WASHINGTON: Congress failed this week to reauthorize the charter of the largely unknown Export-Import bank, a government agency that subsidizes the foreign buyers of US made products. Opponents say it distorts the market and shouldn’t be renewed, but President Obama says that America will lose jobs without it.
Congress failed to reauthorize the charter of the 80-year-old Export-Import bank, a government agency that subsidizes the foreign buyers of US made products.
While that detail alone may not be an attention grabber, the fact that Republican lawmakers have launched a full-scale attack against the bank is indicative of a larger argument in Washington, the outcome of which could determine how involved the government gets in the economy, and ultimately, how the US labor market fares in the future. In the end, it’s all about jobs.
The “Ex-Im” as insiders call it, was ordered by Franklin Delano Roosevelt in 1934 as away to close financing gaps in large sales of US goods to buyers overseas when private lenders are unable or unwilling to take on the financial risk.
In 2013, for example, the bank authorized around $27 billion to subsidize foreign buyers of US products, guarantee their private-sector loans, and insure them against risk, according to its annual report.
