President Obama is pushing for reauthorization of the Export-Import Bank, which finances the export of American goods and services, so that the nation’s businesses can keep selling Made in USA products to the global market.
The bank’s authority lapsed as of July 1, 2015, meaning neither the bank nor any of its delegated authority lenders can authorize new transactions. Any preexisting loans, guarantees and insurance policies will continue as will pre-approved transactions according to their terms.
After meeting with small business about the impact this lapse and a failure to reauthorize the bank would have, the president issued a statement urging action on the matter.
“This is not an issue that typically rises to the front page of the newspapers, but for these businesses and for their employees and for the communities that they serve, this is vital,” he said.
For 81 years, the EXIM Bank has been helping small business with fewer than 20 employees sell Quiche overseas or enabling bigger businesses manufacturing trains and bridges to sell their products to foreign businesses, foreign markets and even foreign governments.
Instead of asking foreign buyers to pay cash up front for goods, which might make some companies balk, the bank provides a means for financing.
In fiscal 2014, EXIM Bank financing supported $27.5 billion worth of U.S. exports, and $10.7 billion of that total reflects exports from small businesses, making small business exports the top category for the bank’s support.
Because companies pay a fee for the bank’s facilities, the U.S. government also makes money.
“So I just want to be clear about this. This is not a situation in which taxpayers are subsidizing these companies,” President Obama said. “In fact, at the end of the day, we have a situation in which the U.S. Treasury is benefitting while at the same time allowing these companies to sell their products overseas.”
The bank has historically been a bipartisan program with support under both Democratic and Republican presidents and members of Congress on both sides.
President Obama said, “The fact that for the first time since its inception Congress failed to reauthorize this is a shame,” adding that, “Every other advanced country on Earth has a program like this in order to promote their businesses when they’re selling overseas. And for us to be the only country that leaves these outstanding companies high and dry makes absolutely no sense.”
Obama addressed critics’ commentary that the bank is “just corporate welfare for big multinationals” saying that the notion is entirely wrong. It’s true that the financing arrangement allows Boeing to sell planes to companies that might not be willing to dish out in-advance cash, but it also let’s 12-staff member Ferra coffee company do overseas business.
American businesses need the EXIM Bank because private financing in traditional banks doesn’t provide the same service or expertise in dealing with foreign markets.
“From coast to coast, people are being affected by this, and we heard stories from these companies right now that orders are on hold, business is in danger, potentially expansions will stall, fewer employees will be hired if we do not get this done,” the president said.
The decision to reauthorize should be “a no-brainer” according to Obama, who said no one has yet presented a plausible reason not to do so.
“These next couple of weeks, before Congress adjourns, is the time for us to go ahead and complete this. We cannot leave these businesses hanging; we cannot unilaterally disarm,” Obama said. “Most importantly, we can’t have American workers losing jobs because Congress doesn’t act or because of some ideological arguments that don’t make any sense and don’t match up with the facts.”