Why we need to renew the Ex-Im Bank
Trivializing the Export-Import Bank by calling it “corporate welfare,” as our friends on the fringe suggest, represents an attempt to conjure up images of other programs that will generate a negative knee-jerk response from a select segment of the public.
A few facts about Ex-Im would be helpful to begin this discussion. The bank supported over $27.5 billion in exports, and over 160,000 jobs in 2014, which includes $10.7 billion of small business exports. It has returned profit of nearly $7 billion to the Treasury, which helped to reduce the federal deficit over the last seven years. The bank is funded by borrowing, albeit at government rates, and provides loans, loan guarantees, working capital guarantees and loan insurance. The bank has a default rate of less than one-fifth of 1 percent as of September 2014.
{mosads}Virtually every other country that is a major exporter has the equivalent of the Ex-Im Bank, created to support exports by that country’s businesses, and to keep each of those country’s businesses competitive with the rest of the world.
There has been no objection voiced from the commercial banking world, whether money center banks or community banks, and if the bank were a threat or a competitor, clearly those institutions would be crying out for its nonrenewal. It has been reported that the American Action Forum — whose president, Douglas Holtz-Eakin, is a former George W. Bush economic adviser and director of the Congressional Budget Office — has stated clearly that after analyzing the work of the bank, America is better off with the bank than without it. The bank has historically received bipartisan support, including from Presidents Clinton and George H.W. Bush, as well as from President Reagan, who was quoted as saying in January 1984 that “The Export-Import Bank contributes in a significant way to nation’s export sales.” Has the world changed so dramatically that the Republican icon, Ronald Reagan, is ignored by his own party?
The business community, whether large or small, has urged, as I do, that the bank be renewed — minimally for five years, in my view. If there was a real dispute as to the level of support given to business by the bank, of risks to the Treasury, then a business analysis should be presented to support those purported threats, including the likelihood of their coming to fruition. Delta Airlines has been a major antagonist, and has helped create an ideological litmus test for those who lack the analytical sophistication to determine whether or not the bank is a good or bad deal for the American public. Where is the analysis from those who oppose the bank? There is no analysis provided, because no analysis to support such a position exists.
In my former congressional district, New York’s 21st, the Export-Import Bank supported $49 million in exports. New York state finds the use of an Export-Import Bank so important that Gov. Andrew Cuomo (D) has proposed a state Export-Import Bank.
If our economy is going to grow, then we need increase our exports, and if our businesses are going to export, then they are likely going to need support. There is no better vehicle for accomplishing that than the bank.
So why do a few agitators, who have no practical understanding of the competitive global environment in which we live, urge that we not renew the bank? The unfortunate answer is that it is politically expedient.
Any member of Congress can access on the Export-Import Bank website information about the impact on his or her respective state at www.exim.gov. I would urge them to do so before deciding to vote “no” on this renewal.
While we are on the topic of exports, the recent efforts by the president to spur support for trade promotion authority (TPA) have been met with great difficulty. There has been an abject failure on the part of the administration to understand what really concerns members of Congress. During my term in office, I met with the U.S. trade representative and/or his representatives at least 10 times, and in each situation, I indicated that providing a macroeconomic view of free trade doesn’t work. The issue for labor unions, the general public and for members of Congress is the perceived loss of jobs in their communities. The visit to Nike was the first time that there was a line drawn between free trade and increased jobs. The failure to grasp that concept, even with polls indicating widespread public support, is something I simply cannot fathom.
Owens represented New York’s North Country from 2009 until retiring from the House in 2015. He is now a senior strategic adviser in the Washington office of McKenna, Long and Aldridge and a partner in the Plattsburgh, N.Y. firm of Stafford, Owens, Piller, Murnane, Kelleher & Trombley, PLLC.