Lexington Institute yesterday released a report on why reauthorization of the Export-Import Bank with a higher level of lending authority is necessary. Ex-Im, as it is called, is the official export credit agency of the federal government, and it plays a crucial role in financing exports of capital equipment like locomotives and airliners to countries with weak economic or political conditions. Such countries often cannot secure financing from private-sector sources even when they have good credit records, which is when Ex-Im Bank typically steps in to facilitate transactions. However, some legislators are upset that so much of the bank’s lending supports the products of a few companies like Boeing and General Electric. They need to understand that it costs taxpayers nothing to provide such financing because all expenses are covered by fees imposed on users. Furthermore, 80 percent of Ex-Im transactions support the exports of small and medium-size firms; even when recipients of financing are big companies, the benefits of Ex-Im Bank programs pass through to the hundreds of small companies that supply those big enterprises. Failure to reauthorize the Export-Import Bank would endanger 300,000 U.S. jobs, many of them at small manufacturers. You can read the Lexington report on Ex-Im Bank here.
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