Ex-Im Bank must have its life span extended
The hotly contested Export-Import Bank of the United States has been in existence since 1934 by executive order, was made a separate agency by Congress in 1945 and exists to finance and insure foreign purchases of American goods for customers unable or unwilling to accept credit risk.
This seemingly sleepy entity has been in the news lately due to its upcoming potential death. Its most recent three-year charter lapsed as of July 1 because of Congress’ inaction and unwillingness to reauthorize. Today, the bank cannot engage in new business and can only manage its existing loan and business portfolio.
The Ex-Im Bank has been a dividing political issue since its conception. Created to help the U.S. increase exports and create more jobs here, it has been hugely successful in those objectives.
The Ex-Im Bank currently helps 129 Oklahoma companies with global exports of nearly $1 billion in total export value, $938 million in total insured shipments, guaranteed credits or disbursed loan amounts and $815 million in total authorizations. This enormous economic infusion has created thousands of Oklahoma jobs creating products, machines and services.
The U.S. Import-Export Bank, like most Ex-Im banks around the world, focuses in financing private-sector exports and has helped create or maintain many thousands of jobs all across America. Its recent years have seen more focus toward energy and manufacturing products, thus creating a growing political divide in Washington along the way.
Today, those most concerned about the potential death of the bank have been the alternative energy sectors, which have used the bank more recently to finance some of their green energy ventures. Yet just a few years ago, the bank was heavily criticized for “being on a fossil-fuel binge” for supporting liquid gas projects for Exxon-Mobil in Papua New Guinea and a coal plant in India with ties to Wisconsin business interests.
Meanwhile, growing antagonism today about the bank seems to be coming from lobbyists in the fossil-fuel sector and conservative groups representing American banks that don’t want the competition for lending.
And to stray away from any specific sector of the U.S. economy to the larger picture, it is clear what the importance of the Ex-Im Bank is to the U.S. economy. The future of American exports and job creation seems bleak without the institution because this is the U.S. Ex-Im Bank, while many other countries have their own banks that finance exports and they have bidding wars in highly contested export markets.
What this means is that if the U.S. Ex-Im bank did truly die on June 30, the U.S. export market is likely to shrink exponentially without financing. This loss of financing may hurt small businesses worse, those who rely on the bank for their overseas transactions. In fact, significant percentages of the bank’s finances go to small businesses with 164,000 jobs created in 2014 alone. So the facts are pretty clear that without the U.S. Export-Import Bank American businesses and jobs are at stake. Surely Congress must understand that?
It is critical that our country support the U.S. Ex-Im bank for its importance to American businesses, both large and small, in places like Oklahoma and beyond.
We cannot let party politics affect our financial future negatively. If U.S. industry wants a better future for markets overseas, the U.S. Ex-Im Bank must have its life span extended.
And oh by the way, the best part is that it won’t cost taxpayers a thing. When do we ever get that good of a trade?