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 The state has the most companies backed by the government's export
credit agency, and - paradoxically - is home to the bank's fiercest
congressional critics who want to let the institution die when its
charter expires at the end of June.
Representative Jeb Hensarling leads a contingent of fellow Texas
Republicans pressing hard for the shutdown of the bank, despite its
support for many large and small Texas businesses.
Arguing that "Ex-Im" embodies "crony capitalism" doled out by
Washington bureaucrats and that it puts taxpayer funds at risk to
guarantee foreign loans, many Republicans want to end the tradition
of renewing the 80-year-old bank's charter.
If Hensarling, the influential House Financial Services Committee
chairman, stands by his stated intention not to advance a bill to
reauthorize the bank, it will soon have to stop lending and writing
new trade insurance. The bank's only hope then would be legislation
in the Senate.
The bank's closure would be cheered by Republican fiscal hawks, but
be seen by many as a fresh blow to U.S. international economic clout
months after Washington failed to stop China from launching its own
Asian development bank.
 If the bank dies, China and 58 other industrial countries with
export credit agencies would gain a bigger share of major
international sales and projects, Ex-Im backers say.
Texas exporters, with a high concentration in oil and gas equipment
and engineering, say thousands of jobs are at risk. The bank lists
1,233 companies in Texas it has helped to export $22 billion worth
of U.S. goods and services, a dollar amount higher than anywhere
except Washington state, home of Boeing Co.
"We're all conservatives in our company, and our elected
representatives are working against us," said Jim Adams, managing
director of privately held Control Flow Inc, a Houston-based maker
and exporter of oil wellhead equipment.
Control Flow has exported $75 million worth of equipment, including
valves and blow-out preventers, backed by low-interest Ex-Im loans
and insurance in the past five years.
Without that support, Control Flow would have to slash prices and
accept lower profits to keep export business or cut its 160-strong
workforce, Adams said.
Texas lawmakers' opposition to the bank partly reflects the rising
power of the Tea Party and conservative groups in the state such as
the Club for Growth, which promotes a fiscal conservative agenda and
funnels money to such candidates.
Hensarling acknowledges there will be collateral damage as some
firms lose support, but says they would be better served by a
reformed tax code and reduced regulations.
"I hope to help these small businesses, maybe just not in the way
they wish to be helped,” he told Reuters during a break in an Ex-Im
hearing on Wednesday.
"There are better ways to do that without transferring credit risk
to the taxpayer balance sheet, which when last I looked, was an
unsustainable balance sheet.”
In the nine months since Ex-Im's charter was last extended, Texas
House Republicans opposed to renewing it have drowned out the
handful who support keeping the bank open with reforms, such as
House Rules Committee chairman Pete Sessions, who is allied with
House Republican leadership.
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By contrast, House Republicans from Missouri, where Boeing has a
major presence, have voiced strong support for the bank.
Like other Ex-Im opponents, many of the Texas Republicans say the
bank provides "corporate welfare" to Boeing and other huge
corporations, interferes in private finance and puts U.S. taxpayers
on the hook for foreign loans.
"Ex-Im Bank has exceeded its period of usefulness. Period," said
Republican Michael Burgess, a Dallas-Fort Worth area congressman.
TEA PARTY EFFECT
For Texas Republicans, supporting the Ex-Im Bank could invite a
primary challenge ahead of the November 2016 congressional
elections, said Mark Jones, a political science professor at Rice
University in Houston.
Ex-Im "has successfully been framed as being associated with crony
capitalism, and that's a dangerous place to be with Republican
primary voters in Texas," Jones added.
Support for economic "liberty" and small government runs deep in the
vast, largely Republican state. Republican primary election voters
are typically the most committed conservatives, exerting an outsize
influence on the state's politics.
"This is a red meat issue for the Tea Party," said Tony Bennett,
president of the Texas Association of Manufacturers.
Trying to explain to Texas conservative voters the role that Ex-Im
plays in promoting exports is an "impossibility," he said. "It's
ironic that we're the largest user of Ex-Im and the most vocal
opponents are from Texas."
Club for Growth ran ads in April in the Waco, Texas district of
Representative Bill Flores, urging him to abandon his prior support
for the bank. When he came out against Ex-Im last month, the group
ran ads praising him.
Air Tractor Inc, a maker of crop-dusting and fire-fighting aircraft,
would not be able to find replacement financing for the small Ex-Im
bank loans of $750,000 to $1 million that foreign customers use to
purchase its planes, said Tyler Schroeder, a financial analyst with
the firm.
These customers, largely in Brazil, would turn to a model made by
Brazil's Embraer SA that has less spraying capacity, he said. Air
Tractor would likely have to cut 65 to 70 of its 270 workers.
"At what point does the betterment of your constituents outweigh the
ideology of this?" Schroeder said.
(Editing by Kevin Drawbaugh and Stuart Grudgings)
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