Ex-Im Bank Fades Softly Into the Night, For Now At Least

The authorization for the Export-Import Bank, which gives out loans to U.S. companies trying to do business overseas, ends today.  Red flags were waived last fall when its authorization was about to expire and Congress reauthorized it at the last moment.  Not so this time, and its authorization ends at midnight tonight (June 30) with little fanfare.

Congress left town last week without reauthorizing the bank, which was created in 1934.  The Aerospace Industries Association (AIA) issued a press release in the middle of the day today pointing out that it is a long term supporter of the bank because of its impact on aerospace jobs.

New AIA President and CEO David Melcher said Congress “missed an opportunity” to support jobs at American companies.  “Despite the Export-Import Bank of the United States having the support of broad bipartisan majorities” in the House and the Senate, he said, “a small minority has prevented a vote reauthorizing this vital export financing tool for U.S. exporters.”  “Thousands of businesses” big and small benefit “directly and indirectly” from Ex-Im bank loan guarantees, AIA said, and a “failure to restore the bank will strike a blow” at American companies.

The last time the bank’s existence was threatened in the fall of 2014, AIA, the Satellite Industry Association (SIA), and several other space-related organizations sent a letter to Congress saying that during FY2013 “Ex-Im Bank enabled more than $37 billion in export sales from thousands of U.S. companies,” and failure to reauthorize it “would force U.S. exporters to forfeit opportunity in the face of other nations’ aggressive trade finance programs.”  

Congress responded favorably that time, reauthorizing the bank until today, but efforts to defend the bank this time seemed much more subdued.

The bank may continue existing operations for now, but cannot take on new projects.

Critics complain that the bank is “corporate welfare” for big business, according to a National Public Radio (NPR) broadcast today.  Boeing and General Electric are targets of those critics because they received two-thirds of the bank’s loan commitments between 2007 and 2013, The Hill reported, adding that President Obama held a conference call defending the bank because it “helps small and medium-sized businesses — and by the way, big companies like Boeing and G.E. have a whole lot of small and medium-sized businesses who are suppliers of theirs.”

Supporters of the bank are relying on the Senate to vote on reauthorizing the bank when it returns from the July 4 recess; the House’s position is less certain.  National Journal says that while reauthorizing the bank has clear majorities in the House and Senate, it is not clear if Republican House leaders have agreed to allow a vote.

AIA argues that the Ex-Im Bank has helped U.S. companies compete for foreign sales of “U.S. civilian aircraft, launch services and commercial satellites” and “helps level the playing field for America’s aerospace manufacturers.”

For its part, the Ex-Im Bank states on its website tonight that “Due to a lapse in EXIM Bank’s authority, as of July 1, 2015, the Bank is unable to process applications or engage in new business or other prohibited activities.”