The Export-Import Bank of the United States (Ex-Im) is the official export credit agency of the United States. Ex-Im is an independent, self-sustaining agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services.
When private sector lenders are unable or unwilling to provide financing, Ex-Im fills in the gap for American businesses by equipping them with the financing tools necessary to compete for global sales. In doing so, the Bank levels the playing field for U.S. goods and services going up against foreign competition in overseas markets, so that American companies can create more good-paying American jobs.
Because it is backed by the full faith and credit of the United States, Ex-Im assumes credit and country risks that the private sector is unable or unwilling to accept. The Bank’s charter requires that all transactions it authorizes demonstrate a reasonable assurance of repayment; the Bank consistently maintains a low default rate, and closely monitors credit and other risks in its portfolio.
It is rumored that reauthorization of Ex-Im unfairly hurts domestic companies and costs the American taxpayer billions. Ex-Im programs do not cost taxpayers a cent. Any loans made must be paid back with interest. In fact, Ex-Im turns a profit for the American taxpayer; in 2012 and 2013, Ex-Im returned $1.1 billion dollars to the U.S. Treasury after covering all its expenses to sustain ongoing operations.
Borrowers have defaulted on less than 2% of all loans backed by Ex-Im since its inception in 1934, a default rate lower than commercial banks. The bank’s default rate for fiscal year 2013 was .25% (one quarter of one percent). Ex-Im loans and guarantees present very low risks because they are backed by collateral of real goods for which a buyer has already been found and a price has been agreed. Every other trading nation has an export credit agency that does as much or more than what Ex-Im does to promote home-country exports. Thus, Ex-Im programs have the opposite effect from distorting market forces: they level the playing field so that market forces actually function.
If Ex-Im were shut down then market forces would be distorted, because other countries would continue their own export credit programs, creating an imbalance. Trade subsidies, meaning government giveaways to support exports, are a real problem – France subsidizes Airbus, China subsidizes Huawei. But Ex-Im does not subsidize anybody.
Lastly, it is a myth that Ex-Im only helps foreign or politically connected corporations. In 2009, small businesses accounted for more than 85% of Ex-Im’s total authorizations. In fiscal year 2013, the Bank approved and helped a record-high 3,413 small business receive loans to export their products. These business transaction figures do not include the tens of thousands of small and medium-sized businesses that supply goods and services to large exporters.
Efforts to diminish Ex-Im bank's ability to fulfill its mission—to support U.S. jobs through exports—can only result in the bolstering of foreign enterprises competing with U.S. exporters, which ultimately hinders the creation of American jobs. Ninety-six percent of the world’s customers are outside the U.S. If we want to create more opportunity and more high-paying jobs here at home, we need to sell more American-made products and services overseas.
This is not about politics. This is about keeping ALL American companies competitive in the global marketplace. The U.S. Chamber of Commerce, National Association of Manufacturers, and the Mississippi Manufacturers Association support reauthorization and collectively represent thousands of companies that create hundreds of thousands of jobs for Americans. Reauthorization ensures U.S. exporters have a seat at the table and are able to compete fairly in growing markets throughout the world. I will continue to support Ex-Im and will vote in favor of reauthorization when it comes before the House of Representatives.