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June 26, 2014 at 6:50 AM

Why Washington state — and Cathy McMorris Rodgers — play a pivotal role in Ex-Im debate

U.S. Rep. Cathy McMorris Rodgers, R-Wash.

U.S. Rep. Cathy McMorris Rodgers, R-Wash.

Few Spokane firms have been around longer than Commercial Creamery, in business since 1908, a manufacturer of food ingredients with worldwide sales. It lost business in the Middle East after the invasion of Iraq but found a new market for its powdered cheese in the Philippines and Indonesia. The company covered the invoices with insurance from the federal Export-Import Bank.

All in all, not really the most exciting of transactions. Which is why company President Michael Gilmartin marvels at the current firestorm in Congress over the bank’s reauthorization, fast becoming the debate of the season. Unless a bill passes the obscure 80-year-old institution will die Oct. 1. Gilmartin says there’s something entertaining about an argument in which Democrats are lining up for an enterprise that supports business and Republicans are lining up against it. “But I’d rather see them work on something that everyone agrees is a problem, like the Internal Revenue Service.”

Unlike most issues that consume Congress this one seems to have a clear Washington state focus: Boeing is the biggest customer for the bank’s export loans, credit insurance and loan guarantees. Washington Democrat Denny Heck is sponsoring the bill for the bank’s reauthorization, and 11 out of 12 members of the state’s congressional delegation have declared their support. Yet the one member who hasn’t made up her mind could play the most pivotal role of all. That’s Gilmartin’s congresswoman, Cathy McMorris Rodgers, and that makes Spokane and the 5th Congressional District ground zero for the debate.

Rodgers has become the focus of a concerted business-driven campaign for the bank’s survival. As chairwoman of the House Republican Conference, she is the fourth-highest-ranking member in the House Republican majority caucus. Business is looking to her to help lead Republicans in support of the bank, as a conservative faction takes aim for what appear to be philosophical reasons, as new Minority Leader Kevin McCarthy, R-Calif., says he is willing to let the bank die, and as House Speaker John Boehner appears to waver. Rodgers would do well to listen to the business voices from her district.

The bank’s opponents say it provides a service the private sector could perform just as well, yet commercial banks and insurers have not been eager for the trade. The American program operates without cost to the taxpayer. Spokane’s business community hopes to convince McMorris Rodgers that she could play a particularly important role. “We’re going to be working really hard this week,” says Sandra Jarrard, public policy director for Greater Spokane Inc.

McMorris Rodgers, who voted for the bank during the last reauthorization debate in 2012, today speaks with caution. “I understand how important exports are to thousands of jobs in Washington state, but it is also my responsibility to make sure taxpayer dollars are protected,” she offered in a statement Wednesday. “I think we need to look at serious reforms to the Export-Import Bank as part of any reauthorization, including safeguards to increase transparency, ensuring loans and guarantees are going to those intended, and eliminating corruption.”

All well and good – except that it isn’t clear what needs to be safeguarded, what isn’t transparent, whether money is going to the wrong place or that systemic corruption is a problem. But at least it isn’t a no.

Gilmartin offers a voice from the real world. His company was one of the largest beneficiaries of Ex-Im services in the 5th District over the last six years, one of 15 that found support for $63 million in exports. Credit insurance simply wasn’t available commercially, he says, and it allowed the company to enter the South Pacific market aggressively. Gilmartin notes that the $10 million in coverage represented .00004 percent of the bank’s business, but if some fret about the bank’s support for big firms like Boeing, he has trouble seeing the problem. Boeing suppliers are located throughout the state. “It sounds like jobs to me.”

The list of businesses that have benefited includes some of the most iconic in the 5th Congressional District. Among them are Schweitzer Engineering Laboratories in Pullman and White’s Boots, the renowned Spokane-based manufacturer of custom leather workboots.

It is a demonstration of the growing importance of international trade, up fivefold since 1980, says Washington’s Heck. It’s not just for big corporations anymore. Every country in the developed world offers a similar export-assistance program, he notes – “if we want our markets to remain healthy we need to be able to sell into theirs.” Heck launched the final phase of the battle Tuesday as he introduced a bill to reauthorize the bank; immediately he picked up 200 Democratic cosponsors. Some 41 House Republicans signed a letter Monday expressing support, including Washington’s other three GOP members. That’s a majority – meaning easy passage if someone in Republican leadership exhibits leadership.



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