Washington – Several Connecticut mayors have joined their counterparts in dozens of cities across the nation in urging congressional leaders to reauthorize the Export-Import Bank, a government agency that makes it easier for American companies to make overseas sales.
A fight over the Export-Import, or “Ex-Im” bank, has become one of the most heated squabbles on Capitol Hill. Many Republicans oppose re-authorization of the bank, whose charter expires on June 30. Other GOP lawmakers are demanding substantial changes.
To boost exports, the Ex-Im Bank provides loans and loan guarantees to foreign purchasers of U.S. products.. The bank also helps U.S. companies insure their shipments overseas.
On Thurday, Mayors Toni Harp of New Haven, Bill Finch of Bridgeport and Pedro Segarra of Hartford made an appeal to Congress to reauthorize the bank.
“As mayors of cities that count exports as a crucial contributor to our U.S. economy, we urge you to reauthorize the Export-Import Bank (Ex-Im Bank) of the United States before its charter expires on June 30, 2015,” the mayors’ letter to congressional leaders said. “Without support from the Export-Import Bank, businesses in cities nationwide will face little or no financing alternatives, putting U.S. jobs in jeopardy.”
The Ex-Im bank identifies 103 Connecticut businesses as exporters, with $2 billion in exports supported by the bank. Big beneficiaries include United Technologies and General Electric.
GOP critics say the Ex-Im Bank uses taxpayer funds to help finance select U.S. exports at the expense of others.
Conservative groups like the Heritage Foundation say the bank is mismanaged and takes on too much risk, which could result in a government bailout. Critics also say the bank’s low-interest loans help foreign competitors to U.S. companies. In Boeing’s case, they say, the Ex-Im’s help allows foreign airlines to borrow to buy Boeing aircraft at a lower rate than that paid by U.S. carriers like Delta.
“Bank procedures certainly could be improved, but Ex-Im officials have thwarted past attempts by Congress to impose reforms,” a Heritage Foundation paper says. “More important, no amount of bureaucratic tinkering can shield taxpayers from bailouts in the event that bank reserves run dry — as occurred in the 1980s — nor will it protect American businesses from the disadvantages of the U.S. government subsidizing their foreign competitors. The only remedy for Ex-Im’s worst consequences is to shut it down.”
The Ex-Im bank has a current default rate of about 0.2 percent. Over the last 20 years it has generated a profit of $7 billion, though it did run low on reserves in the 1980s.
Established in 1934, the bank is chartered as a government corporation by Congress. The bank’s charter has been renewed without fanfare 16 times.