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Former President Bill Clinton said the U.S. Congress should renew the charter of the nation’s Export-Import Bank, which expires May 31 and has been opposed by some Republican members of Congress.
“Whether you are Republicans, Democrats or Independents, I urge you to ask the Congress to reauthorize” the Ex-Im bank, Clinton said today at the bank’s annual conference in Washington. The agency provides loan guarantees, insurance and direct lending to foreign buyers who want to purchase U.S. goods and services.
Reauthorization will help to “create a stronger American economy,” Clinton said.
The 78-year-old bank is using the conference to press for a renewal of its charter, which has drawn opposition. In addition to Clinton, scheduled speakers are Chicago Mayor Rahm Emanuel and United Parcel Service Inc. (UPS) Chief Executive Officer Scott Davis.
Critics of the bank, including Senator Jim DeMint, a South Carolina Republican, and the Club for Growth, which supports smaller government, say the lender meddles in private enterprise. Supporters of reauthorization include the National Association of Manufacturers and the U.S. Chamber of Commerce, both Washington-based industry groups.
“Support for the Ex-Im bank used to be a bipartisan deal, and I hope it will be again,” Clinton said. He said he could not recall a debate over reauthorization ever occurring in Congress during his presidency, which lasted from 1993-2001.
The bank’s opponents want to “unilaterally disarm American companies” while other countries including China are increasing their presence in the global market place, Fred Hochberg, the Ex-Im bank’s chairman and president, said today.
“Unilateral disarmament is not a very good recipe for success,” Clinton said.
Congress should renew the bank’s charter for four years and increase its lending authority to $140 billion from $100 billion to keep U.S. exporters competitive, according to Hochberg.
“Other countries will happily step in if we can’t or won’t finance a deal,” Hochberg said. The bank may reach its lending cap before the end of May.
U.S. goods and services exports increased 0.1 percent to a record $181.2 billion in February from the previous month, the Commerce Department announced today. President Barack Obama has set a goal of doubling U.S. exports by the end of 2014, a target the government is “on pace” to achieve, U.S. Trade Representative Ron Kirk told reporters on a conference call this month.
“We give American companies a shot to compete on a level playing field,” Hochberg said. “Whether they win or not is up to them.”
The Export-Import Bank in 2011 provided a record $33 billion in export finance, with almost 90 percent of the transactions benefiting U.S. small businesses, according to Hochberg. The agency’s financing has generated $1.9 billion in revenue for the U.S. Treasury within the last five years, he said. The bank says it finances about 2 percent of all U.S. exports, with the remainder paid for by the private sector.
Last year it supported lending to finance about $11 billion in commercial sales for Chicago-based Boeing Co. (BA), the world’s largest aerospace company, according to an Ex-Im bank fact sheet.
Delta Air Lines Inc. (DAL) of Atlanta and US Airways Group Inc. (LCC) of Tempe, Arizona, in November were part of a lawsuit filed against the Ex-Im Bank, alleging that the lender’s practices put U.S. carriers at a competitive disadvantage, allowing foreign airlines to borrow at cheaper rates. The bank has disputed the claim, and the case is pending in U.S. District Court for the District of Columbia.
The bank should be more transparent in its decision-making process, according to the lawsuit, filed by the Air Transport Association of America Inc., a Washington-based industry group now called Airlines for America. It cited a lack of public comment before the Ex-Im bank on Sept. 30 announced $1.3 billion in loan guarantees to help Air India buy wide-body jets from Boeing.
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