Sen. Pat Toomey prides himself on being a "pro-trade" Republican who believes in "expanding American export opportunities and encouraging economic growth."
He's willing to fight for these beliefs, too, as evidenced by legislation he recently cosponsored to limit President Trump's authority to levy tariffs on national security grounds.
So, I am baffled by his continued antagonism towards the U.S. Export-Import Bank (EXIM), perhaps the most pro-trade agency in the entire federal government.
>>READ MORE: Will 'America First' make America last? | Opinion
Three years ago in July, a few senators—led by Sen. Toomey—began blocking efforts to confirm nominees for the board of EXIM, which provides critical financing for American companies selling goods and services abroad. Because the bank has lacked a board quorum since July 2015, it can't approve any transaction that's more than $10 million, costing U.S. companies large and small to forfeit sales to foreign competitors.
Although the senator recently suggested he was open to confirming Kimberly Reed to fill the long-vacant position of EXIM president, he said he would not lift his hold on the other EXIM board nominees. This means EXIM will have to continue sitting on the sidelines while other countries eat our lunch.
This self-inflicted wound on American workers can be healed if Sen. Toomey allows a vote on board confirmations to go forward.
I recently spoke to Steve Wilburn, CEO of California-based FirmGreen, who said the neutering of EXIM is "devastating" his business, employees, and suppliers. He pointed to a $400 million letter of intent FirmGreen signed with the Philippines to install 375 megawatts of solar power using patented American technology that lets utilities harvest energy while farmers harvest crops underneath the solar panels.
This project would have supported approximately 30 engineering, software development, and project management jobs at FirmGreen, and another 200-plus jobs at suppliers, including metal fabricators in southern California and suppliers in Ohio, Wisconsin, and Pennsylvania, among others. FirmGreen was planning to source as much as $60 million from Summit Steel, a Reading-based leader in alternative energy components.
But now the deal is dead.
The Philippines solar project—like most large capital projects around the world—required the exporter to line up government-backed export credit agency (ECA) financing. FirmGreen did, and Steve has the letters from EXIM to prove it, but without a board, EXIM could not finalize the transaction. At this point, the likely winner is a company from China or Korea, backed by their ECA.
FirmGreen is not an isolated case. Because EXIM is sidelined, El Al is outfitting its new fleet of Boeing planes with Rolls Royce engines made in the UK instead of GE engines from Ohio. A $2 billion Egyptian order for industrial equipment, which translates to at least 10,000 jobs, will be sourced in Canada and Europe, not the U.S., for the same reason. Many U.S. companies are losing contracts or being forced to source from abroad as we step aside, while country after country steps up to help their companies win deals we leave on the table. Today, there are nearly 100 ECAs around the world.
The Trump administration has not been shy in announcing its willingness to "fight" for U.S. workers in international trade. So I don't understand why they have not put more pressure on the Senate in general, and Sen. Toomey in particular, to empower EXIM, an agency that provides no subsidies or tax breaks and makes money for U.S. taxpayers, to join the fight. The administration's inaction is especially confusing when you consider that EXIM is expected to play a critical role in advancing the President's just-announced Indo-Pacific economic strategy, which aims to counter the rise of China. China happens to be the most aggressive provider of government export credit assistance in the world.
At the peak of EXIM's activity in 2012, the bank financed $35.8 billion in transactions, supporting thousands of small-business customers and 255,000 U.S. jobs. Last year, EXIM completed just $3.4 billion in transactions, less than 10 percent of what it did five years earlier. And more than $40 billion worth of export deals for U.S. businesses are currently being held up due to EXIM inaction.
Another consequence of Sen. Toomey and other opponents neglecting the bank is that they have turned a moneymaking agency—which generated $4 billion for taxpayers during the Obama administration—into a money loser, as the agency has always relied on the profits of large transactions to subsidize smaller ones.
Unlike tariffs—a blunt trade tool that supports some U.S. industries (steel makers) at the expense of others (Harley Davidson and auto makers)—EXIM financing just ensures U.S. companies operate on a level playing field to compete against foreign rivals. Even in EXIM's diminished state, it remains a crucial partner for American companies; it counts as customers 220 Pennsylvania companies that have exported $5 billion in goods and services since 2013.
Business leaders like Steve Wilburn are running out of patience. A disabled and decorated Marine veteran, Steve said other countries with functioning export credit agencies are "kicking our ass."
And we are just letting them do it.
There isn't much an individual senator can do to boost our economy. But Sen. Toomey has that rare opportunity. By merely lifting the holds he has on EXIM board nominees, he can deliver an immediate and positive boost for American and Pennsylvania companies and workers.
I hope he'll seize the opportunity.