that the bank is basically providing corporate welfare to some of America’s largest corporations.”
Hochberg replied most of the loans the bank makes are to the foreign customers of U.S. exporters and that the United States is in a competition with foreign governments all too willing to help finance their companies’ exports.
“We can’t unilaterally disarm” by failing to provide similar financing, Hochberg said. When U.S. companies are “going toe-to-toe with competitors that have export financing arranged, we need to make sure they have it as well,” he said.
John Murphy, vice president for international affairs at the U.S. Chamber, underscored that point in a blog.
“Relative to the size of their economies, European governments provide three times as much official trade finance to their exporters as Ex-Im does. China and India provide four times as much. Without Ex-Im’s help, U.S. firms risk being left in the dust,” Murphy said.
Meanwhile, Johnson noted in 2009 the Senate unanimously approved Hochberg’s nomination as bank president on a voice vote, less than a month after he was nominated.
“I am hopeful that the committee and Senate will once again move as expeditiously,” Johnson said.
Editing by Doina Chiacu