WASHINGTON-Outgoing Overseas Private Investment Corp. President Ruth Harkin last week picked up bipartisan support from a congressional panel that is under pressure from some lawmakers to cut off the agency’s funding.
“Without OPIC, American companies would be at a severe disadvantage,” said Harkin in testimony before the House subcommittee on International Economic Policy and Trade.
OPIC, which provides long-term political risk insurance and financing for wireless projects in Russia and other emerging world markets, is one of the government programs on a “hit list” assembled by a politically diverse coalition led by House Budget Committee Chairman John Kasich (R-Ohio) and consumer advocate Ralph Nader. Opponents say OPIC is corporate welfare.
Last September, the House voted to de-fund OPIC. The agency’s current authorization expires on Sept. 30.
Harkin requested a three-year reauthorization for OPIC, and as an apparent sweetener, offered to operate on a self-funding basis.
OPIC counters the corporate welfare charge by saying that during the last four years, it has supported $50 billion in new investment overseas, created 65,000 American jobs, earned a profit during that time of $725 million. Since 1971, OPIC said it has received $1.2 billion in client fees.
President Clinton’s budget anticipates that OPIC will generate $158 million in fiscal 1998.
“We are making money on this deal,” said Rep. Sam Gejdenson (D-Conn.), ranking minority member of the panel. Gejdenson, though, acknowledged the battle over OPIC is like a religious war.
Harkin said American companies would lose business to foreign competitors in some regions of the world without OPIC support. She noted that other countries offer OPIC-like services to their firms.
There is some commercial political risk insurance available, but none with the 20- year policies offered by OPIC.
Harkin got vocal support from both Democrats and Republicans on the panel, with a couple of exceptions.
Rep. Steve Chabot (R-Ohio) said he believes OPIC is corporate welfare and that government is far too involved in free markets. “I think government ought to get out of the way.”
Rep. Lindsey Graham (R-S.C.) said his opposition to tax-payer funding of OPIC was not a criticism of OPIC but rather “just philosophically driven.”
“This is a critical issue, which warrants much attention and careful evaluation,” said Ileana Ros-Lehtinen, chairwoman of the subcommittee.
Harkin leaves the end of this month, but has not announced future plans. The administration is expected to name a replacement soon.
