WASHINGTON, June 25 (Reuters) - The future of the U.S. Export-Import Bank was cast further into doubt on Wednesday after an influential conservative lawmaker labeled the bank an example of corporate cronyism that benefits multi-nationals at the expense of taxpayers and many small companies.
Representative Jeb Hensarling, a Texas Republican who heads a Congressional panel which is key to the future of the Ex-Im Bank, said the lender could not be allowed to continue in its current form, although he stopped short of calling for it to wind down.
The bank’s financing primarily benefits “some of the largest, richest, most politically connected corporations in the world,” like Boeing, General Electric, Bechtel Corp and Caterpillar, Hensarling said.
“If you’re a politically connected bank or company that benefits from Ex-Im, no doubt you would like it continue. After all, it’s a sweetheart deal for you,” he said at the start of a hearing by the House of Representatives Financial Services Committee into whether to renew the bank’s charter.
“But if you work at a small business or other American company competing in the global marketplace, it’s unfair. Ex-Im effectively taxes you while subsidizing your foreign competitors.”
Ex-Im’s survival is in question given opposition from senior Republicans such as Hensarling and Kevin McCarthy, who was chosen last week for the No. 2 job in the House.
The bank, which provides loans for foreign buyers of U.S. exports and export insurance and loan guarantees for U.S. firms, must have its charter renewed by Sept. 30 to keep operating.
Hensarling noted a media report that four Ex-Im officials had been suspended or removed as investigators look into charges of improper gifts and kickbacks, saying: “Ex-Im may not just be guilty of cronyism, it may be guilty of corruption as well.”
Democrats on the panel were united in their support for the bank, which they said helps exporters compete in international markets where foreign firms benefit from government export support. Efforts to scrap the agency are due to pressures from the Tea Party wing of the Republican party, the panel’s top Democrat, Maxine Waters, said.
“At one time, programs like the Ex-Im bank were so apolitical that they did not even require a vote. Now policies that create thousands of jobs and increase American competitiveness are under constant attack,” she said, adding that 200 Democrats had signed up to co-sponsor a bill to reauthorize the bank.
A North American airline pilots union called for reforms to ensure Ex-Im did not provide an unfair business advantage to foreign airlines.
U.S. carriers could not get the discounted financing Ex-Im provides to buy U.S.-made planes, said Lee Moak, the president of Air Line Pilots Association International, but foreign state-owned airlines could.
The chief executive of Delta Air Lines, Richard Anderson, said Ex-Im’s favorable loan terms to Emirates, the Dubai-based airline, were equivalent to $20 million per plane, giving the carrier one free plane for every eight new planes it buys. (Writing by Krista Hughes; Editing by Caren Bohan and Leslie Adler)