Magazine article Business Credit

The Case for Continued Bipartisan Support of Ex-Im

Magazine article Business Credit

The Case for Continued Bipartisan Support of Ex-Im

Article excerpt

The following is an excerpt from the prepared remarks delivered by Export-Import Bank Director Sean Mulvaney at FCIB's 24th Annual Global Conference, hosted in Philadelphia in September. FCIB was pleased to be able to include Director Mulvaney on the program and sincerely thanks him for his presentation.

The Export-Import Bank of the United States (Ex-lm) has a body of critics that would like to eliminate it. Tbeir criticism draws its roots from Americas long attachment to limited government and our citizens' deep commitment to free markets and economic freedom. I share that attachment to limited government and economic freedom. However, as you can imagine, I am in a different place on the role of the Export-Import Bank.

But, as I disagree with Ex-lm critics, as I make the case in support of Ex-lm, I will not question the integrity of their deeply held-beliefs. It makes no sense to make light of or mock the competence of our critics. In our democratic system when we engage in heated policy debates, we must recognize that we are serving the public and let the merits of our arguments support our position. We must highlight how Ex-Im's mission and programming are part of a larger fabric of the United States' international economic policy intended to reinforce a global trading system based on effective rules that foster fair competition and free trade. We should not begrudge the fact that Ex-lm follows rules and has principles governing our conduct.

Undisciplined export credit policies can be very costly to taxpayers and nations around the world. Moreover, gains from trade and the integrity of the World Trade Organization (WTO) trading system the U.S. spent decades constructing with the help of other countries could be undermined.

Discipline-particularly in the conduct of public policy-is an admirable trait. Americans expect leadership by example. U.S. international economic policy will defend our interests, but we should never lose sight of the fact that we want to model the way for the rest of the international community.

Concern: Ex-Im's business model is a form of crony capitalism.

Ex-lm does not pick exporters to support. Institutionally, it is very demand-driven by U.S. businesses seeking an Ex-lm programming presence. Yes, it is true there are a certain number of high dollar volume users. But Ex-lm supports export companies like Boeing and GE because U.S. jobs would be lost due to foreign government support of Airbus and Siemens.

Furthermore, it is untrue to think of us solely as a "big business bank." We strive to serve small business too. Sometimes we are not as good at it as we would like to be, but we consider it a critical part of our mission. In FY 2008, Ex-lm Bank financed $3.2 billion in direct small business exports. In FY 2012, we financed a total of $7.5 billion in small business exports, of which $6.1 billion was direct. At Ex-lm Bank, small business accounted for 88% of all transactions last year.

If there is an appropriate criticism of Ex-lm, it is that our rules do not recognize how supply chains of many U.S. exporters have gone global to remain competitive, and fewer firms are able to leverage our mission to level the playing field on their behalf. Moreover, Ex-Im's procedures under-appreciate the growing importance of the U.S. service sector economy and the need for Ex-Ims mission to be available to U.S. services exporters.

Concern: Ex-Im programming is corporate welfare. U.S. taxpayers are expensed for its activities, crowding out scarce resources for other programs. Eliminating Ex-Im would reduce federal spending and the size of the deficit.

Over the past five years Ex-Im Bank has generated $1.6 billion for U.S. taxpayers, above and beyond all administrative operating costs, claims and loan loss reserves we have set aside. We operate at no cost to the taxpayers. It is a self-sustaining agency. In fact, in 2012, the Bank collected $1 billion in fee income and sent more than $800 million (the excess of Bank expenses and loan loss reserves) to the U. …

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