Shortly after Labor Day, the U.S. Senate will reconvene for a session before the November elections. In those few weeks, the Senate Committee on Banking, Housing and Urban Affairs could begin the process that could help create thousands of American jobs, unleash billions in economic opportunity, and return hundreds of millions of dollars to the taxpayers.
How is this possible? The leaders on this committee need only vote to confirm Mark McWatters to be a member of the board of directors of the Export-Import Bank of the United States.
From July to December in 2015, the Export-Import Bank – America’s official export credit agency – had no charter under which to operate. As a result, the Ex-Im Bank in fiscal 2015 enabled only $17 billion in exports, supported approximately 109,000 American jobs and returned about $431 million to the treasury. The year before, the Ex-Im Bank enabled $27.5 billion in exports, supported 164,000 jobs and returned $675 million to the treasury.
Here in Central Massachusetts, the Ex-Im Bank has helped a number of businesses – most of them small to mid-sized manufacturers – to grow. In the 2nd Congressional District alone – which includes Worcester and many of the surrounding communities – 14 companies received insured shipments, guaranteed credit or disbursed loans totaling $73.7 million from the Ex-Im Bank between 2011 and 2016. This support resulted in $200.3 million worth of exports from these companies.
Many believed when the long-term reauthorization of the Ex-Im Bank’s charter was enacted into law last December, the bank would be able to return to its prominence in export promotion. However, the lack of a minimum three-member quorum on the Export-Import Bank board limited the bank’s ability to approve transactions over $10 million.
A three-person quorum would alleviate this concern, but for more than six months now, the nomination of McWatters – a Republican nominee to fill the pivotal third slot on the board of directors – has been held-up in the banking committee. A vote on his nomination is not currently on the committee’s fall schedule.
In June, the Ex-Im Bank released its annual assessment of its competitiveness as it relates to similar agencies from around the world. This 2015 report notes “in the aftermath of the 2015 lapse in authority and the ongoing uncertainty surrounding the board of directors, [the Ex-Im Bank] continues to decline in competitiveness.”
Against this backdrop, the report states others from around the world are expanding involvement in promoting exports. Indeed, the report indicates China has increased its trade-investment support by 13 percent while its Ex-Im Bank equivalent is expected to increase its activity in Africa alone to at least $1 trillion over the next decade.
Exports are an integral part of our economy, and businesses should be able to rely on the Ex-Im Bank when regular financial backing is unavailable. Congress asserted that belief when it approved a renewal of the Ex-Im Bank’s charter last year; the Senate should follow-up and approve McWatters’ nomination. In so doing, they would unleash the economic opportunity of the Ex-Im Bank.
James T. Brett is the president & CEO of The New England Council, an alliance of businesses, academic and health institutions, and public and private organizations throughout New England.