There is a fight raging in Congress right now over the future of the Export-Import Bank. Not many people are familiar with this small federal agency, which provides loans and insurance to help American companies sell their products overseas. But it is vital to our economy and supports the industries, technologies and services that are important to America’s national defense as well.
For example, my company, Ventech Engineers International, designs and builds small oil refineries at our plant in Texas. We then export these largely pre-built facilities all over the world, supplying desperately needed fuel to some of the most impoverished and remote areas of the globe.
Right now, our refineries are at work at three locations in the Kurdish area of Northern Iraq, processing almost 400,000 barrels of crude oil a day to fuel America’s most vital and reliable ally in the region. It is no understatement to say that this oil is one of the foundations of the Kurds’ fight against ISIS. The U.S. Consulate in Erbil, the Kurdish capital city, told us a few years ago that Ventech does more business in Iraq than any other private company – and we are extraordinarily proud of our small part in the effort to stabilize this region and support the struggle against the ISIS terrorists.
Most of the discussion of the Ex-Im Bank deals with economic issues like the 150,000 American jobs that are attributed to the bank each year and its impact on America’s GDP. Critics focus on ideological slogans like “crony capitalism” or the true but irrelevant point that government shouldn’t “pick winners and losers” in the market. (Ex-Im does no such thing.)
But here’s a far more relevant fact — if Ex-Im shuts down at the end of June, we will not be able to build a critically-needed $300 million facility to supply fuels required for the fight against ISIS. In the longer term, America’s central role in the rebuilding of Iraq and the development of the entire region will be put at risk as foreign firms — fiercely backed by their own big-spending governments — rush in to seize business that right now is going to American companies backstopped by the Export-Import Bank. And the loss of those projects will also represent lost future business to support and maintain those American-supplied facilities for decades.
That loss will have painful economic consequences, as export-oriented businesses pull back and American export workers lose their jobs by the tens of thousands. It will put in motion a costly “brain drain” as key export fields like aerospace, oil services and precision machinery all shift overseas. Last year, Ex-Im supported nearly $30 billion in U.S. exports, all of which would be lost to U.S. business if the bank’s attackers have their way.
But the stakes are higher still. We learned during the Cold War how the spread of U.S. culture, products and businesses around the globe enhances our global strength. Anyone who sees America’s free and open economic system at work ends up wanting to join with us, to take our side. Withdrawing from global economic engagement as the bank’s critics would have us do would dangerously undermine this vital outreach tool.
Bank critics are willing to sacrifice these interests because they believe any effort by the government to help American private industry succeed is an improper interference in the marketplace. But the bank is governed by strict regulations that forbid it from competing with the private sector and anyone who wants to use its services must show that no commercial alternative exists. And this is often the case, especially in destabilized regions like the Middle East.
The charge of “corporate welfare” is even more far-fetched. Like any bank, Ex-Im charges interest and fees for its services, at market rates according to independent accountants. In fact, the bank actually pays for its own operations out of these fees, and in some years even runs a surplus. In 2014, it returned more than half a billion dollars to the U.S. Treasury.
As a businessman, I don’t have the luxury of debating fine points of ideology. All I know is that for every export we make to Iraq, Kazakhstan or Western Africa, there is a long line of foreign competitors hungry to replace us — and most of these are backed by export credit from their own governments that are up to ten times more than anything Ex-Im provides. The bank’s conservative critics in Congress would never support unilateral disarmament for our military; why on earth are they pushing to unilaterally disarm our economy in this way?
Right now Texas politicians like Sen. Ted Cruz and Rep. Jeb Hensarling are leading the push to shut down the Ex-Im Bank. I urge them to reconsider and stand up for U.S. business and American strength by reauthorizing the Export-Import Bank.
Kevin Stanley is CEO of Ventech Engineers International. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
