Our guest blogger is Sabina Dewan, Director of Globalization and International Employment at the Center for American Progress Action Fund.
Republican lawmakers are moving to block a job-creation package because it includes a provision that would help U.S. companies access the capital they need to sell their products and services abroad. The party of no’s latest target is the U.S. Export Import Bank (ExIM) — the government agency that provides loans, guarantees and insurance products to enable US companies, especially small businesses, to export.
The ExIm Bank’s charter caps its overall outstanding commitments at $100 billion and Senate Democrats are seeking to raise the cap to $140 billion and reauthorize ExIm for another four years.
But this doesn’t sit well with conservative lawmakers. They object to the reauthorization calling Ex-Im’s activities “corporate welfare” that distorts the free market. House Majority Leader Eric Cantor suggested that, instead of reauthorizing the bank, the U.S. talk to our major trading partners to get them to “end subsidized export financing programs and other forms of export subsidies.”
By all means, lets talk. But in the meantime, there’s no need to pull the rug out from underneath firms and workers that export now. After all, at a time when millions of Americans are unemployed, we need to do everything in our power to create jobs by helping businesses export more — not cut off their financing to do so.
What GOP lawmakers forget is that state-capitalist economies like China don’t abide by our free market rules. Their state-owned enterprises provide seemingly unlimited access to cheap capital. Cutting off ExIm’s ability to finance exports, especially for some of our most competitive sectors like aerospace, will seriously hurt American workers and firms.
What’s more, phasing out Ex-Im’s financing will disproportionately affect America’s small businesses, which are a critical source of middle class jobs and incomes. While large firms with big operating budgets can either afford to finance their own operations or obtain bank financing, small businesses don’t have access to credit because they are considered a riskier bet. They turn to ExIm for their export financing instead.
Not only should Congress immediately reauthorize Ex-Im to operate for another four years, it should raise the bank’s statutory cap well beyond $140 billion to benefit America’s companies, their workers and to create more jobs. And this doesn’t cost us anything — Ex-Im is self-sustaining and even profitable.
This latest ploy by conservative lawmakers is no more than an attempt to stymie the real progress the Obama administration has made on boosting our nation’s exports.