Once Congress is through with its latest game of chicken, which threatens to shut down the Department of Homeland Security tonight, it can move on to another episode of brinkmanship as the June 30 deadline approaches to reauthorize the federal Export-Import Bank.
The Export-Import Bank, in operation for 80 years, provides loans, loan guarantees and insurance that promotes exports to other countries from small, medium and large businesses in the United States. In Washington, Boeing and Chateau Ste. Michelle wines in Woodinville are among the better known companies benefitting from the bank’s services, but a number of small- and medium-sized business in Snohomish County have relied on the Ex-Im Bank’s assistance, including Outback Power Technologies in Arlington, Cobalt Enterprises in Granite Falls, Fluke Corp. in Everett, Vista Clara in Mukilteo and Connelly Skis in Lynnwood. Between 2007 and this year, the Ex-Im Bank supported more than $130 billion in exports from 227 Washington businesses.
Reauthorization of the bank raised little debate until recent years, as the bank has come under fire from tea party Republicans, including the current House Financial Services Committee Chairman Jeb Hensarling, R-Texas, who has sought to kill the bank outright. Congress faced the same reauthorization battle three years ago until Sen. Maria Cantwell and Rep. Rick Larsen crafted a bill that won bipartisan support to continue the bank’s work until this year.
Opponents, standing on small-government ground, say the bank’s services could be offered by the private sector, but the bank exists because the banking industry hasn’t been willing to take on the risk often involved in arranging the financing in foreign countries, such as India and Indonesia, which are among the emerging economies that our businesses, from Outback Power to Boeing, want to do business with.
Nor can opponents win on a claim of cost to the taxpayer. The Export-Import Bank is self-supported and, according to a Bloomberg News report in December, regularly returns a profit to the U.S. Treasury, more than $3.4 billion since 2005.
Larsen and the rest of the state’s House Democrats co-sponsored a bill this week, HR 1031, to reauthorize the Export-Import Bank for seven years and raise its current lending cap of $140 billion by $5 billion every two years, up to $160 billion. A Senate version of the reauthorization, seeking to find a compromise with enough Republicans, would give the bank five years and cut its lending cap to $135 billion. A longer term and larger cap would have the potential to benefit more businesses, but saving the bank through compromise, if Congress can find that in its heart, is more important.
This comes at a crucial time. On Congress’ to-do list is fast-track trade authority as negotiations continue on the Trans-Pacific Partnership trade agreement with 11 other Pacific Rim nations. Although there is a tentative labor agreement for West Coast ports, the slowdowns and port closures during negotiations hampered the ability of businesses to ship goods and reflected poorly on the reliability of the ports.
The quicker Congress can act on the Export-Import Bank and on trade authority, the quicker Washington state, among the nation’s leading exporters, and the rest of the U.S. can get on with business.