The Export-Import Bank's authorization is set to expire on June 30, 2015—and the House and Senate must decide whether to reauthorize the Bank.
What is the Ex-Im Bank?
The Export-Import Bank is the official export credit agency of the United States. Its mission is to assist in financing the export of US goods and services to international markets. The Ex-Im Bank offers direct loans, loan guarantees, working capital guarantees and export credit insurance, as well as special financing programs.
In FY 2014, the Export-Import Bank supported 164,000 US jobs through financing approximately $20.5 billion worth of exports. Nearly 90 percent of Ex-Im’s authorizations that year directly served small businesses, as defined by the Small Business Administration, according to the Bank President. Last year, the Bank supported manufacturing exports of nearly $16.6 billion. Sixty-eight percent of total authorizations in FY 2014 went to projects in developing markets, up from 62 percent in FY 2013. (Source: Ex-Im Bank's Chairman Fred Hochberg's testimony before the House Oversight Committee.)
(Graphic on the right: 2014 Export Value by Industry and Small Business, Export-Import Bank.)
The Export-Import Bank was established by executive order in 1934 and became an independent agency in 1945. In 2014, Congress temporarily reauthorized the Ex-Im Bank, which expires on June 30, 2015. This week, the House Financial Services Subcommittee on Monetary Policy and Trade, and Oversight and Government Reform Subcommittee on Health Care, Benefits, and Administrative Rules, will conduct its second joint hearing looking into the future viability of Export–Import Bank, which is up for reauthorization in June. During the first joint subcommittee hearing on April 15, “the Committees learned two key things: 1. the Obama Administration has failed to meaningfully comply with the requirements passed by Congress and signed into law as part of the reauthorization of Ex-Im in 2012 and 2. the Ex-Im Inspector General mentioned that future indictments at the bank are possible.”(Learn more.)
From our Hill Sources
Supporters of the Ex-Im Bank say that not reauthorizing “would be detrimental to the thousands of small businesses that work with the Export-Import Bank and would put export-dependent jobs in jeopardy.” A bipartisan group of governors sent a letter to Congressional leadership urging reauthorization of the bank. (Read the governors' letter.)
Business leaders have also been outspoken about the bank’s reauthorization. Boeing’s Chief Executive Jim McNerney said that his company may have to relocate US-based engineering and manufacturing jobs overseas if Congress eliminates funding for the Export-Import Bank. “Most of my engineering and manufacturing jobs are in the United States and I'd like to keep it that way. But without Ex-Im financing, you'd have to start asking the question” about where they should be, McNerney explained last week. “Boeing can survive, for sure … but the competitiveness dislocation would be significant. If Ex-Im goes away, you'd have the ‘Wild West.’”
Several Members of Congress—mostly Republicans—urge that the Ex-Im Bank should not be reauthorized. They argue that the Ex-Im Bank doesn’t create jobs, citing a 1997 GAO study that found that government export finance assistance programs like Ex-Im “largely shift production among sectors within the economy rather than raise the overall level of employment in the economy.” Senator Marco Rubio (R-FL), a 2016 Presidential candidate, recently explained: “The government should not be picking winners and losers when it comes to the free market. It doesn't level the playing field for U.S. exporters…. It doesn't create jobs.”
Related Bills in Congress
Members of Congress are proposing reauthorizing the Bank, as well as reforming it—or eliminating it completely:
Export-Import Bank Reform and Reauthorization Act (S 819)
Sponsor: Sen. Mark Kirk (R-IL)—Bipartisan— (Four year reauthorization.) “Will reauthorize the Bank's charter until September 30, 2019, increase small business lending, support American jobs and minimize risk to taxpayers by enchancing bank oversight,” according to bill sponsors. “The bill reduces risk to taxpayers by requiring higher loan loss reserves; puts greater focus on small businesses by increasing the required lending to small businesses from 20% to 25%; and increases Oversight of Bank Practices. The bill creates a Chief Risk Officer and a Risk Management Committee to oversee the Bank's operations, requires the Inspector General to audit the Bank’s risk management procedures regularly, and creates a non-political Chief Ethics Officer to oversee ethics practices of Bank employees.”
Reform Exports and Expand the American Economy Act (HR 597)
Sponsor: Rep. Stephen Fincher (R-TN) (Five year reauthorization.) To reauthorize the Export-Import Bank of the United States. According to the bill sponsor, “legislative reforms include: increased capital requirements for loan-loss reserves to protect taxpayers from future defaults; reduced taxpayer exposure from $140 billion to $130 billion; parallel GAAP reporting; making the EX-IM Bank the lender of last resort; increased risk sharing by private sector lenders and exporters; enhanced multilateral negotiations to reign in official export credit from OECD countries as well as non-OECD countries like China; a clearly defined a role for the Chief Risk Officer and members of the Board of Directors that provides balance with the Bank’s Chairman; required independent audit of the Bank’s portfolio; and greater anti-corruption safeguards.”
Promoting US Jobs through Exports Act (HR 1031)
Sponsor: Rep. Maxine Waters (D-CA) (Seven year reauthorization.) Extends Ex-Im’s charter until the end of fiscal year 2022. “It also includes a number of important reforms to strengthen the Bank, including provisions to expand opportunities and refine Bank products used by small- and medium-sized businesses,” according to the House Financial Services Committee. “In addition, the legislation contains provisions to root out any possible opportunities for corruption and fraud and protect taxpayer investments in Bank-supported businesses. The measure establishes a permanent Chief Risk Officer, which is accountable to the Bank’s Board and responsible for all matters relating to managing and mitigating the Bank’s risk. The measure also directs the administration to take steps to bring all nations into the Organisation for Economic Co-operation and Development (OECD) framework for export credit assistance and seek World Trade Organization remedies for countries that violate international trade agreements.” “Finally, the proposal increases transparency by requiring the Bank to publicly display environmental assessment reports on its website no later than 15 business days after the Bank receives these documents, eliminating the cumbersome disclosure process currently in place. It does not contain controversial provisions included in other reauthorization measures that seek to overturn the administration’s guidelines preventing the Bank from financing for overseas power plants that do not adopt environmentally friendly technology.”
Promoting US Jobs through Exports Act (S 824)
Sponsor: Sen. Jeanne Shaheen (D-NH) (Seven year reauthorization.) “Would provide long term certainty for small businesses by extending the Export-Import Bank through 2022, continuing the bank’s ability to provide businesses with tools they need to compete in the global marketplace and create American jobs,” according to the bill sponsor. “Would increase the Bank’s lending cap by $20 billion over that period, contingent on the Bank’s default rate remaining below two percent. It would also increase the Bank’s loans to small businesses by five percent.”
Export-Import Bank Termination Act (HR 1605)
Sponsor: Rep. Justin Amash (R-MI) Abolishes the Export-Import Bank of the United States three years after enactment of this Act.
— Please keep in mind that highlighting a bill doesn't imply a POPVOX endorsement in any way. Rather, we're simply trying to offer one more way to stay informed of a complex legislative system. —
