Senators Press Ex-Im Bank President on Domestic Job Growth, Small Business Authorizations
The Export-Import Bank has failed to meet designated targets for small and medium-sized business transactions since 2012 reauthorization, building off a history of inability to meet its 20 percent small business authorization mandate, said Senate Banking, Housing and Urban Affairs Committee Ranking member Mike Crapo, R-Idaho, at a Jan. 28 committee hearing. Led by President Fred Hochberg, the bank still plays a critical role in countering disproportionate, foreign government subsidies on exports, said Crapo.
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“Relative to the size of their economies, certain European governments use export credit agencies to provide three times as much official credit as the bank does. China and India provide four times as much. Countries like China institutionalize protectionist policies at the direct expense of other nations,” said Crapo. “I look forward to working with the chairman and all the members of the committee to develop a bipartisan plan for the bank’s upcoming reauthorization that will make a real commitment to small and medium businesses while continuing to ensure that any risk to American taxpayers is minimized.”
The funding for the program, provided through Export-Import Bank Reauthorization Act of 2012 (here), expires at the end of Fiscal Year 2014, on Sept. 30. U.S. exporters rely on the bank financing to compete against over sixty other export credit agencies around the globe, some unregulated, said Hochberg. Failure to reauthorize the bank will diminish the American private sector capacity to reach 95 percent of the world’s customers that live outside the U.S., said Hochberg. “If we are not reauthorized, we put in jeopardy the 205,000 jobs that are financing supported this last year,” said Hochberg. “When we finance an export, it’s because financing is not available through the private sector. So it’s really putting all those 205,000 jobs, and all those families that rely on those jobs, at risk.” The bank financed a record 3,413 small businesses in 2013, making nearly 90 percent of the bank’s transactions in terms of sheer numbers.
The bank has also invested strongly in renewable energy commodities, and continues to bolster a U.S. export economy that is registering historic figures. Moreover, the bank is helping U.S. companies establish credibility with private sector lenders so those companies are not forced to seek financing options from the bank, said Hochberg. “American exports are at an all time high," said Hochberg, noting the $195 billion in exports recorded in November was largest one month total in U.S. history. "At the same time, our authorizations were down last year $27 billion from 36 the year before,” said Hochberg. “Exports are up and Ex-Im authorizations are down. That actually is a very good trend.”
Senate Banking, Housing and Urban Affairs Committee Chairman Tim Johnson, D-S.D., pledged to work with the committee to shepherd in reauthorization prior to the expiration, but pressed Hochberg to ramp up the bank’s efforts to foster U.S. domestic job growth. Nonetheless, the bank annually delivers money to U.S. taxpayers through surplus, said Johnson. “The bank is one of the few federal agencies that actually makes money for the U.S. government,” said Johnson. “Since 2008, it has been self-funded.”