WASHINGTON (Reuters) - For U.S. Export-Import Bank Chairman Fred Hochberg, there's a bright spot in the grueling battle with conservative Republicans that idled the institution for more than five months: EXIM is no longer an obscure government agency that few understand.
A five-month lapse in EXIM's charter cost U.S. exporters hundreds of millions of dollars in contracts and thousands of lost jobs, but underscored its importance as a tool in the fierce battle for global trade, Hochberg told Reuters.
"It's been an ordeal," he said in an interview on Thursday, a week after Congress voted to renew the bank's charter.
"The positive news is, a lot more people understand the bank. A lot more businesses understand the bank."
EXIM was a small, sleepy agency when President Barack Obama named Hochberg to run it in 2009, helping to finance and insure U.S. exports for companies such as Boeing
, General Electric and smaller firms.The Depression-era agency routinely sailed through its charter renewals, as recently as 2006 on voice votes.But free-market ideologues in Congress began targeting it in 2012 as a source of "crony capitalism" and "corporate welfare". After several failed attempts, they successfully blocked a renewal of its charter in June, preventing it from writing new loans, loan guarantees and insurance.In the interim, Boeing and Orbital Sciences announced the loss of three satellite deals due to lack of financing.GE said it would move production of some gas turbines to France and large piston engines to Canada to secure export financing from those countries.With EXIM partially back in business after a rare House of Representatives procedural maneuver forced a renewal vote, Hochberg said he is now concentrating on repairing damaged ties to small businesses that lost trade insurance policies.Winning back their trust is crucial to meeting a new mandate to boost the small business share of EXIM's annual loans, loan guarantees and trade insurance to 25 percent of the total from 20 percent previously."The target of 25 percent for small businesses is a tall order ... because we have to give the confidence back to businesses that we're really there for them," Hochberg said.The trade bank cannot make loans larger than $10 billion until a nominee for at least one of three vacant board seats is approved by the Senate. That largely shuts it out of the larger deals is best known for: Boeing aircraft, GE power plants and other large infrastructure projects.Hochberg, who ran his mother's Lillian Vernon catalog company, served as a Small Business Administration manager in the Clinton administration before a stint as a business college dean. He was largely silent during EXIM's hiatus this year, saying he preferred to let U.S. companies tell the story.The conservative attack on EXIM was led chiefly by Texas Representative Jeb Hensarling and a handful of other conservatives in the House of Representatives, along with a coalition of outside conservative political groups backed by billionaire industrialists Charles and David Koch.Among several criticisms, the bank's opponents accused it of unneeded interference in the market for export financing.Hochberg replied, "That's not the world we live in. It is just not reality," reiterating EXIM's position that government export finance is ubiquitous worldwide and a U.S. move to drop it only handicaps U.S. companies large and small. Hochberg said he is looking at what the bank can do to reduce the chance of another reauthorization crisis in less than four years when its charter expires again in September 2019. This means "doing our jobs" and implementing reforms in the revised charter, including improvements to risk management."This was a lapse, it did damage and we're going to be working very diligently that we're going to make the bank stronger. We've heard the arguments that our critics and opponents lodged and we're going to respond to them," he said. (Editing by Kevin Drawbaugh and Andrew Hay)
