For months, the Export-Import Bank of the U.S. has been unable to vote on large new loans because its board is one member short of a quorum, putting on hold $20 billion in potential aid for U.S. sales overseas. Engineering firms and other Ex-Im supporters back legislation to clear the logjam, but the measures are by no means assured of passage.
Ex-Im’s board must have at least three members in order to vote on loans above $10 million. But the bank’s authorization lapsed in June 2015. By the time Congress reauthorized Ex-Im last December, its board had just two members. In January, President Obama sent an Ex-Im nomination to the Senate, but Banking Committee Chairman Richard Shelby (R-Ala.) has declined to hold a hearing.
The bank has about 30 pending transactions in the pipeline, totaling more than $20 billion, an Ex-Im spokesman says. That backlog includes potential deals that affect U.S. engineering firms, says Steve Hall, American Council of Engineering Companies vice president for government affairs. For U.S. firms seeking overseas projects, Ex-Im has become “an important tool for many of them to win business,” he adds.
Hall says U.S. firms “clearly bring the best engineering experience and expertise to the table, but foreign clients want to see financing, as well, which is where the bank plays an essential role.” Ex-Im backers note that U.S. firms compete for overseas work against foreign firms that draw on active export-aid organizations.
Heavy-equipment makers want to see Ex-Im act on the stalled loans. Michael O’Brien, an Association of Equipment Manufacturers spokesman, says, “In a time of a strong dollar and soft export markets, it’s more important than ever that we aren’t fighting with one hand tied behind our back, so to speak, and that we’re really making every effort to promote exports.” Caterpillar Inc. “remains hopeful that the Senate will find a solution in order to get the bank fully operational again,” says Cat spokesman Matt Lavoie. “It’s incredibly important to our customers and for exporters in the United States.”
Obama’s Ex-Im nominee, J. Mark McWatters, is on the National Credit Union Administration board and is a former aide to Rep. Jeb Hensarling (R-Texas), one of Ex-Im’s strongest critics on Capitol Hill.
But Shelby isn’t budging. Torrie Matous, a Shelby spokesperson, says via email that the senator “does not plan to hold a confirmation hearing on the Ex-Im nominee this year.” She adds, “Senator Shelby fundamentally opposes the Export-Import Bank and believes that his actions are in the best interest of the American taxpayer.”
Matous also notes, “Nearly 99% of all American exports are financed without the Ex-Im Bank, which demonstrates that the bank is more about corporate welfare than advancing our economy.” Ex-Im advocates back a Plan B: language in Senate and House fiscal year 2017 appropriations bills to let two board members be a quorum for the next three years. “That’s really where our focus is right now,” Hall says. “If the Senate’s not willing to do its job and approve these nominees, then let’s change the quorum rules so the bank can proceed with doing its job.”
So far, those bills have only cleared committee. Congress isn’t expected to approve full-year 2017 spending measures any time soon. Instead, a continuing resolution is likely by Oct. 1, when FY 2017 begins.