Supporting exports and exporting businesses in the U.S. should be a no-brainer. Exports boost our overall economy, which leads to stronger businesses and more job growth.
But Congress is currently debating the fate of the U.S. Export-Import Bank, the 80-year old institution that provides a variety of credit and financing opportunities to businesses that export. And as budget talks in Congress kick into high gear, conservative Republicans are angling to close the bank as part of the process, seeing in it an example of government waste and handouts to big businesses. The bank's charter, which expires periodically, was last renewed for two years in 2012.
Two new reports from the Department of Commerce, released Tuesday in time to add to the debate, show just how critical exports are to the economy, and in turn support claims that shuttering the bank would be really bad for business.
One report examines U.S. state trade data, and the second considers stats for top exporting cities. The former, which examines the number of jobs supported by exports by state, is Commerce's first attempt to quantify exactly how many jobs exporting businesses create.
Here's what Commerce Secretary Penny Pritzker had to say about the critical role exporters have played in the economic recovery, from a telephone news conference held yesterday about the reports:
The United States has had four straight record-breaking years of exports. We hit an all-time high of $2.3 trillion last year, which is up $7 billion from 2009. And nearly one-third of our economic growth since 2009 has been driven by exports.
In total, the state study found that exported goods directly sustained 7.1 million jobs nationwide in 2013. Exported goods include manufactured and agricultural products, natural resources, and used and second-hand products. (Exported services, which can include educational, professional, and technical skills, accounted for an additional 4 million jobs, according to the report.)
Four states led the way for goods exports, including Texas, California, Washington, Illinois and New York. Together, these states account for 43 percent of all export jobs. And manufacturing accounted for 6.2 million jobs.
A word on that last statistic. Politicians and experts of all stripes have bemoaned for decades the endless slide into obsolescence of U.S. manufacturing as developing countries, primarily China, have become factories to the world. For anyone who wants to support U.S. manufacturing, it's clear one way to do that is to support exporting businesses.
As for the specific state data, Texas is far and away the leader, creating 16 percent of the toatal number of export jobs, and 17 percent of manufacturing jobs related to exports. There's no small irony that some of Texas' politicians are leading the charge to close the Export-Import Bank, which itself directly supports more than 1.2 million jobs, according to the bank.
Among the most vocal opponents of the Ex-Im bank is Jeb Hensarling (R., Texas), chairman of the House Financial Services Committee, who says the agency wastes taxpayer money and is an example of corporate cronyism, primarily because some very large businesses such as Caterpillar and Boeing also benefit from the bank's financing programs. On Wednesday, Hensarling reportedly rejected a short-term reauthorization agreement proferred by House Speaker John Boehner (R., Ohio).
Hensarling told the conservative political blog Hot Air on Monday:
If you delve in deeply, what you will find is the U.S. companies who benefit from this tend to be some of the largest, most well-financed companies in America--like Boeing...most of these companies could finance exports on their own.
While that may be true, the Ex-Im Bank also supports plenty of small businesses lacking the same means. According to Pritzker, between 2007 and 2014 the bank helped a total of 7,409 exporters, nearly 5,000 of which were small companies. Just as critical, 60 countries around the world have export banks that support their exporting businesses. China alone has three such banks, which support more than 10 times the financing our own Ex-Im bank does.
Eliminating the Ex-Im bank would damage U.S. global competitiveness, and harm the many small businesses that depend on foreign markets to export their goods and services. Just ask Texas manufacturers about that.