Our organization has been fighting hard to make Colorado the strongest place for business in America. So when Business Insider ranked Colorado the No. 1 economy in the country — based on its strong state GDP, high wages and exports — we pinned the article up on the wall in our offices. It hardly means our work is done, but it’s one measure of the pro-growth policies our state leaders have implemented to encourage growth and create jobs.
Yet, politics in Washington now threaten to upset the fine-tuned economy we’ve worked to build here in Colorado. An inside-the-beltway political campaign could cost Colorado companies hundreds of millions of dollars worth of annual exports and undermine our critical aerospace and agricultural industries if it succeeds in convincing Congress to abolish an obscure 80-year-old federal agency known as the U.S. Export-Import Bank.
Since the Great Depression, the Ex-Im Bank, as it’s called, has provided modest financing or insurance for U.S. exports when private financing isn’t available. That enables companies, particularly small businesses, to export even when they don’t have the scale it would otherwise take to reach customers in areas like Africa or the Middle East that count as some of the fastest growing markets in the world. Although it accounts for a small percentage of U.S. exports, Ex-Im is particularly important during economic downturns. A few years ago, it enabled U.S. exporters to continue selling overseas even when global credit markets contracted. It prevented the Great Recession from being even greater and has helped Colorado recover jobs lost during the economic downturn and get our economy back on track.
Ex-Im’s numbers speak for themselves. Over the last several years, it has supported more than $300 billion in U.S. exports, including $823 million here in Colorado. Ex-Im has been particularly critical for small businesses, which make up roughly three out of four of the companies in Colorado helped by Ex-Im. Small high-tech computer manufacturers particularly benefit from Ex-Im, along with Colorado’s strong ranching community and our unique aerospace industry. Exports are critical to our continued economic growth and support high-paying jobs in skilled industries that represent the future of Colorado’s economy.
But since June 30, American companies have been cut off from using Ex-Im’s vital services. And last month, despite a bipartisan super majority of supporters in the Senate, House Speaker John Boehner decided not to consider Ex-Im reauthorization prior to the summer recess.
In an increasingly competitive global economy, Congress should be making sure American companies have a fair shot at winning overseas business.
But Ex-Im’s critics disagree. Opponents give several reasons for why they need to shut down the bank, all of which are based on bad information.
Critics say Ex-Im risks taxpayer dollars. Actually, Ex-Im has a much lower default rate than commercial banks, currently hovering at less than a quarter of 1 percent. In fact, Ex-Im typically collects more in interest and fees than it costs to run. Over the last two years, it paid more than $1.7 billion to the federal government to help reduce our deficit. Some have challenged this accounting, arguing that under a different standard (assuming taxes that Ex-Im doesn’t pay, and risks it doesn’t assume) it wouldn’t actually make money, at least on paper. But even these critics don’t argue with Ex-Im’s actual balance sheets — it pays for itself and returns a profit.
Critics also allege Ex-Im represents an improper government intrusion into the private market. They say without Ex-Im, private banks would step in. Yet,
Ex-Im only finances an export when commercial financing isn’t available. Without Ex-Im, American exporters simply wouldn’t be able to close these overseas sales. In the weeks since Ex-Im expired, we have seen American firms losing business to foreign competitors everyday.
As Congress prepares to conclude its August recess, we hope Speaker Boehner and our Colorado delegation will take time to listen to the small business owners whose companies are hurting without Ex-Im. We hope the House will schedule an up or down vote on the issue as soon as members return to Washington. Thousands of jobs in Colorado depend upon it.
Morgan Cullen is executive director of Accelerate Colorado, a partnership between business and local governments that works with Congress and federal leaders on issues critical to Colorado’s economic development, top industries and business community. For more information, visit the Web site located at www.acceleratecolorado.com.