Two months from now, the U.S. Congress may shutter a government agency that, in the past six years, has supported more than 1.3 million American jobs and generated more than $2 billion in deficit-reducing profits. The Export-Import Bank of the United States empowers American exporters by equipping those that cannot access private financing with credit insurance and working capital, among other tools.
For more than 80 years, the bank has operated largely without controversy. With overwhelming bipartisan majorities, Congress has reauthorized the bank 16 times. But last September, with its congressional authorization set to expire, the bank found itself the subject of fierce ideological debate. Ignoring the bank’s long record of supporting jobs, safeguarding taxpayer dollars, and maintaining a low default rate, a small minority of conservative Republicans began expressing opposition to the bank on ideological grounds. The U.S. government, they argued, has no role to play in global finance and should not interfere in the export sector in ways that might give some companies an advantage over others. Of course, this argument ignores the fact that government-backed export financing does not pick winners and losers—on the contrary, it is entirely demand-driven. Despite such criticism, and thanks to a broad bipartisan coalition, the bank was granted a nine-month reprieve in September. If some in Congress have their way, this may well be its last stand.
Opponents of the bank hold views of the world economy that do not reflect the reality of global competition. If Congress opts to eliminate or curtail the bank, the United States will find itself going dangerously against the grain. In the past two decades, the nature of export competition has fundamentally changed: as an increasing number of countries operate with little regard for established international guidelines, export competition has come to resemble the Wild West. To keep up with countries, such as China, that are willing to shell out
Loading, please wait...