Revive exportimport bank for job growth
Institution needs a strong leader to fill office that has been vacant
If our country is going to create jobs and expand the economy at a faster rate, we need to increase exports. That means that President Trump and Congress should find a strong leader for the U.S. Export-Import Bank so that it can do its job.
The chairman’s office has been empty for nearly a year. And its board lacks a quorum to approve deals worth more than $10 million. That means about 80 to 90 percent of its activities are shut down. The last whole year that the bank was fully operational was Fiscal Year 2014.
Last month, the Senate Banking Committee wisely refused to confirm the president’s nominee, Scott Garrett. When he was a New Jersey congressman, Garrett voted twice against renewing Ex-Im’s charter, and the U.S. Chamber of Commerce “strongly opposed” his confirmation.
As chairmen of the Ex-Im Bank for Presidents Ronald Reagan and George H.W. Bush, we know firsthand the institution’s power to promote the nation’s economic interests. In the last decade, the bank has supported more than 1.7 million jobs in all 50 states. And export-supported jobs are good jobs: They pay, on average, up to 18 percent more.
Critics, like Garrett, maintain that the bank primarily helps large corporations. The numbers tell a different story: In 2014, nearly 90 percent of the ExIm’s transactions directly served small businesses. CECA Supply & Services Inc. of Houston has relied upon the Export-Import Bank for nearly a decade to export oilfield equipment to Algeria. Since taking advantage of Ex-Im Bank’s financing, the company has increased its sales from $5 million to just under $49 million, all of which are
export-related. “We are big supporters of the bank,” said President Rami Touma. “It’s been a great resource for us.”
The list of Houston-area firms supported by Ex-Im in recent years also includes GX Technology Corporation, Schlumberger Technology Corp., Cameron Solutions, Baker Hughes Oilfield Operations, M-I LLC, and Paragon Offshore Services.
What does this cost taxpayers? Nothing — all the money comes from the bank’s own operations. In fact, it actually generates money for the taxpayer. That’s how cost-effective it is. Since 1992 Ex-Im has sent the U.S. Treasury $7 billion more than it has received in appropriations.
The bank was born in 1934 to provide financing for transactions that otherwise would not take place because commercial lenders were either unable or unwilling to accept the political or commercial risks. Small businesses, for example, often operate with razor-thin margins, which tend to deter private financers. The bank provides a variety of loan, guarantee, and insurance products to aid the export of American goods and services.
During its 83 years the bank has had the support of every president. Ronald Reagan said, “The Export-Import Bank contributes in a significant way to our nation’s export sales.” (Its second chairman was Houston legend Jesse H. Jones.)
If we allow Ex-Im to atrophy, we will be closing our eyes to the new realities of global competition. The bank used to be a novelty, but today there are more than 90 such agencies around the world, and other governments have given their own versions of the bank more flexibility and authority. During eight decades of operation, Ex-Im has financed some $600 billion worth of exports. China has financed more than that over just the past two years.
We risk kicking away tremendous opportunities. The McKinsey Global Institute projects that the world will need to invest $3.7 trillion in economic infrastructure each year through 2035 to keep up with projected GDP growth. On every continent airports, highways, railroads, power plants, cell towers, and hospitals need to be built. If we don’t have a vibrant agency providing financing for companies that need a hand, then firms in other countries will win the contracts that might otherwise have come to American businesses.
Global competition is fierce — and becomes more so by the day. We urge the president to nominate — quickly — a chairman who will put the Ex-Im Bank to work on behalf of American companies and their employees and stockholders. Draper and Macomber chaired the Export-Import Bank under Presidents Ronald Reagan and George H.W. Bush, respectively.