Congress did a huge disservice to both employers and workers across the country — particularly in export markets like South Florida — when it let the Export-Import Bank expire at the end of June. Lawmakers should make it a priority to reauthorize the bank when they return to work this week after the Independence Day break.
The Ex-Im Bank has a proven record of value and performance in helping to finance businesses that sell in markets overseas and create new jobs. Many of them offer high-paying jobs located here in South Florida.
The bank has a two-fold objective: To provide export credit insurance so that U.S. companies selling made-in-America goods abroad have protection against the risks of doing business overseas, and to offer financing for foreign buyers purchasing American-made goods.
The risks are deemed too great for a private institution, whereas a government agency has the clout to get the job done. Virtually every major exporting country in the world has a counterpart of the Ex-Im Bank. So why shouldn’t the U.S. government help American companies compete overseas against businesses backed by their own governments?
Few states have benefited as much as Florida from the Ex-Im Bank’s financing. The state is home to some 58,000 exporters, 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. That includes more than $1.5 billion in South Florida, where international commerce plays a vital role in the economy. Last year, it supported $27 billion in exports. How many jobs would vanish if the Ex-Im Bank were not around?
And, by the way, the U.S. Treasury receives a direct benefit from the bank that few other government agencies can match. In the last fiscal year, it reduced the deficit by $675 million from the fees and interest it received. The previous year, it was more than $1 billion.
The myth spread by the bank’s critics — ideological opponents of government-backed credit supports — is that the bank abets corporate welfare, designed to help multinational giants with powerful lobbyists. The figures say otherwise.
Nearly 1,000 Florida businesses have received Export-Import Bank support since 2007. Many are small- or medium-sized enterprises located in South Florida, like DemeTECH Corporation, which began by making surgical sutures and blades. CEO Luis Arguello told the Herald in a letter to the editor that it now exports its products to more than 100 countries, thanks in large measure to Ex-Im Bank financing. He said that 90 percent of the company’s sales come from these exports.
Businesses supported by the government bank provide employment in Florida for more than 50,000 workers, according to the bank’s figures. Even Gov. Rick Scott, no admirer of big government, sent Congress a letter last year urging reauthorization.
The failure to extend the charter of the 81-year-old bank sent it into bureaucratic limbo at the end of June. It can still service the $112 billion in financing already committed, but is prevented from authorizing new loans or guarantees.
The good news is that there’s support in both the House and Senate to revive the bank, if the measure can be brought to the floor. Given the bank’s importance, Congress should make it happen. The jobs supported by Ex-Im Bank financing should not be regarded as expendable.