Banking on exports
OUR OPINION: The Export-Import Bank creates jobs; Congress should renew its charter
06/28/2014 7:00 PM
06/29/2014 7:16 PM
Given the multitude of problems facing the United States, it’s appalling to see prominent members of Congress focusing on the U.S. Export-Import Bank as a target of opportunity. Why has a useful government agency that works exactly as intended suddenly become a political football?
Relatively few Americans have heard of the Ex-Im Bank, or its purpose, but ever since its creation under Franklin Roosevelt the agency has been a critical force behind the success of American businesses competing in overseas markets.
Its role is twofold. It provides export credit insurance so that U.S. companies selling made-in-America goods abroad have protection against the risks of doing business overseas. And it provides financing for foreign buyers purchasing American-made goods. For obvious reasons, this is not a role that private banks are eager to play. The risks are deemed too great for a private institution, whereas a government agency has the clout and the means to act overseas.
Its services are not free. The agency charges fees and interest, like any other bank — and regularly produces an annual profit. Last year, it helped reduce the U.S. deficit by $1 billion.
So why in the world would incoming House Majority Leader Kevin McCarthy, R-Calif., and other like-minded Republicans zero in on the Ex-Im Bank for extinction? The short answer is that they see it as an enabler of “crony capitalism,” helping big businesses like Boeing, Caterpillar and GE that should not have to rely on the full faith and credit of the U.S. government to make a profit.
That, at best, is a weak argument. Yes, major American businesses get help from the U.S. government, but their foreign competitors get help from their own countries. Governments, from Russia to China to European countries, actively support domestic business interests in the same fashion, often with greater financing than the U.S. government offers.
Nor is the bank limited to dealing with the biggest businesses, as critics charge. According to bank figures, 90 percent of its transactions benefit small businesses.
Then, too, there is the argument that the Ex-Im Bank does not so much create jobs as help to allocate them, that it chooses “winners and losers” in deciding where to lend assistance.
Tell that to the more than 200,000-plus American workers who owed their jobs to bank-supported exports in the last fiscal year — many of them in Florida. This state is home to 58,000 exporters, according to the Ex-Im Bank, the second-highest number in the country.
The bank backed an estimated $37.4 billion in U.S. export sales in fiscal 2013 — including $7 billion in Florida. According to figures provided by U.S. Rep. Joe Garcia, D-Miami, that includes more than $1.5 billion in South Florida, where international trade plays a vital role in the economy. How many of these jobs would vanish if the Ex-Im Bank were not around?
In short, the bank promotes American business, protects jobs, enables U.S.-made goods to compete overseas — and makes a profit for taxpayers in the process. Congress has a problem with that?
The agency’s charter expires on Sept. 30. Destroying the Ex-Im Bank would amount to a form of unilateral disarmament in the contest over international trade. Surely lawmakers can stop their incessant feuding and ideological warfare long enough to renew its authority to stay in business before any American jobs are lost.
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