Correction: An earlier version of this editorial misstated the percentage of U.S. exports backed by the Export-Import Bank.
The failure of Congress to reauthorize the Export-Import Bank would be a philosophical victory for some but a badly timed blow to Kansas companies trying to compete in the global marketplace.
The obscure Depression-era program, which guarantees loans and provides credit insurance to overseas buyers of U.S. exports, has become a target of the tea party and other conservative entities, including the Koch-backed Americans for Prosperity. The critics have seized upon some legitimate problems to declare the bank hopelessly corrupt corporate welfare that needs to go away. Heritage Action for America claims the bank’s contribution to U.S. exports is negligible because 98 percent of the nation’s exports aren’t backed by it, but 62 Kansas companies have used Ex-Im services since 2007 to support $1 billion in exports, most of them in the Wichita area. That’s significant support that would be missed in Wichita, which was called by the Brookings Institution’s Global Cities Initiative “the most export-intensive metropolitan area in the United States.”
And though many critics mention the Ex-Im Bank in the same breath as Boeing, nearly 90 percent of the bank’s transactions last year were with small U.S. businesses. A recent Eagle article by Molly McMillin highlighted aviation supplier Clearwater Engineering, which does a lot of work for Boeing and is growing accordingly, and Great Plains Manufacturing in Salina.
Never miss a local story.
As Karyn Page, president and CEO of Kansas Global Trade Services, has written, “banks in the private sector do not provide export credit in these types of transactions, either because they are unable (not big enough, not enough or the right global banking relationships) or don’t want to accept the global risks and challenges inherent in an export transaction.”
It’s not safe to assume that private banks would step in if the Export-Import Bank were closed, either. Instead, the U.S. would throw away a tool that helps companies compete in a global economy in which dozens of other countries have export credit agencies and aren’t afraid to use them.
As it tests whether Congress can do anything anymore, the looming Ex-Im Bank vote will indicate whether Rep. Mike Pompeo, R-Wichita, can put parochial needs and pragmatism ahead of his limited-government ideology. He voted against reauthorization in 2012, and his staff has said he hasn’t yet decided about next month’s vote. (Sens. Pat Roberts and Jerry Moran, R-Kan., both voted “yes” last time; Roberts is now among those calling for reforms, which are needed. Rep. Tim Huelskamp, R-Fowler, is a certain “no,” wrongly casting the issue as one of Wall Street versus Main Street.)
If Pompeo is listening to the businesses in his district, and understands the potential power of exports to resuscitate the Wichita-area economy, he will not only support reauthorization this time but fight for it.
For the editorial board, Rhonda Holman