For those in the manufacturing community, one of the significant events of the summer was when Congress allowed the authority of the Export-Import Bank of the United States (Ex-Im) to lapse. The main goal of the bank is to provide financing to allow for the export of U.S. products, including working with private banks to help secure financing for overseas sales. The result of this inaction, as reported by the Bank itself, was that “as of midnight on June 30th the Export-Import Bank of the United States (Ex-Im) ceased processing new applications or engaging in new business.”
Over the past few months, a firestorm of controversy has ensued. Groups such as the National Association of Manufacturers (NAM), the U.S. Chamber of Commerce, and large companies such as Boeing have voiced their displeasure with the failure of Congress to re-authorize the bank. Others claim that the Bank is simply a pathway for large corporate welfare. In this Wall Street Journal article, an opponent of the bank opined that “The Congressional Budget Office reported in May that Export-Import Bank programs, if subjected to the fair-value accounting methods required of private banks, actually operate at a deficit that will cost taxpayers some $2 billion over 10 years, in addition to the bank’s operating costs.”
As Congress comes back from its summer recess, the stakes continue to be high and this issue bears watching by manufacturers and distributors of all sizes — particularly those that export products. We will keep you posted of any developments.