If the battle over the U.S. Export-Import Bank is Washington’s latest political tempest, then Don Nelson from Bakersfield, California is aiming at the eye of the storm.
Nelson’s small oilfield equipment company is part of new House Majority Leader Kevin McCarthy’s district, and he wants the suddenly powerful politician to know that the Republican right’s war on what it sees as “crony capitalism” at the export credit agency could claim hometown casualties.
“It would be a disaster for our company,” if the Ex-Im Bank is shuttered as McCarthy and a faction of House Republicans hope, said Nelson, president of ProGauge Technologies, Inc., who said he voted for McCarthy.
With two-thirds of his business and perhaps half of his company’s 100 jobs dependent on deals Ex-Im helps finance, “I need to meet with Kevin McCarthy and let him know, this is not a good thing for America.”
The 80-year-old bank provides about $37 billion a year in direct loans to foreign buyers of U.S. products, credit guarantees to American companies and credit insurance to aid exports. Critics, including the House Tea Party caucus, say it unduly benefits insiders who know how the system works.
Ex-Im’s fate may hinge on the success Nelson and other small entrepreneurs have in convincing their lawmakers that the agency isn’t just a sink where tax money disappears into global companies like Boeing, Corp. It aids the very small businesses that Republican critics say are being put at a competitive disadvantage by the program.
The bank has had mixed success on that front. It has missed its own internal targets for small business lending and much of its activity does support mega-companies like Boeing Co. and Caterpillar Inc .that would arguably fare just fine on their own.
But the bank reaches further than just financing airplanes and mining trucks, and hundreds of businesses and groups from across the country have been mobilized in what is probably Ex-Im’s best chance of survival.
Steered by Washington’s corporate and lobbying elite, the campaign has reached far into the countryside.
The 90,000 folks in Idaho’s rural Bannock County aren’t big exporters — yet. But Pocatello-Chubbuck Chamber of Commerce President Matt Hunter said they are trying to lure firms to set up operations in the county that would likely want access to the export financing that Ex-Im Bank provides.
“I have already sent the emails,” to Idaho’s all-Republican congressional delegation, Hunter said.
“MADE IN THE USA”
As Washington agencies go, the Ex-Im Bank is small potatoes.
The most unfavorable interpretation of its finances is that it costs taxpayers a net of around $200 million a year, and its deals cover only 2 percent of U.S. exports. It does charge for its services — helping overseas buyers acquire U.S. exports or aiding companies like Nelson’s post collateral for deals — and by its own accounting turns a profit.
While much of the lobbying is being led by movers and shakers at the U.S. Chamber of Commerce, the Aerospace Industries Association, the Financial Services Roundtable, the Nuclear Energy Institute, and a host of other major industrial groups others are also pushing back hard.
There are divisions within the Republican party over whether to allow the bank to live on. The U.S. Congress is debating whether to reauthorize it, and some congressional leaders like McCarthy want to let the authorization expire this fall.
Republican Representative Adam Kinzinger from northern Illinois said he worried about “a libertarian theology that’s really starting to creep in.” If the bank disappears, he said, it could damage U.S. competitiveness as well as small businesses in his district.
“We’re for limited government, we’re not for no government.”
At Price Pump, a California company that makes industrial pumps, Bob Piazza said he relies on Ex-Im bank credit insurance and could lose a million dollars a year in foreign sales.
He has made sure Congress knows it. In letters to lawmakers, he said the choice boils down to keeping the “Made in the USA” label in circulation, or ceding ground “to a European, Southeast Asian, or even the Chinese … And once you lose a customer it’s very difficult to get that business back.”
(Additional reporting by Emily Stephenson, Susan Cornwell, Mark Felsenthal, Krista Hughes, and Anna Yukhananov)