Posted:
July 2, 2015
On June 30, the U.S. Export-Import Bank's operating charter expired for the first time in the bank's 81-year history, raising a new threat to the U.S.-flag merchant fleet operating in international trade.
The U.S. Export-Import Bank helps foreign entities finance the purchase and export of goods manufactured in the United States through loans and loan guarantees. In fiscal year 2013, the Export-Import (Ex-Im) Bank helped facilitate more than $37 billion in U.S. export sales, supporting more than 200,000 American jobs at businesses large and small. According to a report published by the Ex-Im Coalition, the Ex-Im Bank earned a profit in 2014, covering its expenses and sending $675 million to the U.S. treasury. In the previous fiscal year, the Ex-Im Bank returned approximately $1 billion to the U.S. treasury. The Ex-Im Bank is self-sustaining and does not cost U.S. taxpayers a single dollar.
Exports financed with the assistance of the Ex-Im Bank must be shipped on U.S.-flagged commercial vessels, providing a strong source of cargo for the U.S. merchant fleet.
Heavy-lift ships operated under contract with American Maritime Officers transport project cargoes made available by the U.S. cargo preference requirements associated with Ex-Im Bank financing. The cessation of Ex-Im Bank activities would create a commercial cargo shortage for these and other U.S.-flagged vessels operating in international trade and exacerbate the steep decline of the U.S. merchant fleet in this sector, further eroding the peacetime job base for U.S. merchant mariners, who are needed to man military sealift and defense reserve vessels in times of war, conflict and crisis.
AMO and American Maritime Officers Service, the lobbying arm of AMO-contracted vessel operators, continue to work on Capitol Hill to secure congressional reauthorization of the Ex-Im Bank's charter.
The expiration of the bank's charter will prevent it from accepting new applications for financing; however, the Ex-Im Bank will continue to operate until it has serviced all of its financial commitments. As reported by Inside U.S. Trade: "The bank in its annual competitiveness report for fiscal year 2014 said its long-term financing can have repayment terms lasting longer than seven years; in FY 2014, the bank authorized $12.7 million in long-term financing."
The continued existence of the Ex-Im Bank was placed in jeopardy in September 2014, when Congress approved a continuing resolution to fund the federal government through December 11 of that year in order to avert a government shutdown. Rather than setting the expiration of the Ex-Im Bank's charter on December 11, 2014, along with funding for most of the rest of the government, or enacting a multi-year reauthorization of the Ex-Im Bank, opponents of the bank succeeded in having the bank's charter extended only until June 30, 2015.
This move separated reauthorization of the Ex-Im Bank prior to the expiration of its charter from must-pass funding legislation to prevent a government shutdown, and for that matter, from any must-pass legislation.
At the time the continuing resolution was approved last September, congressional supporters vowed to continue working toward a multi-year reauthorization of the Ex-Im Bank during the extension period. And they have.
On June 10, Senator Mark Kirk (R-IL) facilitated a 'test-vote' on renewing the Ex-Im Bank's charter. Sen. Kirk offered an amendment to the National Defense Authorization Act (NDAA), an amendment to reauthorize the bank. The Senate voted on a motion to table the amendment, which would have nullified it. A total of 65 senators voted against nullifying the amendment, demonstrating a filibuster-proof majority of support for reauthorizing the Ex-Im Bank in the Senate. The amendment was withdrawn from consideration because the NDAA was not considered a good vehicle for reauthorization of the Ex-Im Bank for a number of reasons.
Reports now indicate a surface transportation funding bill that would need to be passed prior to the expiration of the Highway Trust Fund on July 31, 2015 is the most likely vehicle for an amendment to reauthorize the Ex-Im Bank.
Significant developments with this important issue for AMO and the U.S. merchant fleet will be reported on AMO Currents and in American Maritime Officer.
Expiration of Export-Import Bank charter raises new threat for U.S.-flag fleet
On June 30, the U.S. Export-Import Bank's operating charter expired for the first time in the bank's 81-year history, raising a new threat to the U.S.-flag merchant fleet operating in international trade.
The U.S. Export-Import Bank helps foreign entities finance the purchase and export of goods manufactured in the United States through loans and loan guarantees. In fiscal year 2013, the Export-Import (Ex-Im) Bank helped facilitate more than $37 billion in U.S. export sales, supporting more than 200,000 American jobs at businesses large and small. According to a report published by the Ex-Im Coalition, the Ex-Im Bank earned a profit in 2014, covering its expenses and sending $675 million to the U.S. treasury. In the previous fiscal year, the Ex-Im Bank returned approximately $1 billion to the U.S. treasury. The Ex-Im Bank is self-sustaining and does not cost U.S. taxpayers a single dollar.
Exports financed with the assistance of the Ex-Im Bank must be shipped on U.S.-flagged commercial vessels, providing a strong source of cargo for the U.S. merchant fleet.
Heavy-lift ships operated under contract with American Maritime Officers transport project cargoes made available by the U.S. cargo preference requirements associated with Ex-Im Bank financing. The cessation of Ex-Im Bank activities would create a commercial cargo shortage for these and other U.S.-flagged vessels operating in international trade and exacerbate the steep decline of the U.S. merchant fleet in this sector, further eroding the peacetime job base for U.S. merchant mariners, who are needed to man military sealift and defense reserve vessels in times of war, conflict and crisis.
AMO and American Maritime Officers Service, the lobbying arm of AMO-contracted vessel operators, continue to work on Capitol Hill to secure congressional reauthorization of the Ex-Im Bank's charter.
The expiration of the bank's charter will prevent it from accepting new applications for financing; however, the Ex-Im Bank will continue to operate until it has serviced all of its financial commitments. As reported by Inside U.S. Trade: "The bank in its annual competitiveness report for fiscal year 2014 said its long-term financing can have repayment terms lasting longer than seven years; in FY 2014, the bank authorized $12.7 million in long-term financing."
The continued existence of the Ex-Im Bank was placed in jeopardy in September 2014, when Congress approved a continuing resolution to fund the federal government through December 11 of that year in order to avert a government shutdown. Rather than setting the expiration of the Ex-Im Bank's charter on December 11, 2014, along with funding for most of the rest of the government, or enacting a multi-year reauthorization of the Ex-Im Bank, opponents of the bank succeeded in having the bank's charter extended only until June 30, 2015.
This move separated reauthorization of the Ex-Im Bank prior to the expiration of its charter from must-pass funding legislation to prevent a government shutdown, and for that matter, from any must-pass legislation.
At the time the continuing resolution was approved last September, congressional supporters vowed to continue working toward a multi-year reauthorization of the Ex-Im Bank during the extension period. And they have.
On June 10, Senator Mark Kirk (R-IL) facilitated a 'test-vote' on renewing the Ex-Im Bank's charter. Sen. Kirk offered an amendment to the National Defense Authorization Act (NDAA), an amendment to reauthorize the bank. The Senate voted on a motion to table the amendment, which would have nullified it. A total of 65 senators voted against nullifying the amendment, demonstrating a filibuster-proof majority of support for reauthorizing the Ex-Im Bank in the Senate. The amendment was withdrawn from consideration because the NDAA was not considered a good vehicle for reauthorization of the Ex-Im Bank for a number of reasons.
Reports now indicate a surface transportation funding bill that would need to be passed prior to the expiration of the Highway Trust Fund on July 31, 2015 is the most likely vehicle for an amendment to reauthorize the Ex-Im Bank.
Significant developments with this important issue for AMO and the U.S. merchant fleet will be reported on AMO Currents and in American Maritime Officer.