County Behind Effort to Keep Export-Import Bank Alive

Riverside County officials have joined representatives from counties throughout the United States in urging Congress to support renewing the Export-Import Bank's charter, despite criticism that the federally backed institution has become an instrument to promote corporate welfare.

"Reauthorization of Ex-Im Bank is in the best interest of every county in the country, especially those who want to help their small, medium or large businesses grow and want to create and retain jobs," said Riverside County Foreign Trade Commissioner Tom Freeman.

He and Supervisor John Benoit attended the annual meeting of the National Association of Counties in New Orleans over the weekend. At that meeting Riverside County and Franklin County, Ohio, jointly drafted and won unanimous approval of a resolution advocating that Congress reauthorize Ex-Im's federal charter, which expires Sept. 30.

"Ex-Im Bank has been of great assistance to our local business in Riverside County ... In fact, every loan or underwriting service in our county and its 28 cities went to companies with fewer than 41 employees," Benoit said.

The 80-year-old Ex-Im Bank provides loans, loan guarantees and credit insurance to U.S.-based exporters, as well as overseas firms that intend to purchase products manufactured in the U.S.

The bank issued $37 billion in loans and other forms of credit in 2013. According to its website, Ex-Im extended financial assistance to 7,400 U.S.- based exporters between 2007 and 2013, with total export-supported activity valued at $236 billion.

The bank increased its presence in Riverside County after forming a partnership with the Office of Foreign Trade in 2011. According to Freeman, the majority of the bank's customers are small businesses that have been unable to secure financing elsewhere for expansion into overseas markets.

But critics characterize the bank as a Great Depression-era concept that now lacks justification. The institution has been assailed as a welfare facilitator that, with its federal charter, can provide fat loans to questionable recipients -- with the American taxpayer footing the bill if a borrower defaults.

William Shughart, a research fellow with the Bay Area-based Independent Institute, a think tank that supports smaller government, wrote earlier this month that the bank has functioned as a silent partner for overseas ventures by such corporate giants as Boeing, Ford Motor Co., John Deere and Merck.

Shughart compared the Ex-Im Bank to mortgage behemoths Fannie Mae and Freddie Mac before they went belly up and required a taxpayer bailout.

The Airline Pilots Association and Delta Airlines have been at odds with the bank over its loans to foreign carriers purchasing U.S.-made aircraft, saying the overseas buyers are essentially receiving subsidies that put American carriers at a disadvantage.

The bank has also stirred anger among environmentalists and union interests over its underwriting $694 million in loans for a mega mining operation in Australia. Opponents say the enterprise will damage the Great Barrier Reef and deal a blow to U.S. steel and iron workers competing for business that the Australian iron-ore pit will take away from American shores.

– City News Service.