Tea party threatens agency that helps small businesses

MICHAEL HINKELMAN / DAILY NEWS STAFF Cousins Michael Strange (right) and Roger Bassett, oversee Bassetts Ice Cream. Strange says the U.S. Export-Import Bank has been helpful for the business when selling goods abroad.
MICHAEL HINKELMAN / DAILY NEWS STAFF Cousins Michael Strange (right) and Roger Bassett, oversee Bassetts Ice Cream. Strange says the U.S. Export-Import Bank has been helpful for the business when selling goods abroad.
Posted: July 22, 2014

AS LAWMAKERS in Washington haggle over the future of the U.S. Export-Import Bank, Michael Strange has no doubts about where he stands.

Strange is owner and president of Bassetts Ice Cream, which has about 25 employees at its Center City headquarters. Exports, mostly to China, account for 20 percent of Bassetts' annual revenue.

Ex-Im is an obscure federal agency that helps American businesses, mostly small, sell goods abroad. But some lawmakers - primarily tea party Republicans in the House - want to close down Ex-Im when its authorization ends Sept. 30.

Their beef? The bank is a symbol of corporate welfare.

Strange finds it all, well, strange. "It's hard for me to understand the politics behind that argument," he said.

Bassetts has worked with Ex-Im since 2008 and relies on Ex-Im's credit insurance, for which it pays premiums. That allows Bassetts to extend credit to overseas customers. If they don't pay, Bassetts can be reimbursed through Ex-Im.

Ex-Im also provides loans and loan guarantees to foreign firms to help them buy U.S. products.

Since 2009, Ex-Im says, it has earned $2 billion more than the cost of its operations after covering loan-loss reserves, and its default rate was less than one-quarter of 1 percent.

I call that effective risk management.

"In the big scheme of things, there are so many black holes where taxpayer dollars disappear to no visible benefit," Strange said. "But when you talk about a program that actually returns funds to the Treasury, it's kind of a no-brainer."

Well, at least you'd think it would be a no-brainer.

With nearly 60 other export-credit agencies around the world trying to win jobs for their own countries, Ex-Im levels the playing field for U.S. exporters.

In Bassetts' case, at least two full-time jobs here are directly attributable to Ex-Im, and Strange says other jobs are indirectly created in the supply chain. (Bassetts outsources ice cream production to three domestic firms.)

Ex-Im said it has supported 1.2 million private-sector jobs since 2009. About 100 companies in southeastern Pennsylvania have worked with Ex-Im.

Democrats almost uniformly support the bank. Last month, 42 House Republicans - including Philly-area Reps. Charlie Dent, Patrick Meehan and Jim Gerlach - sent a letter asking Speaker John Boehner and Majority Leader Kevin McCarthy to "expedite consideration" of Ex-Im reauthorization to help job creators in their districts.

Ex-Im used to be so uncontroversial that it often was reauthorized by voice vote in the House and Senate.

"I've got to believe that common sense is going to prevail here," Strange said.


On Twitter: @MHinkelman

Online: ph.ly/YourBusiness

 

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