We all know it is never a good idea to bet the bank in a casino. Just like you wouldn’t put your life savings down on a hunch, our government shouldn’t gamble 1.2 million American jobs on an untested economic theory. But unfortunately that is exactly what some in Congress are considering.
A small but powerful group in Washington is fighting to kill the Export-Import Bank, a little-known agency that for 80 years has helped American companies export goods around the globe. Since 2007, it has worked with over 9,000 companies to support their exporting over nearly $300 billion in American-made goods.
Every year it sustains 1.2 million private sector jobs across America without costing taxpayers a dime. But Ex-Im’s opponents want to let the bank’s charter expire on June 30, putting this vital economic activity at risk.
Their rationale? A misguided view that any government activity that helps American business is an improper intrusion in the marketplace — “crony capitalism” in their words.
But Ex-Im is no such thing. Its services are available to help any American business selling goods abroad. It serves everyone, not the politically connected or large powerful companies. In fact, nearly 90 percent of Ex-Im’s transactions are with small- and medium-sized companies.
Contrary to these critics, the Ex-Im Bank does not offer subsidies or handouts at all — and its loans and guarantees have been found by PricewaterhouseCoopers to be “at market” rates. Like any bank, Ex-Im charges its users, mostly foreign companies buying American goods, interest on its loans. In fact, because of this, Ex-Im doesn’t cost taxpayers a dime. Most years it actually returns money to the Treasury because it brings in more than it costs to operate.
The Ex-Im Bank is a critical tool for many U.S. manufacturers who export their goods. It is particularly vital for the remaining state-of-the-art industries where America is still the world leader, like the aerospace industry. According to the Aerospace Industries Association, over the past 10 years the industry has become increasingly export focused, with 76 percent of total shipments in 2014 aimed at international markets, an increase of 10 percent since 2010. In 2014 alone, the Ex-Im Bank financed $243 million to support the export of aircraft spare engines and maintenance, repair, and overhaul components and services.
Ultimately, Ex-Im’s opponents are trying to prove a point — that government has no role helping U.S. business succeed and shouldn’t compete with the private sector to help companies export their goods. But Ex-Im doesn’t compete with commercial banks. It is a “lender of last resort,” meaning it only helps when there is no private sector alternative available. Companies seeking Ex-Im’s help have to go as far as showing how they couldn’t find commercial financing before Ex-Im can even help.
Ending Ex-Im is too risky of a bet for the big companies and mid-sized businesses across America who have used it to sell their goods abroad.
And it is even a risk for the smallest of businesses, which may be several steps removed from the ultimate exporters in the supply chain, but nevertheless provide sub-components and services on contracts that wouldn’t exist but for export sales.
My company, Spacecraft Components Corp., is a veteran-owned manufacturer based in a HUBZone area in North Las Vegas. Since 1962, we have designed and built electrical connectors used in commercial and military airplanes, trains and spacecraft. We employ more than 125 highly skilled engineers and technicians who take pride in making parts Boeing uses to build its airplanes. Whenever we see the airplanes landing at McCarran bringing the tourists to our state that drive our local economy, we know our company played a small role in building that plane.
We know that killing Ex-Im would mean fewer exports. Fewer exports mean less business for American suppliers and sub-contractors. It would hurt businesses and cost jobs up and down the entire supply chain. Critics attack Ex-Im as “Boeing’s Bank,” but Boeing supports 1.5 million supplier-based jobs around the country, including thousands of high-skilled jobs in Nevada.
Every airplane that doesn’t get built due to the attack on the Ex-Im Bank means lost jobs at every company that supplies wiring, valves, airframe components, engines, electronics, hydraulics, all the way down to the last floatable seat cushion and folding tray table.
After looking at the facts, ending Ex-Im isn’t just a risky bet — it’s a sure loser. That is why I hope our representatives in Congress will do the right thing and vote to reauthorize the Ex-Im Bank.
Craig Wiseman is president and CIO of Spacecraft Components Corp.