As former Republican members of the House who served during the 1990s, it is not often that we agree with former President Bill Clinton. On the re-authorization of the Export-Import Bank, however, the former president is absolutely right. Recently, Clinton urged reauthorization of the Export-Import Bank: “Whether you are Republicans, Democrats or Independents, I urge you to ask the Congress to reauthorize.”
President Clinton is spot on when he says that re-authorization of the bank will “help to create a stronger America.”
The truth is that our economy continues to struggle and that our national unemployment rate continues to be far too high. For too many in our country, the American dream is becoming harder to realize.
Republicans have rightfully said for years that the last thing we should do is raise taxes in the teeth of a recession. Republicans have also been leading the fight on regulatory reform because they understand the burden placed on businesses by unnecessary and overly complex bureaucratic red tape.
Republicans have fought against tax increases and for regulatory reform because they understand the importance of creating jobs — particularly in this fragile economy. It is for that reason that the Export-Import Bank should be re-authorized.
Last year alone, the Export-Import Bank supported more than $40 billion in export sales from American companies. These sales, from 3,600 companies, supported almost 300,000 jobs.
Lawmakers have a daunting task in front of them today — not only must they find ways to spur economic growth and create jobs, they must do so in the context of a looming, unprecedented fiscal crisis that is a result of deficit spending and mountains of federal debt. The good news is that the Export-Import Bank not only creates jobs, it does so without adding to the federal debt.
Unlike the failed “stimulus” spending, which cost taxpayers trillions of dollars, the cost to the American taxpayers for the Export-Import Bank’s job creation is nothing. The bank generates enough fees to offset its costs and actually contributes the remaining surpluses to the United States Treasury. Indeed, over the last five years, the bank has returned $3.4 billion to the United States Treasury.
The Export-Import Bank has been an important tool for global competitiveness, especially for small businesses. Small businesses are the engines that drive job creation in the American economy, and more than 85% of the Export-Import Bank’s transactions directly support small businesses.
The Export-Import Bank does not compete with private lenders. Instead the bank is a “lender of last resort.” The bank helps to level the playing field for U.S. exporters by matching the financing that other governments provide to their exporters. The Export-Import Bank also fills important gaps in trade financing by assuming credit risks and country risks that other private sector actors are unable or unwilling to do. It has done so with amazing success — supporting more than $456 billion of United States exports over the last 77 years.
The Export-Import Bank’s charter expired in 2011 and it is currently operating on an extension that is set to expire on May 31st of this year.
On Friday night, a compromise was reached in the House. Under the bipartisan agreement, the Export-Import Bank’s charter will be extended through September 2014 and its loan exposure cap will be raised 40 percent to $140 billion.
The bank will be required to keep default rates below 2 percent. Additionally, the Treasury Department will be required to initiate talks with U.S. trading partners toward “substantially reducing” and ultimately ending the practice of export financing subsidies.
Despite the bipartisan agreement, some are still opposed to re-authorization.
Opponents of re-authorization have called the Export-Import Bank “corporate welfare.” While such accusations may make for good talk radio fodder, they do not represent the reality of the long and successful history of the Export-Import Bank. The bank has a 77-year track record of making investments in American companies that have created millions of jobs.
Failure to re-authorize the bank has rightfully been compared to “unilateral surrender” — American companies and manufacturers will immediately be placed at a strategic disadvantage in the global marketplace.
Re-authorization should be passed with wide bipartisan majorities — indeed, when we were in Congress that is exactly what happened. The American people want their representatives in Washington to get this economy moving again, they want to see economic growth that creates much-needed jobs. Members on both sides of the aisle should have job creation as their number one priority and re-authorizing the Export-Import Bank is an important part of any job creation effort.
Amory F. Houghton is a former Republican congressman from New York and the chairman of the board of the Republican Main Street Partnership. Tom Davis is a former Republican congressman from Virginia and the president and CEO of the Republican Main Street Partnership.