WASHINGTON (Reuters) - Taxpayer-backed financing would “grind to a halt” and many companies would find themselves at a competitive disadvantage if Congress does not renew the Export-Import Bank charter by the end of May, the bank’s president said.
In remarks prepared for delivery at the bank’s annual meeting on Thursday, Fred Hochberg said an effort by some lawmakers to “gut” the organization would disarm businesses “just as foreign competition is heating up.”
Hochberg said export credit agencies around the world are “working to expand their footprint” and increase their financing.
“This is the world we live in. And we’ve got to compete in the world as it is, not as we’d like it to be,” Hochberg said. “However, some in Congress don’t accept this. They want us to move in the opposite direction.”
The comments were the most pointed yet by Hochberg on the election-year controversy that has complicated White House efforts to renew authority for the nearly 80-year-old bank for another four years and raise its credit exposure ceiling by $40 billion to $140 billion.
Its charter expires on May 31.
Bank supporters say it is conservatively run, has experienced very few defaults and makes money for the government. President Barack Obama has touted it as a key to his administration’s goal of doubling exports.
Critics say the bank is an unnecessary government intrusion in the market and puts taxpayer funds at risk.
It provides loans and credit guarantees to help Boeing, its biggest customer, and other U.S. manufacturers make sales in markets that private banks consider too risky to operate in without U.S. government backing.
China, Canada, France, Brazil and other countries have similar government export credit agencies.
Delta Air Lines has raised concerns about the fairness of taxpayer-based loans to help Boeing. Delta says it is hurt by the bank’s financing that allows foreign carriers to buy Boeing planes at lower interest rates than the Atlanta-based airline can get in the commercial market.
U.S. airlines sued last year to block loan guarantees for the sale of Boeing aircraft to Air India. The court denied an initial injunction and the case is pending.
Delta has said the airline’s aim is to eliminate all export financing for wide-body jets, such as Boeing’s 777 and the Airbus A380, which are the type used on long international flights.
Lawmakers are expected to take up the issue this month.
Reporting by John Crawley and Doug Palmer; Editing by Lisa Shumaker