Thursday, July 17, 2014YOUNGSTOWN, Ohio -- Failing to reauthorize the Export-Import Bank will harm the ability of U.S. companies -- particularly small businesses -- to get their products into foreign markets, warns U.S. Sen. Sherrod Brown.
The Ex-Im Bank fills gaps in private export financing. Assistance it offers includes working capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services. By charging fees and interest on all loan-related transactions, the bank is self-sustaining and annually covers all operation and loan costs. Last year, it generated $1 million to the U.S. treasury, according to Brown’s office.
Congressional authorization for the bank expires Sept. 30.
“When I travel around Ohio, I hear from small business owners who want to expand and create jobs and get access to foreign markets but can’t secure private financing due to the credit risks associated with overseas investments sometimes,” Brown said during Wednesday during a conference call with reporters. “Ex-Im lets small business owners focus on exporting their products instead of worrying about their financing.”
Last year the bank supported nearly 200,000 U.S. jobs and more than 250 Ohio businesses, including 178 small businesses. Among the Ohio companies that have benefited from the Ex-Im Bank is Lion Apparel Inc, a privately held Dayton company that makes specialty clothing for firefighters.
John Granby, Lion Apparel senior vice president, joined Brown on the conference call. He reported that Ex-Im assistance helped his company sell nearly 20,000 units to one country over the past eight years. Lion Apparel also partnered with a truck manufacturer to supply firefighting gear for each of the trucks, he said.
“Financing is a very difficult thing,” Granby said. Companies have to obtain letters of credit and U.S. banks sometimes “feel very insecure with open-line credit” involving companies in second- and third-world countries due to their financial instability. Lion Apparel manufactures 150-200 units each week for export under the program, and two weeks ago the company received an order for 2,000 additional sets, which represents two to four weeks of work at the plant, he said.
The Export-Import Bank is “strongly supported” by organizations such as the U.S. Chamber of Commerce and the National Association of Manufacturers, Brown noted.
Congress has reauthorized the bank 16 times since the agency was established in 1934, Brown said. “This should be easy. This should be done without partisan politics,” he remarked. “I’ve been in the House and Senate for two decades. I never remember anybody making Export-Import into a partisan issue the way the tea party has.”
In May, a coalition of conservative groups including Americans for Prosperity, Club for Growth, Freedom Works, Americans for Tax Reform, Heritage Action for America and Tea Party Nation, sent a letter to members of Congress urging them to oppose reauthorization of the Ex-Im Bank. The bank “tilts the playing field away from mid-sized and small businesses in favor of large, politically connected organizations,” the coalition stated.
“The Ex-Im bank is little more than a corporate welfare scheme that benefits politically connected corporate giants at the expense of others,” said Brent Gardner, director of federal affairs for Americans for Prosperity. “It distorts the marketplace, costs the American economy jobs, and puts taxpayers on the hook for multibillion-dollar bailouts when things go wrong. It’s time to break this bank and level the playing field for all American businesses.”
Brown and Granby countered in the conference call, arguing the Ex-Im bank instead levels the playing field against foreign competition.
“I can’t see how it can be construed as corporate welfare,” Granby said.
“In an ideal world, if other countries weren’t assisting their companies in exporting and competing with us this might be a different discussion,” Brown added. Last year, China provided $100 billion in export credit to the $37 billion provided by Ex-Im. Last year alone 81 Ohio small businesses received assistance through the bank, the Democrat added.
“So we know this creates jobs, we know it helps American competitiveness and we know this has been bipartisan for decades and makes sense for American workers ultimately,” he said. “The same crowd [conservative Republicans] wants to wants to privatize Social Security and Medicare, end the Ex-Im Bank and doesn’t believe in a federal role for transportation, he continued.
Two weeks ago Brown visited Boardman to drum up public support for renewal of the Highway Trust Fund. This week, the U.S. House of Representatives approved a short-term fix for the fund.
During yesterday’s conference call, Brown said he wants to make sure the law authorizing the fund doesn’t expire but also wants to put pressure on the House and Senate to produce a five- or six-year transportation bill by the end of the year. He called for a “self-contained” bill and rejected proposals by tea party members calling for elimination of Saturday mail delivery to pay for six months of transportation funding or eliminating Amtrak funding to free up highway funds.
“We need long-term planning. We need to make sure that this is done so it’s predictable for Ohio Department of Transportation officials, for Mahoning and Trumbull County officials,” Brown said. “We need to make sure we fund it in a way that is in fact long term.”
Copyright 2014 The Business Journal, Youngstown, Ohio.
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