If all nations let the market run free, the United States wouldn’t need a federal Export-Import Bank.
But they don’t, so we do. Congress has again recognized that fact of global-commerce life by renewing the bank’s charter for the next three years.
The Export-Import Bank provides low-interest loans to companies based in the U.S. — and companies based beyond the U.S. — to help American businesses sell their products to customers from foreign nations.
The Senate extended that assistance by a 78-20 vote Tuesday, passing the same legislation that last week received approval in the House, 330-93. President Barack Obama issued a statement Tuesday saying he looked forward to signing the bill.
Yet while those margins of victory were substantial, a significant number of Republicans provided all of the “no” votes in both chambers.
And some House conservatives who voted for the bill, including 1st District Rep. Tim Scott, succeeded in adding reform language to a compromise worked out by House Majority Leader Eric Cantor, R-Va., and Minority Whip Steny Hoyer, D-Md.
In Rep. Scott’s words, those changes “will sunset the bank in three years and mandate corrective actions should the bank’s default rate rise above 2 percent.” He added that the revisions “provide certainty for American job creators while still working toward a smaller government and proper use of taxpayer dollars.”
New stipulations for a series of government audits also will assure that “proper use” by increasing transparency on the bank’s transactions.
But experience, and intensifying export-stimulus efforts by other nations, show that the bill’s elevation of the bank’s lending capacity from the current $100 billion to $140 billion is indeed a proper use of taxpayer dollars.
As Sen. Lindsey Graham, R-S.C., a strong supporter of the bank, pointed out on the Senate floor Tuesday, the bank “makes money.”
Though Sen. Graham applauded the House’s intent to promote free markets, he warned: “It’s one thing to do reform. It’s another thing to unilaterally surrender.”
That’s an apt description of what would happen if the bank were eliminated at a time when, as Sen. Graham put it, “competitor nations are doubling the size” of their own versions of export-import banks.
Unfortunately, our state’s junior U.S. senator, Jim DeMint, allowed ideological rigidity to trump practical necessity. Explaining his “no” vote Tuesday, Sen. DeMint said: “We’re in a bidding war with China and Europe to see who can subsidize the most loans at a time when all of us are broke. We need to bring this to a close.”
However, the Export-Import Bank is not a blank check.
It’s a proven, accountable way to help American enterprises compete on a more level playing field.
Some critics insist that South Carolina conservatives shouldn’t support this “big government” program just because its largest private-sector benefactor, Boeing, has a 787 Dreamliner plant in North Charleston.
They’re right, Conservatives in this state — and in the other states — should back the bank because there’s nothing truly conservative about ignoring marketplace realities.
Ponder, for instance, this statistical reality stressed last week by Boeing CEO Jim McNearney:
“Eight out of every ten Boeing 787 Dreamliners now built in South Carolina are expected to be purchased by international customers who are eligible for and regularly seek export credit support from Ex-Im. Without this support, many of our customers would choose to purchase airplanes from Airbus, made in Europe, built by European labor, sold with the aggressive backing of multiple European export credit agencies.”
Yes, Americans should be wary when politicians — or big business executives — call for massive “investments” of taxpayer money in the marketplace.
But the relatively modest investment risks of federal guarantees on Ex-Im loans have long paid substantial dividends for our nation’s economy.
In addition, those loans have returned $1.9 billion in interest payments to the Treasury over the last five years.
And while the grand ideal of worldwide free markets would make the bank unnecessary, the real-world demands of the modern global marketplace make it indispensable.