So, this is the conservatives’ big idea about how to win the hearts and minds of Americans – killing the Ex-Im bank? Seriously? Let’s review:
1) The US Export-Import Bank is a moneymaker for the federal government. That’s right. Almost alone amongst government agencies, the bank takes in more money than it spends, netting $675 million last year.
2) The Ex-Im bank helps
3) Conservatives have fastened onto the fact that a big portion of Ex-Im financing goes to a small number of large corporations. Some three-quarters of all loans and loan guarantees were made to the top ten clients of Ex-Im. So what? Big companies like Boeing and GE employ millions of Americans, providing good jobs that pay more than the minimum wage. Those are the companies most often competing for huge projects and orders overseas – and who face off against well-financed rivals supported by their own governments.
4) The animus directed in recent years towards large companies ignores the fact that more than half (52 percent) of working Americans are employed by the largest category of company, those with more than 500 workers. These firms generally offer the best healthcare, retirement benefits and wages available to workers.
5) Small companies do benefit from the Ex-Im Bank. They are often the least capable of navigating the channels of international commerce, and securing financing for overseas trade. Though not the biggest clients for Ex-Im, small companies received some 3,300 loans in 2014. Testament to the need to help small businesses was provided by Senator David Vitter, who voted to kill Ex-Im, but then introduced legislation to allow the Small Business Administration to provide similar export financing help to small firms. Talk about a dog chasing its own tail!
6) Congress is alarmed that the loan book of Ex-Im has grown in recent years. A 2013 report from the Government Accounting Office warned that its systems for monitoring its loan exposure had lagged its growth, and recommended changes, which would make its loss estimates more reliable. However, the increase in Ex-Im loan volumes stemmed from the financial crisis, and reflected the drying up of private credit. In fact, that growth is an excellent argument for the existence of the bank, which helped many companies continue to export during the downturn.
The bottom line is this: if even one job is lost because of this foolishness – when the country’s top priority, and certainly the top priority of conservatives, should be putting Americans back to work – shame on those who engineered this defeat. Rather than shutter the bank, Congress should engage in practical ways to improve the bank’s oversight and performance. With so many other stupid programs to target (ethanol, the $25 billion spent annually on vacant federal buildings, the disability scams…), it is unimaginable that the Ex-Im Bank has become the conservatives’ line in the sand.
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