American exporters, particularly small businesses, will lose a vital resource on May 31 unless Congress reauthorizes the Export-Import (Ex-Im) Bank, the official export credit agency of the United States.
Ex-Im, established in 1934, guarantees loans from U.S. banks to foreign businesses to finance their purchase of U.S. goods and services. This is particularly important for Massachusetts because we have a concentration of export-dependent smaller companies, many of them manufacturers of specialized technology products and services.
Ex-Im provided $32.7 billion of financing last year for exports by more than 3,600 U.S. companies; 85 percent of the transactions involved small businesses. The resulting $41 billion in exports support an estimated 290,000 U.S. jobs. Export-related jobs tend to offer higher pay, better benefits and greater stability than average, even for the manufacturing sector.
The bank operates at no cost to the taxpayer, and in fact returns hundreds of millions of dollars annually to the U.S. Treasury.
Ex-Im is regarded by the Obama administration as a key resource to meet the goal of doubling U.S. exports by 2015. The reauthorization bill is hung up in the Republican-controlled House of Representatives because of concern that the bank’s financing of aircraft-related exports gives foreign airlines an edge over competing U.S. carriers.
Whatever the disposition of specific issues, the larger national interest – and certainly that of Massachusetts industries – requires that Congress pass legislation to reauthorize Ex-Im for the long term (it is currently operating under an extension) and substantially increase its lending authority. Allowing Ex-Im to run out of funding ability would seriously impede pending and future export sales of American products and services at a time when competitiveness in the global economy is central to economic and business strategies.