Congress has temporarily reauthorized the Export-Import Bank by passing a continuing resolution that included a provision extending the Bank’s charter to the end of June 2015. The bill now heads to the White House for the President’s signature.
By passing the CR before October 1, Congress avoided both a government shutdown and closing the Export-Import Bank that supported over 200,000 jobs last year. However, the funding in the CR will last until December 11, and the Bank’s extension will end July 1.
The continuing resolution received support from both parties. The Senate approved the measure 78-22, while the House passed the bill 273-156. Appropriations committees are working to produce an omnibus bill, which will set funding levels for the remainder of the fiscal year, and pass it during the lame duck session.
Importance of the Export Import Bank
Between now and next June, Congress must find a longer-term solution for the Ex-Im Bank. The United States is one of 60 countries to support exports through an export-credit agency (ECA) and ranks sixth in terms of total support amongst those nations, according to the National Association of Manufacturers and Economist Intelligence Unit.
The Bank supports many businesses through its direct loan, working capital and loan guarantees, export insurance programs, and acts as a backer for trade financing that commercial banks are unable or unwilling to take on alone. Many of Bank’s deals use the private sector as a partner, and it does not compete with the private sector.
The Bank also operates at no cost to the taxpayer, as it was designed to be self-sufficient. In fact, it generated $1.3 billion in profits of last year, which were sent to general fund.
The Need for a Long Term Solution
With the Ex-Im Bank’s future up for debate again in June, many of its customers will have to obtain trade financing without a guarantee of the Bank’s support in future years. They may lose contracts because of this uncertainty. In a recent call with Business Forward, the Bank’s Chief of Staff Scott Schloegel described how one exporting business in the U.S. lost a trade deal because a competitor could guarantee backing from the South Korean ECA. Businesses thrive with long-term planning, and the Ex-Im Bank will need to have the same if the partnership is to be most successful.