On April 17, the Senate Banking, Housing and Urban Affairs Committee held a hearing entitled: “Export-Import Bank Reauthorization: Saving American Jobs and Supporting American Exporters.” Sonya Kostadinova, a board member of the Small Business Exporters Association (SBEA)—the international trade arm of NSBA—testified before the committee on behalf of NSBA/SBEA. NSBA First Vice Chair, and SBEA Board Member David Ickert also provided testimony before the committee.
Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. The Bank provides a variety of financing mechanisms, including working capital financing, export-credit insurance and financial guarantees to help foreign buyers purchase U.S. goods and services.
This was a timely hearing, as the current Ex-Im Bank extension is set to expire at the end of May, 2012 and includes no increase in its lending cap which could cause major stoppages in new lending and support to small businesses, such as Transcon, when they need it most.
Most recently, the Senate did attempt to move forward on reauthorization language during debate over the Jump-Start Our Business Start-ups (JOBS) Act (H.R. 3606.). However, Ex-Im Bank reauthorization fell to partisan maneuvering when the Senate failed to reach cloture on an amendment by Sens. Maria Cantwell (D-Wash.), Tim Johnson (D-S.D.), Lindsey Graham (R-S.C.) and Richard Shelby (R-Ala.) which would have reauthorized Ex-Im Bank through Sept. 30, 2015, and increased the cap—to $140 billion—on its lending authority.
During the hearing, several senators indicated that, despite concerns raised by some House members, a bipartisan deal appears to be within reach. Efforts to renew the Bank's charter have run into objections from some who say it is unnecessary government interference in the market and have gone so far as to call it “corporate welfare.” However, it is important to note that the Bank is fully self-funding and highly profitable, sending substantial sums to the U.S. Treasury each year. Over the last five years, Ex-Im Bank has made net revenue through the fees it charges, earning $1.9 billion for taxpayers over the last five years.
In addition to testifying before the Senate, Chris Davis of Five Peaks Technology in Muskegon, Michigan--along with Ickert and other small exporters--participated in a briefing for Senate staff on April 11 to share the small-business perspective on the critical role Ex-Im Bank plays in helping grow U.S. exports and create American jobs. Their stories were well-received by the myriad staffers in attendance.
Highlighted at the both the hearing and the briefing, was the fact that last year, the Bank supported more than $41 billion in exports from more than 3,600 companies – 85 percent of which were small businesses. Those exports, in turn, supported roughly 290,000 American jobs. Most of these companies are competing against international companies that receive vastly more financing from their governments. Germany, France and India provided seven times more export assistance as a share of GDP than did the U.S. in 2010.
The Bank has historically had bipartisan support and last September the Senate Banking Committee unanimously passed a bill to renew the Bank's charter to 2015 and raise its lending authority to $140 billion, from the current $100 billion level.
However, that bill never reached the full Senate and instead was the target of partisan politics. Fortunately, leadership from both sides now appears to more open to discussions in trying to find a compromise between two differing approaches that all sides can support.
SBEA has been an outspoken proponent of a long-term reauthorization for Ex-Im Bank along with an increase in their exposure cap to $140 billion. As noted in the comments made by Ickert, Kostadinova and Davis, short term extensions have a paralyzing effect on small exporters, many of whom rely on Ex-Im financing and simply cannot proceed with deals—even in the presence of interested customers—without the support and stability of Ex-Im Bank.
Please click here to view Kostadinova’s full testimony.