In a rare bipartisan compromise, the House last week approved the reauthorization of the U.S. Export-Import (Ex-Im) Bank, ensuring that the bank will continue to provide critical financial assistance to U.S. firms that export their products. The Senate is also expected to act soon which will hopefully put an end to months of uncertainty over the fate of the bank, seen as a vital tool for job creation and economic growth.
As I have argued previously here, the bank has been an important policy tool for growing the nation’s exports and supporting the administration’s National Export Initiative aimed at doubling exports. It has done so by filling gaps in private export financing and assuming credit risks that the private sector is unable to do. It has also enabled U.S. exporters to compete in a tough global market where several countries provide much more generous export finance.
By the bank’s own count, it approved $32.7 billion in total authorizations in FY 2011, which includes more than $6 billion directly supporting small business export sales. Over the last 77 years of its existence, the bank has supported more than $456 billion of exports. The Ex-Im Bank’s support for U.S. exporters is undoubtedly a key factor in the nation’s record export levels, totaling over $2.1 trillion in 2011.
That’s why the House approval of the bank’s reauthorization is such welcome news. It signals a much-needed certainty to U.S. exporters by extending the bank’s authority through September 2014 and increasing its loan exposure cap by 40 percent to $140 billion.