It might only be temporary, but Congress’ failure to reauthorize the charter of the federal Export-Import Bank by yesterday’s deadline offers an alarming look at the potential effect of its absence.
The federal export credit agency, frequently shortened to Ex-Im Bank, encourages exports and the jobs they support by guaranteeing loans for foreign buyers that are looking to purchase American-made goods. For Washington state, that’s meant products made by companies as small as Cobalt Enterprises in Granite Falls on up to Boeing and other global giants.
The industries that depend most on the bank directly employ about 80,000 people in Washington state, most of those, of course, in commercial airplanes and other aerospace work, according to IBISWorld, a business information consultant. Aircraft exports, such as the Everett-built Boeing 787 and 777, account for more than half of our state’s total exports. But it’s not just Boeing that the bank assists. More than 70 percent of the Washington state companies that have benefited from the bank’s guarantee program in the past five years are small- and medium-sized businesses, reports the Washington Council on International Trade.
Unless its charter is renewed — something previous Congresses have done repeatedly and rarely with much disagreement over the program’s 80-year history — Washington state is at the greatest risk to lose business and exports, an IBISWorld report said.
It doesn’t have to be so. The Washington state Congressional delegation is unanimous in its support of the bank’s programs. Second Congressional District Rep. Rick Larsen, D-Wash., in February co-sponsored legislation that would have renewed the bank’s charter and gradually increased its annual lending cap from $140 billion up to $160 billion. There are majorities in House and Senate in support of the bank, with enough Republicans willing to join the Democrats who generally back it.
Sen. Maria Cantwell, D-Wash., was in Spokane on Tuesday, visiting a manufacturer of grain silos that has relied on the loan program. Everyday that the bank is shuttered represents another day where a sale could be lost to a manufacturer in another country, she said. Without the Export-Import Bank, the U.S. will be the only industrialized nation in the world without a finance program to promote exports, and those nations’ companies are ready to fill the void, Cantwell said.
The bank is opposed chiefly by tea party Republicans, most famously U.S. Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee, who has criticized the bank as corporate welfare, though we are unaware of any other excesses of corporate welfare that Hensarling has opposed.
The charge doesn’t fly. The Export-Import Bank doesn’t compete with the private sector, which has either been unwilling or unable to offer the same loan guarantees. Nor has the bank cost the taxpayer. It is self-supporting and in the past 20 years has brought in more than $7 billion to the U.S. Treasury to help reduce the federal deficit. And its loans don’t represent even a moderate risk of default. The loans it guarantees have a default rate as of last year of less than one-fifth of 1 percent.
Cantwell said she’s not opposed, when Congress returns from the Independence Day break, to see the bill attached to other legislation to ease its passage. But noting the majorities of more than 250 in the House and 67 in the Senate who support it, the legislation has more than enough votes to pass on its own. It is Republican leadership in both chambers that have dragged this out.
Workers from Cobalt to Boeing can ask why this drama, delay and potential for lost business were necessary.