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Tuesday, March 19, 2024
March 19, 2024

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In Our View: End Threat to Ex-Im Bank

Congressional dithering on a valued old institution serves businesses ill

The Columbian
Published:

As Republicans settle into the captain’s chair in Congress, the Export-Import Bank presents them an opportunity to demonstrate they have the ability to effectively steer the ship while simultaneously boosting the economy in Washington.

Renewal of the bank’s charter could be a simple action that occurs with little debate — as it has more than a dozen times over the past eight decades. Yet all indications are that the “Ex-Im Bank” — an 81-year-old entity that provides guaranteed loans to American businesses’ foreign customers — will be subject to the demagoguery that has hampered Congress in recent years. Operating on fees charged to its customers, the bank has made $6.9 billion for the U.S. Treasury over the past 20 years.

That, however, has not made it immune to criticism, particularly from small-government adherents in Congress. After much debate last year, the bank’s charter was re-approved for nine months — enough to get through the mid-term elections without creating too many waves. The reauthorization expires June 30, and without action — possibly not even coming up for a vote — the bank will sink.

Criticism of the bank is worthy of examination, yet it typically does not stand up to scrutiny. The most common critique is a rebuke of “crony capitalism” in which government arbitrarily chooses a handful of companies to support. The fact that many of the critics also support subsidies for Big Oil and other large-profit multinational corporations renders this argument moot.

While big corporations such as Boeing often benefit from the Ex-Im Bank, small businesses do as well. In Vancouver, Columbia Machine, Korab USA, and Northwest Pipe Company — along with others — have been boosted by loans that help them compete in the international marketplace. The Ex-Im Bank guarantees that those companies do not lose money if foreign customers fail to pay their bills.

Meanwhile, other countries trying to generate business operate their own versions of the Ex-Im Bank. As Rep. Chris Collins, R-N.Y., wrote in an opinion piece last year for USA Today: “We do not live in a world where other countries abide by the same free-market principles.” The Export-Import Bank of China, founded in 1994, is four times the size of the U.S. Ex-Im Bank.

Furthermore, the Great Recession highlighted the importance of the Ex-Im Bank. Critics say that if the loans are so vital, then private lenders will fill the void. But the recession provided an example of how a downturn in the global economy can lead to tight lending practices, and a federally backed bank can help level the economic valleys.

Washington, as the most trade-dependent state in the country, is particularly reliant upon the Ex-Im Bank, with an estimated 85,000 jobs being supported. Cathy McMorris Rodgers, R-Wash., who represents the Spokane area and is the fourth-ranking Republican in the House of Representatives, has said that she hopes the Ex-Im Bank will be reauthorized but stressed the need for reforms in how it does business.

That position is preferable to the intransigence of some Republicans who would rather pander to the red-meat faction of their party than embrace a policy that supports American jobs. As Congressional leaders embrace the opportunity to demonstrate their ability to lead, they would be wise to heed the words of Rep. Collins: “For once, they can stop simply talking about creating jobs, and do something that actually creates jobs.”

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