Many of the Export-Import Bank’s biggest supporters argue the controversial agency creates jobs. But does it really?
The Daily Signal reached out to the bank’s biggest supporters—Exporters for Ex-Im, American Action Forum, National Association of Manufacturers, U.S. Chamber of Commerce and the Bankers Association for Finance and Trade—to ask whether Ex-Im creates jobs and, if so, how.
“Ex-Im supports private sector companies, big and small, that create jobs by helping them reach new market opportunities overseas,” said Lauren Airey, director of trade facilitation policy at the National Association of Manufacturers. “Without access to Ex-Im Bank, some U.S. companies would fail to meet the bid requirements for major infrastructure and energy projects—taking significant export opportunities off the table.”
The groups have partnered with a broad coalition of manufacturers to form Exporters for Ex-Im, which supports the bank’s reauthorization.
“Job creators throughout the country say the Ex-Im Bank allows them to grow and hire, and that if Ex-Im goes away, so would jobs,” the group told The Daily Signal when asked if the bank creates jobs. “When U.S. companies can grow sales abroad, they can grow jobs at home. That’s why it’s imperative for Congress to reauthorize Ex-Im now.”
Ex-Im’s charter expires June 30, and policymakers on Capitol Hill are debating whether to reauthorize it or allow the agency to wind down.
For groups supporting the agency, a common argument in favor of Ex-Im’s reauthorization is that it creates jobs.
“In fact, extending the bank’s charter is one of the best ways to create jobs and help America’s struggling small businesses,” Tom Donohue, president of the Chamber, wrote in an op-ed on Monday. “Failure to reauthorize Ex-Im over the long term would amount to unilateral disarmament in the face of $1 trillion in trade finance extended by over 60 countries.”
“It would put American exporters at a significant disadvantage in tough global markets and risk more than 150,000 jobs at 3,000 companies that depend on the bank,” he continued.
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Additionally, in an April letter to House and Senate leadership, the Bankers Association for Finance and Trade advocated for Ex-Im’s reauthorization because of its positive impact on job creation.
“Ex-Im works creatively with banks and exporters to help create and retain U.S. jobs by helping ensure that deals are not lost to overseas competition and unfair trade practices,” the letter said.
Despite repeated assertions from bank proponents that Ex-Im creates jobs, those opposing its reauthorization are quick to point out a lack of empirical evidence supporting such claims. Outside data also shows the bank has a mixed record on job creation.
“It is stunning those who say Ex-Im creates jobs are unwilling or incapable of providing any evidence to support their claim,” Dan Holler, spokesman for Heritage Action for America, told The Daily Signal. “Either way, it should be clear to everyone that Ex-Im isn’t creating jobs in America.”
Heritage Action is one of more than 50 groups calling for the bank’s end.
A 2011 report from American Action Forum did find that the bank creates jobs in specific industries. But across the economy, Ex-Im has a different impact.
“For the economy as a whole, export financing merely redistributes jobs across the economy rather than create more overall jobs,” the report said. “In addition, Ex-Im’s economic impact analysis process may be insufficient to guard against risks such as harm to U.S. industries that compete with subsidized foreign purchasers of U.S. exports.”
Similarly, a 2013 report from the Government Accountability Office found that the bank frequently references jobs “supported,” rather than “created” because its methodology makes it difficult to differentiate between jobs created and retained.
“Because of a lack of reporting on the assumptions and limitations of its methodology and data, Congressional and public stakeholders may not fully understand what the jobs number that Ex-Im reports represents and the extent to which Ex-Im’s financing may have affected U.S. employment,” the report stated.
At a joint congressional hearing last month, Rep. Mick Mulvaney, R-S.C., pressed Ex-Im Chairman Fred Hochberg on the claim that the bank “creates jobs.”
Mulvaney referenced concerns voiced by House Speaker John Boehner on the consequences of Ex-Im’s end.
“There are thousands of jobs on the line that would disappear pretty quickly if the Ex-Im Bank were to disappear,” Boehner, R-Ohio, told reporters.
When Mulvaney asked Hochberg about the “thousands of jobs on the line,” the bank chairman argued the agency was “demand driven,” which prevented him from predicting how many jobs would “disappear” because of Ex-Im’s end.
Mulvaney, though, contended that even if Congress allowed Ex-Im’s charter to expire, existing financing would not be effected through the life of the loans and loan guarantees.
“If you disappear on June 30, there’s still going to be Export-Import Bank presence, supporting jobs for the next 18 years,” the South Carolina Republican said.
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