SIA: Ex-Im Impasse Killing U.S. Contracts, Congress Must Fix

SIA: Ex-Im Impasse Killing U.S. Contracts, Congress Must Fix

The Satellite Industry Association (SIA) renewed its push to convince Congress to reauthorize the Export-Import Bank today.  The industry organization said that at least three satellite manufacturing contracts have been lost since the Bank was closed to new business on July 1.

SIA and other aerospace industry organizations and companies have been warning Congress about the need to keep the Ex-Im Bank operating since last year when its usually routine reauthorization came into question.  The Bank was created in 1934, but needs to be reauthorized periodically.   It provides financing for sales of U.S. goods overseas, including aerospace products such as communications satellites.

The Bank’s existence was threatened about this time last year, but Congress temporarily reauthorized  it through June 30, 2015 in the FY2015 Continuing Resolution (CR).   Congress did not pass a reauthorization by that date, however, and another attempt in July also failed.  The Bank cannot make new loans, only administer those already granted.

The debate pits very conservative Republicans and very liberal Democrats against the rest of their parties.   Opponents argue it is “corporate welfare” for a few big companies like Boeing, while advocate argue that small and medium companies also benefit directly or indirectly because they are suppliers to the big companies.

SIA and the Aerospace Industries Association (AIA) have written to Congress and issued press releases in the past supporting the Bank.  More recently, some of the affected companies have come out publicly themselves to highlight the impact on their businesses.   Individual companies often are reluctant to discuss specific contracts because they are proprietary, but Boeing has been particularly vocal in recent months, and at a September Washington Space Business Roundtable panel discussion, Orbital ATK identified a contract it says it lost because of the impasse.  

In today’s statement, SIA President Tom Stroup said that U.S. companies have had “at least three pre-existing commercial satellite orders withdrawn, lost other awards, and been barred from other competitions already.”   Calling that just “the tip of the iceberg,” he exhorted Congress to reauthorize the Bank.  “Our industry can dominate the market if Congress ensures a level playing field with European satellite manufacturers, all of which have access to foreign [Export Credit Agency] support.” 

SIA calls itself “the unified voice of the U.S. satellite industry” and has more than 35 members, including Boeing and Orbital ATK.   It said today that since 2010, 16 satellite projects worth $4 billion have been financed by the Bank “supporting tens of thousands of U.S. jobs.”  It asserts that satellites form the largest growth category of Ex-Im financing and has “generated a net profit … returning funds to U.S. taxpayers.”

The Senate has managed to pass provisions to extend the Bank, but they were blocked in the House.  The House Republican leadership has not allowed them to be debated on the House floor.  Rep. Steven Fincher (R-TN), a Republican who supports the Bank, reportedly is planning to use a procedure called a discharge petition to get the issue out of the Financial Services Committee and onto the House floor where he and other advocates believe they have more than enough votes to pass a reauthorization.

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