Today, I voted to protect Georgia jobs and American competitiveness by reauthorizing the Export-Import Bank. With two of the fastest growing ports in the nation, robust exports in general and a strong Export-Import Bank specifically are of great importance to the First District and the State of Georgia.
Outside special interest groups, the media, and others have distorted the role and impact of the Export-Import Bank. While there is not a single federal agency that is not in need of reform, shuttering the Export-Import Bank puts thousands of jobs in the First District and across the country in jeopardy by putting American companies at a competitive disadvantage against our global competitors.
What is the Export-Import Bank?
The Export-Import Bank of the United States is the official export credit agency of the U.S. government. Its mission is to assist in financing and facilitating U.S. exports of American-made goods and services to support U.S. employment. The Ex-Im Bank helps to level the global playing field and is vital to ensuring American businesses can compete in emerging markets and around the world.
The Ex-Im Bank operates under a renewable general statutory charter and Congress failed to renew the charter before it expired on July 1, 2015. As a result, the Bank's statutory authorities have expired.
Why is the Export-Import Bank important?
While the government cannot create the kind of jobs we need for growth and prosperity, it can create an environment conducive to opportunity and job creation. That is exactly the mission of the Ex-Im Bank and its done a good job thus far: since 2009, the Ex-Im Bank has supported 1.3 million American private-sector jobs, supporting 164,000 jobs in last year alone.
In our district, the Ex-Im Bank facilitates exports for 17 companies, more than half of which are small businesses, $501 million in exports and 3,208 jobs. This includes companies like Gulfstream and Great Dane in Savannah, Dozier Crane and JCB Americas in Pooler, and Industrial Insulation, Pinova, and Holland Pump in Brunswick.Around Georgia, these numbers jump to more than $4 billion in exports from 205 companies supporting 29,855 jobs.
The fast-growing Ports of Savannah and Brunswick position the First District and the State of Georgia to benefit from trade more so than most. In 2014, 209,071 Georgians were employed by 14,563 companies in Georgia exporting a total of $39.4 billion worth of goods.
Second, the Export-Import Bank plays a key role in the success of small businesses in the United States. In fiscal year 2014, nearly ninety percent of Ex-Im Bank transactions directly supported small businesses. Small business exporters need certainty and protection to tackle new markets, expand, and create jobs. American Action Forum estimates that 1,077 deals across the country have been lost due to Ex-Im’s lapse. Small businesses have borne the brunt of these losses as 917 of the loans would have gone to small businesses.
Finally, every industrialized country in the world has an equivalent to the Ex-Im Bank. Eliminating ours wouldn't level the playing field. Instead, it would put American companies at a disadvantage with their international competitors. If Ex-Im isn’t reauthorized, Washington is telling the world that we don’t want to do business with you.
I’ve heard some say that the Bank is corporate welfare. Is that true?
Ex-Im is absolutely not corporate welfare. Companies pay fees for the insurance they purchase and Ex-Im actually returns money to the U.S. Treasury. In fact, the Ex-Im Bank has returned more than $2.7 billion to taxpayers over the last six years. It does so largely by charging loan fees to its foreign customers.
One of my top priorities in Congress is ensuring taxpayer dollars are protected. When it comes to the Ex-Im Bank, there is no advantage for the taxpayer to eliminate the Ex-Im bank. Instead, failing to reauthorize the Bank would only result in job loss.
Does the Bank need reforms?
Yes, the Ex-Im Bank needs reforms and I pushed for reforms that go further than the legislation passed in the House. However, the Bank has been expired for too long and irreparable damage has been caused on American jobs and American job creators. While it does not go as far as I believe it should, H.R. 597 provides critical reforms necessary to ensure taxpayers are protected while allowing the Bank to do its important work.
The Reform Exports and Expand the American Economy Act:
- Limits taxpayer exposure: Lowers the Bank’s borrowing cap for the first time and requires higher loan loss reserves to protect taxpayer funds.
- Puts greater focus on small businesses: Increases the amount of Bank lending to small businesses from 20% of all activity to 25%, and ensures that the Bank consider small businesses that grow into medium-sized enterprises.
- Combats fraud and ethical misconduct: Creates a non-political Chief Ethics Officer to oversee ethics practices of Bank employees.
- Strengthens risk management and transparency: Creates a Chief Risk Officer and a Risk Management Committee to oversee the Bank’s risk exposure, and requires the Inspector General to audit the Bank’s risk management procedures regularly.
- Gives the Board more power and reduces politicization: Gives greater authority to Board members in overseeing the Bank’s risk exposure, and requires Board approval of the President of the Bank’s appointees for Chief Ethics Officer and Chief Risk Officer.
- Brings the Bank into the 21stcentury: Requires the Bank to accept electronic payments and allows for critical technology infrastructure upgrades.
- Explores a promising private sector alternative: Allows the Bank to introduce a reinsurance pilot program that could shift risk exposure from taxpayers to the private sector.
- Requires the President to pursue a global end to export credit financing: Requires the President of the United States to submit a strategy for ending government-supported export subsidies internationally.
What happens here at home if the Bank isn’t reauthorized?
Short and simple – jobs are lost.
Gulfstream Aerospace employs more than 10,800 people working at facilities in Georgia. Since the Bank has expired, they have lost two contracts, including a sale for a G450 to a client in Europe that instead bought Dassault Aviation out of France. All of Gulfstream’s competitors are foreign companies: Bombardier in Canada, Dassault in France, and Embraer in Brazil. Loss of business will continue to happen without the reauthorization of the Export-Import Bank. For example; say Gulfstream won an order for eight aircrafts from a foreign customer because Ex-Im provided a loan guarantee to the customer’s bank. Without Ex-Im, that sale will go to one of Gulfstream’s foreign competitors and take work away from American employees.
The Export-Import Bank is also essential for Strength of Nature in Savannah. In the 15 years since their founding, Strength of Nature has grown through hard work, innovation and entrepreneurship to a company of $90 million in sales, employing over 250 people in their Savannah plant and warehouse. Recently, they experienced tremendous international sales growth with over 25% growth each year for the past five years. These sales could not have been possible without the credit insurance services of the Ex-Im Bank.
Without the Ex-Im bank, it is possible that half of their local jobs would be lost. Approximately 50% of Strength of Nature’s sales are directly attributable to export sales, and these sales support 50% of their workforce of 250 employees.
If a company cannot get financing because the Export-Import Bank wasn’t reauthorized to buy a Gulfstream made in Savannah, they’ll go to France to buy from Dassault Aviation. If they can’t get a Caterpillar excavator made in Athens, they’d go to Japan to buy a Komatsu. If they can’t get access to an AgCo tractor headquartered around Atlanta, they’ll go to India to buy a Mahindra.
Click here to view my speech on the floor of the United States House of Representatives explaining the critical need to reauthorize the Bank.I refuse to sit idly as these jobs, and many others, are lost due to Washington’s failure to act.
While I hope this has helped you understand my vote and the importance of the Ex-Im Bank, you don’t have to take my word for it. Take a few moments to read the testimonies of job creators in Georgia on the irreparable damage failure to reauthorize the Bank will have on our local economy, Georgia, and the entire nation.
Click here to view Larry Flynn, President of Gulfstream Aerospace, explain that the Ex-Im Bank “protects quality jobs right here in Georgia.”
Click here to see Mario De La Guardia, President of Savannah-based Strength of Nature, explain the necessity of the Export-Import Bank to their local business.
Click here to see Chairman and CEO of AGCO, an agricultural equipment manufacturer headquartered in Duluth, explain that “if Ex-Im Bank isn’t reauthorized, ‘the signal Washington would send to the world is, ‘We don’t want to do business with you.’”
The First District, as well as the entire nation, needs the Export-Import Bank. If you have any other questions or concerns, please do not hesitate to contact my office.