Closure of the Export-Import Bank Could Be Bad News For Chester County and Region

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EX-IM Bank
EX-IM Vista.Today Chester County Daily Business News
Congress has not renewed the Export-Import Banks authorization to make loans to foreign entities. Countries and companies outside the US rely Ex-Im credit to purchase our manufactured goods.

More than 80 years after it was founded to help boost trade during the Great Depression, the U.S. Export-Import (EX-Im) Bank is facing possible closure, mostly due to partisan politics.

The Export Import Bank
The Export-Import bank is housed in the Lafayette Building, just one block from the White House in D.C. –via Wikipdia.

Largely an unsung hero of businesses of all sizes, the banks charter was revoked last week as conservatives point to the use of taxpayer’s money to back big business.

Ironically, the bank is not so much a drain on the economy as a contributor. In 2014 the bank provided $20.5 billion in credit assistance. It did so at no cost to the taxpayer and returned $675 million to the U.S. Treasury from interest and fees.

Its hopefully temporary lack of funding could have an enormous impact on local companies. Without Ex-Im, companies such as Boeing will have to lend its customers money to buy its aircraft, which will significantly boost its costs and threaten production, creating potential job insecurity for its thousands of employees. Boeing rivals such as Airbus enjoy foreign-government financial support.

Ex-Im acts as an engine for job creation, opening new markets overseas and in recent years has also been a significant lender to the Philadelphia area’s two other, private-market-focused helicopter makers, Sikorsky in Coatesville, and Agusta-Westland in Northeast Philadelphia. Smaller companies often rely on the bank to make loans to foreign buyers for their products, and could see significant hits to their sales and profits.

Sikorsky, which assembles helicopters in Chester County, may see aircraft demand drop even further.
Sikorsky, which assembles helicopters in Chester County, may see aircraft demand drop even further.

The bank’s charter, which accepts credit risk to help promote the sale of American-made goods abroad, expired at the end of June. For now, it still has the financing to meet its existing obligations in 2015 giving time for the decision to be reversed.

For most of its history, the bank has had its charter renewed without so much as a recorded vote. Recently however, a growing outcry from conservatives has imperiled it.

U.S. Representative for Pennsylvania, Pat Meehan, for the district that includes the Boeing plant, sees Ex-Im as good for Philadelphia-area jobs. “The Export-Import Bank has supported more than a million jobs nationwide over the last five years and 35,000 jobs in Pennsylvania alone,” Meehan said. “It isn’t a drain on the taxpayer. It covers the cost of its own operations and runs an annual surplus.“

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