EXIM Bank Charter Renewed, for Now
The House of Representatives leadership decided not to decide, in the manner of true lame duck session. Rather than voting to extend the charter for the Export-Import Bank of the United States, which was set to expire on the last day of September, instead Congress, indicating little more than a soft commitment, extended the charter for nine months to June 30, 2015. This decision was much to the chagrin of the House Tea-Party coalition, which believes the Ex-Im Bank is nothing but corporate welfare and an unnecessary burden on U.S. taxpayers.
The Ex-Im Bank helps finance loans to foreign companies that want to import American goods back to their own countries. The Ex-Im Bank will finance these foreign countries or businesses at a very low interest rate, so foreign countries and businesses win, as do the American companies they’re buying products from. According to one accounting matrix, the bank made a profit of $1.1 billion in fiscal year 2013 and gave that profit to the Treasury. Conversely, the default rate is a tiny fraction of 1 percent.
How will a nonrenewal of the charter affect exporting businesses in the United States? Once again, look at Worldwide Power Products, for example. We really are worldwide, we export half of our products out of the United States, and many of the deals and transactions we complete are facilitated by loans from the Ex-Im Bank. And we are not alone.
The Tea Party doesn’t have the votes to repeal the charter of the Ex-Im Bank right now because President Obama would surely use a veto if the charter were not renewed. Neither the House nor the Senate would have the two-thirds vote necessary to override that veto, but without the Ex-Im Bank, the future could be dire for several United States companies.
Without the Ex-Im Bank, many foreign businesses and foreign nations will have a difficult time affording the loans they need to buy from me. And that concerns me. Does your company utilize the Exim Bank?
Image via www.exim.gov