President Obama signed a major transportation package Friday that includes $3.5 billion in highway funding and $1.2 billion in transit funding for Washington State over five years.
That’s great news — and it gets better.
The renewal of the nation’s Export-Import Bank, a relatively obscure agency that until this year had functioned without much controversy, was in jeopardy of becoming extinct. But, thankfully, an unrelated piece of legislation that revived the bank was slipped in for the ride with the transportation bill.
That means the bank’s renewal also was approved, so officials can get back to helping America’s manufacturing firms better compete internationally.
Congress created the Export-Import Bank in 1934 as part of Franklin D. Roosevelt’s New Deal. For more than 80 years, it has successfully provided credit insurance, loans and guarantees to help foreign buyers purchase U.S. goods and services.
But its charter expired in July, and a group of Tea Party conservatives managed to delay its renewal, with the intent to kill it. Opponents have called the Export-Import Bank “corporate welfare” and say it puts taxpayers’ money at risk and runs counter to philosophical objections to big government programs. They complain that government resources should not be used to finance international deals that benefit major corporations — particularly companies like Boeing.
While it is true the Export-Import Bank finances some of the jet manufacturing giant’s overseas sales, the bank benefits small companies too.
Almost 100 businesses in Washington state used the Export-Import Bank, and many of them were not particularly large corporations — including Mid-Columbia wineries trying to break into new markets.
Last year the bank authorized $20 billion worth of transactions, which supported $27.5 billion of U.S. exports and 164,000 jobs. Without the bank, these jobs would be gone.
In addition, the bank is one of the few government agencies that actually makes money and adds revenue to the national treasury. It funds itself by charging fees to foreign buyers who use its services, and the default rate is less than 1 percent.
At least 60 other nations around the world operate similar banks. Cutting ours out of the picture will simply give our competitors an edge.
Frank Hochberg, chairman of the Export-Import Bank, told The Wall Street Journal that officials in China and India were outspoken about how halting the bank’s operations in the U.S. would benefit their own international trade industries.
It is foolish not to continue the bank’s charter and provide similar help to our own, American businesses.
Rather than corporate welfare, the Export-Import Bank levels the playing field and allows our own companies a chance to compete on an international scale. Fortunately, enough bipartisan support emerged to save the bank from a vocal minority.