US Export-Import Bank chairman and president Fred Hochberg says he is confident Congress will vote to renew the bank’s charter before it expires June 30, despite opposition from conservative Republicans.
“I am still confident that we are going to get reauthorized,” Mr. Hochberg told a Monitor-hosted breakfast for reporters. The bank guarantees loans for US companies that sell products overseas.
“The fact that we create jobs, we send money to the Treasury, and 90 percent of our customers are small business are compelling arguments,” he said. Last year the bank returned $675 million in profits.
“We need more trade agreements,” Hochberg said, referring to President Obama’s battle to win congressional approval of fast-track negotiating powers called trade promotion authority (TPA) and of a massive Trans-Pacific Partnership (TPP) trade agreement with a dozen Pacific Rim countries. But the bank’s chief executive said he thought Ex-Im would be reauthorized regardless of the outcome of those other trade battles.
The chairman acknowledged he was not certain Congress would reauthorize the bank before the June 30 expiration of its ability to make new loans. “I am going to leave the legislative strategy and tactics to people on the Hill,” he said. One frequently discussed scenario is that reauthorization of the bank will be tied to a must-pass congressional measure this summer funding highway construction.
Hochberg disclosed that this week he had lobbied House majority leader Kevin McCarthy (R) of California and House Financial Services Committee chair Jeb Hensarling (R) of Texas. Both are on record opposing Ex-Im reauthorization.
Representative McCarty told "Fox News Sunday" anchor Chris Wallace, “I think Ex-Im Bank is ... something government does not have to be involved in. The private sector can do it." Representative Hensarling wrote in National Review that the bank is about entrenching trade barriers, “not to mention providing a form of corporate welfare to the top 50 members of the Fortune 500 companies, and functional foreign aid to the likes of China and Russia.”
Hochberg said he met with Hensarling on Wednesday and had a long conversation with McCarthy on Thursday. “We talked about some of their concerns regarding Ex-Im,” Hochberg said. “I am looking for a solution. I am looking to forge and to find common ground.”
If the bank stops making new loans for a significant amount of time, Hochberg said the result would be “you will see layoffs, you will see lost business, and ... we are already seeing foreign governments and foreign companies taking advantage of the uncertainty.”
Some conservatives, like Rep. Jim Jordan (R) of Ohio, take a different view. If the bank is not reauthorized, “the sky will not fall. The seas will not rise. In fact, in my view, and in the view of many economists, quite the opposite will happen,” he said in a statement. “The expiration of the Bank’s charter will mean that companies doing business overseas will reorient themselves away from Washington and towards market signals. The Bank’s absence will make our economy stronger.”
On Friday the bank released its annual report on competition in the global credit markets. It found that competition has “ramped up markedly for US exporters.” Only about a third of other governments’ trade financing activities abide by the Organization for Economic Cooperation and Development (OECD) rules that Ex-Im follows. That level of compliance with the OECD standards is down from 100 percent in 1999.