US Congress allows Export-Import Bank of the United States to lapse for first time in history on July 1
Washington DC: Despite the strong bipartisan support for reauthorization, the Republican-controlled Congress has gone into recess without holding a meaningful vote on Export-Import Bank, allowing Ex-Im to lapse on July 1 for the first time in history—after 16 reauthorizations,
A fact-sheet brought out by the White House office of the Press Secretary underscores the point about the Republican-controlled Congress going into recess without a vote on Ex-Im and goes on to state that after 81 years of continuous operation, and a record of supporting a level playing field for American businesses and American workers, “a vocal minority in Washington is putting ideology ahead of American workers. That puts real American jobs at risk—at businesses small and large—and harms our global leadership. Businesses ready to make a sale abroad will not be able to get the new financing they need to close the deal. Workers—ready to produce the Made-In-America goods to meet that sale—will have to stand idle, take fewer hours and a pay cut, or lose their jobs.”
Detailing the role of Ex-Im, the fact-sheet says that it supported $27.5 billion in exports through more than 3,700 transactions—an average of roughly $2.3 billion and 300 transactions each month. While the Bank will continue to service existing loans, guarantees, and insurance policies, with Ex-Im unable to offer new financing starting on July 1, American businesses and workers would be missing new opportunities right away.
Competitors will fill the void left by Ex-Im’s expiration
When Ex-Im lapses, the White House fact-sheet points out, China and other foreign rivals will pick up the slack, putting American businesses and American workers at a disadvantage. In fact, a senior official from one of China’s versions of the Export-Import Bank told reporters recently that Ex-Im going away would be “a good thing” for China.
The fact-sheet goes on to add:
“There are 85 export credit agencies like Ex-Im in nearly 60 countries around the world fighting for sales and export-backed jobs—and starting on July 1, none of them will be in the United States. All American small business owners and workers are asking for is a level playing field. When U.S. exporters go into global markets armed with financing from Ex-Im, they have an opportunity to compete on their merits; when they do, they win. When they don’t, they have to fight an uphill battle. Now is not the time to pull the rug out from under them.
Nearly every developed country and all the major emerging economies have an export credit agency. And while the majority of global official export credit agency activity remained flat in 2014, China’s grew by over 40 percent. Ex-Im estimates that Chinese institutions supported roughly $58 billion in “standard” export credits in 2014—exceeding the medium- and long- term support from all of the G-7 countries combined (a total of $50.9 billion in 2014).
Businesses and workers in every State stand to lose from Ex-Im expiration
Over the last six years, Ex-Im has supported a total of $235 billion of exports from more than 7,500 businesses—about 5,000 of whom, or two-thirds, are small businesses. As the tables below show, businesses and workers in every state benefit from the support of Ex-Im, so every state economy stands to lose every month Ex-Im is not reauthorized.”
The Fact-sheet (from the Office of the White House Press Secretary)
The Export-Import Bank: Supporting American Exports and American workers in every State across the country
Because Congress failed to act, the Export-Import Bank’s Authorization would lapse at Midnight (July 1) for the first time in history, hurting Businesses and Workers in every State
The Export-Import Bank, or “Ex-Im,” is a critical tool in the bipartisan trade agenda that helps U.S. businesses succeed in global markets and grow their exports. Ex-Im equips companies with financing they need to go toe-to-toe with foreign rivals, resulting in more exports and more well-paying jobs in cities and towns here in America, rather than overseas. The Export-Import Bank:
Ex-Im boosts exports that support well-paying American jobs. The Bank has financed the sale of more than $200 billion in U.S. exports over the last six years, supporting over 1.3 million private-sector American jobs, including 164,000 jobs in Fiscal Year 2014 alone. Last year, Ex-Im financed the sale of $27.5 billion in exports through more than 3,700 transactions, including nearly $16.6 billion in manufacturing exports—and jobs supported by exports are good jobs, paying up to 18 percent more on average than other jobs.
Ex-Im is a vital tool for small businesses: In FY 2014, nearly 90 percent of Ex-Im’s transactions—more than 3,340—directly supported American small businesses. That does not include the vast number of small businesses benefiting indirectly as suppliers to Ex-Im’s larger customers.
Doesn’t Cost Taxpayers a Penny. Ex-Im doesn’t cost taxpayers a penny. In fact, due to fees and interest, the Bank generated $675 million in returns for taxpayers last year. Default rates on Ex-Im loans were tiny, at just 0.175 percent. Over the last two decades, the Bank has wired $6.9 billion to the U.S. Treasury to support deficit reduction.
Ex-Im has a strong bipartisan support. Ex-Im has earned the support of the last 13 U.S. presidents, Republicans and Democrats alike. Recently, 65 senators from both parties expressed support for Ex-Im’s reauthorization; in the House, a strong bipartisan majority of about 250 members have put their names onto bills reauthorizing Ex-Im. Ex-Im was reauthorized with substantial majorities of support from each party in 2002, 2006, and 2012.