WASHINGTON—As Congress debates whether to continue financing the U.S. Export-Import Bank, a top official at the Commerce Department said on Wednesday that shutting down the Ex-Im would hurt small business and American competitiveness in global trade.
“We are the only country having this debate,” said Bruce Andrews, deputy secretary of Commerce. “Without the financing of Export-Import Bank, we will put ourselves at a disadvantage.”
The bank will shut down if Congress does not reauthorize it by June 30.
Conservative lawmakers are wary of continuing support for the Ex-Im. The bank, among other things, provides loans and loan guarantees to foreign buyers of U.S. goods.
Republican Rep. Jeb Hensarling of Texas, the chairman of the House Financial Services Committee, has been leading a charge against the bank, complaining it largely benefits other countries.
Centrists argue the bank helps small businesses and bolsters job production domestically.
Sen. Lindsey Graham, R-S.C., and Sen. Joe Donnelly, D-Ind., said shutting down the bank makes no sense to the global investment community.
“Other countries can’t believe we’re having this discussion,” said Donnelly at a global trade discussion on Wednesday. “What this bank does is it helps create American jobs, and these are the jobs that will either be here or somewhere else in other countries.”
Donnelly said small businesses that subcontract with larger companies might not be able to continue their operations if they no longer receive access to Ex-Im credit facilities.
Many American manufacturers and suppliers also support the reauthorization for the same reasons.
“We have seen some small businesses where almost 100 percent of their businesses is exports,” said Charles Gray, Vice President and COO of Frontier Electronic Systems Corp., a manufacturing company. “Without Ex-Im, they would have gone out of business for now.”
The government cannot expect companies to take all the risk in international trade, especially when the U.S. is facing strong competitions in China, India, Brazil, France and many other markets, said T.J. Raguso, executive vice president at Amegy Bank.
“Every country in the world is working to get their competitive advantage in these global markets,” said Robert Atkinson, president at the Information Technology and Innovation Foundation. “We are the only one who still thinks we should just let our comparative advantage be revealed.”
House Democratic announced Wednesday that they will launch a proposal on Wednesday to extend the Ex-Im Bank authorization for another seven years. That’s longer than the five-year extension proposed Republican Rep. Stephan Fincher of Tennessee in January.
“This makes no freaking sense to me,” Graham said. “It makes money for the taxpayers; it gave us a chance to compete in international market place. There’s no reason to put this bank out of business as long as other people have one that can put you out of business.”