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It’s said that everything is bigger in Texas -- and that’s certainly true of the stakes in the fight over the Export-Import Bank (Ex-Im).
More than 1,000 companies in the Lone Star state rely on the federal export credit agency to help finance billions in international sales and support thousands of American jobs, according to Reuters. In fact, the $22 billion worth of Ex-Im-backed goods and services make Texas one of the two U.S. states with the most to lose if the bank ever went dark.
Why, then, are some of the loudest voices calling for eliminating the bank coming from those elected to represent Texas’s interests in Washington?
Explains Reuters: “The state has the most companies backed by the government's export credit agency, and - paradoxically - is home to the bank's fiercest congressional critics who want to let the institution die when its charter expires at the end of June.”
Much of that criticism comes from Rep. Jeb Hensarling of Texas, chairman of the House Financial Services Committee. Hensarling has said he will not advance legislation that breathes new life into the Ex-Im Bank - essentially issuing a death sentence for an agency that supports more than 160,000 American jobs and has returned $7 billion to the Treasury since 1990.
Hensarling isn’t the only influential Texas Republican trying to eliminate the Ex-Im Bank. Presidential hopeful and former Texas Gov. Rick Perry, who previously tried to save the Ex-Im Bank, last month reversed his stance and came out against renewing the bank’s charter.
As the Reuters story points out, the move would “be seen by many as a fresh blow to U.S. international economic clout months after Washington failed to stop China from launching its own Asian development bank.” The loss of the bank would arguably result in China and 58 other industrial nations nabbing a larger share of international sales and projects.
In back-to-back hearings this week before the Senate Banking Committee and the House Financial Services Committee, U.S. Chamber of Commerce Senior Vice President for International Policy John Murphy called the Ex-Im Bank “one of the most important tools at the disposal of U.S. companies to level the playing field for trade finance as they seek to increase exports and create jobs at home.”
Not reauthorizing the bank, he pointed out, would likely see small U.S. businesses lose opportunities to compete for international contracts and sell their goods overseas. Those sales, Murphy said, “would most likely go to a firm from another country” that offers export credit assistance.
That would hit American businesses hard, including the 1,233 Texas companies that currently rely on Ex-Im’s services to help them sell their goods and services abroad. One of them, a small business in Houston, explained to Reuters exactly what’s at stake.
Jim Adams, managing director of Control Flow Inc., which makes oil wellhead equipment, explained the following to the news service:
Control Flow has exported $75 million worth of equipment, including valves and blow-out preventers, backed by low-interest Ex-Im loans and insurance in the past five years.
Without that support, Control Flow would have to slash prices and accept lower profits to keep export business or cut its 160-strong workforce, Adams said.
Control Flow isn't alone. Earlier this year, more than 500 Texas companies signed a letter urging federal lawmakers to reauthorize Ex-Im. The letter was sent to every member of the Texas Congressional delegation, as well as Congressional leadership.
Hensarling says he wants to help small companies like Control Flow -- but from the sound of it, he believes he knows better what would help small businesses than actual small business owners like Adams.
"I hope to help these small businesses, maybe just not in the way they wish to be helped,” he told Reuters during a break in an Ex-Im hearing on Wednesday. “There are better ways,” he said.
Good luck selling that to Adams.
"We're all conservatives in our company, and our elected representatives are working against us," Adams told Reuters.
Perry’s recent flip-flop on the issue stands out. One year ago, the now-presidential candidate wrote in a letter to congressional leaders that the Ex-Im Bank’s services “are essential in helping small and medium-sized Texas businesses thrive.” He later added that not renewing the agency’s charter “could place Texas and many U.S. companies at a serious competitive disadvantage in the global marketplace.”
And yet, that’s precisely what he and Hensarling are now fighting to do: remove an essential resource for small and medium-sized businesses, put the country at a serious competitive disadvantage, and threaten job losses nationwide -- many of them in right in their own backyards.