What do you think? Leave a respectful comment.

Should Congress revive the Export-Import bank?

Last week, the U.S. Export-Import Bank’s authority to conduct new business expired. Congress is debating whether the government agency, which helps foreign companies buy American goods, should continue to exist. Is it a government giveaway, or a critical competitive tool for American business? Judy Woodruff gets one view from Rep. Brad Sherman, D-Calif.

Read the Full Transcript

  • JUDY WOODRUFF:

    From financial problems abroad to a big money debate in this country.

    Last week, the United States' Export-Import Bank hit a political wall. Its authority to conduct new business expired, as Congress hotly debates whether it should exist. The bank is a multibillion-dollar government agency that helps foreign companies buy American goods.

    Here's how that works. An American company wants to sell goods to a foreign corporation. The Export-Import Bank then gives the foreign company a loan or loan guarantee, and that company buys the goods from the American business. Ideally, the loan gets repaid, but there is a risk to taxpayers that the foreign company could default.

    Who exactly benefits? Well, last year, the bank financed nearly $30 billion worth of U.S. exports. The single largest winner? Boeing and the aircraft industry. Thousands of small businesses also gained with more than $10 billion in financing. But the 81-year-old bank faces an uncertain future.

    Some conservatives argue that it is a bloated government giveaway, while others insist it is a critical competitive tool for American business.

    Joining me now to discuss all this from Capitol Hill are two members of Congress, Democrat Brad Sherman of California, and we hope to be joined shortly by Republican Jim Jordan of Ohio.

    Congressman Sherman, thank you very much for joining us.

    Let me just begin with one of the main criticisms one hears from Republicans. And that is that the Export-Import Bank is all about corporate welfare, that something like $8 billion went, as we said last year, to Boeing and other big companies that really don't need this kind of government help.

    REP. BRAD SHERMAN (D), California: The money goes to those who are buying our products.

    By making these loans, we support tens of billions of dollars of exports and 164,000 jobs. Many of those jobs are with big employers. Others are with smaller employers, including all of Boeing's suppliers, but also up to roughly 90 percent of the bank's total transactions are with small businesses that are exporting.

    We need to support 164,000 jobs, and we can't sacrifice them in the worship of Ayn Rand, the deity of libertarianism.

  • JUDY WOODRUFF:

    But the argument is still that it's these big companies like Boeing that get the lion's chair of the money.

  • REP. BRAD SHERMAN:

    Well, Boeing doesn't get the money. The money goes to the customers.

    And you're trying to outcompete Airbus, for example. You're trying to outcompete some of the best competition in the world, world-class competition. They have their finance authorities. Germany has triple the size that we do. France, Japan, China are all using the system to get their exporters the contract. If we don't get the contract, we lose the 164,000 jobs.

  • JUDY WOODRUFF:

    Let me make another point that one hears from the critics, and that is that this Export-Import Bank is really helping just a small percent, a tiny percentage of the total exports the United States engages in, that it's a drop in the bucket and, if the bank goes away, it's not going to make much difference.

  • REP. BRAD SHERMAN:

    Well, 164,000 jobs is just a drop in the bucket to the United States economy, but we can't afford to give up one job.

    We certainly can't afford to give up 164,000 jobs. And if we abolished everything we did in Washington that created fewer than 164,000 jobs, then we would lose 1 percent of our economy here, 1 percent of our economy there, and that's — and, remember, just 1 or 2 percent unemployment rate is the difference between a healthy economy and an unhealthy economy.

  • JUDY WOODRUFF:

    The other criticism we hear, and it's related to what you just said, is that these jobs numbers are truly inflated, that they have been calculated, cooked up, so to speak, to make it look like the bank is making a big difference, when, in reality, it's not the case.

    How can you — how do you — what do you say to the opponents, to the critics who say these are not real numbers?

  • REP. BRAD SHERMAN:

    It's clear that the exports being financed support 164,000 jobs.

    Now, you can guess how many of those contracts we would have gotten otherwise, but that's like telling Ford to abandon its finance promotion and people will still buy the cars. The fact is Chevy and Toyota are offering pretty good cars as well. That's why Ford has, from time to time, export — or, rather, finance promotion. That's why the other auto companies do as well.

    And if you tell our companies we cannot have finance promotion, but the German companies will, the French companies will, the Chinese companies will, we're going to lose jobs. And that's why it's important to these 164,000 jobs that we are reauthorize an agency that makes money for the federal government, almost $700 million last year, nearly $7 billion over the last couple of decades.

  • JUDY WOODRUFF:

    And that's exactly a point that one reads the critics making, and that is they're saying that, in all, the government — the government doesn't gain from this; it ends up paying, because of the money that ends up going to the companies that could make the money otherwise, and the taxpayers end up the ones who are held liable and American taxpayers lose out.

  • REP. BRAD SHERMAN:

    The CBO is the score keeper around here.

    And we even have instant replay. We can look back over the last 20 years and see this bank has transferred almost $7 billion to the treasury. CBO says they made $700 million last year. And this is after taking into account their costs of operation and an allowance for bad debts.

    So this is a — the CBO tell us that if we abolish this agency the deficit has gone up by almost $1 billion. It's making money.

  • JUDY WOODRUFF:

    Just finally, what's your forecast? Do you think this bank is going to survive or not?

  • REP. BRAD SHERMAN:

    It needs to be resurrected at this point, and resurrections are difficult and rare.

    But I think that we will be successful. Overwhelming majorities in both the House and the Senate realize that this entity creates jobs and makes money, and that the opponents are simply clinging to this ideological, theological belief that these agencies shouldn't exist.

    And they might be right in a world in which Germany, Japan and China didn't have similar agencies. We have to compete, and that's why we need this agency to help our exporters compete with those other exporters.

  • JUDY WOODRUFF:

    Representative Brad Sherman, we thank you.

    And, as we said, we had hoped to have Representative Jim Jordan join us. We hope to talk to him in the future.

    We thank you again.

  • REP. BRAD SHERMAN:

    Thank you.

Listen to this Segment

The Latest