Santorum: Reauthorize Ex-Im Bank

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For eight years, I served on the Senate Armed Services Committee, and never once did I hear someone suggest that the best path to world peace was for the United States to shut down its military and unilaterally disarm.  We all know how dangerous that would be, especially in today’s uncertain world.  Yet that’s exactly what happened economically when Congress let the U.S. Export-Import Bank (Ex-Im Bank) expire last month. 

The Ex-Im Bank helps U.S. companies sell the goods they make here to customers overseas by offering foreign customers loans or loan guarantees. Every U.S. president has supported the Bank since it was created more than 80 years ago because they see the benefits it provides – more jobs at home, stronger U.S. businesses and greater U.S. influence around the world.  

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For thousands of U.S. manufacturers —large and small— it's a necessary tool to compete in a global marketplace. Many deals require Ex-Im funding just to compete for a project, and more than 60 other countries have Ex-Im Banks of their own, offering deals that are often better than ours to encourage customers to buy from their country’s companies instead.  China, Russia, India, and Japan each have official export credit agencies aggressively supporting their manufacturers. Chinese ECAs have lent $670 billion in the last two years alone, more than Ex-Im has authorized in its entire lifespan.

American products may be the best in the world – but in today’s economy, that’s not enough.  You have to compete on financing, too.  Our competitors know this. A Chinese official was recently quoted as saying that the closure of the U.S. Ex-Im Bank would benefit Chinese companies.

It seems Chinese leaders understand what some of our lawmakers have forgotten: influence overseas is often measured in dollars. And it's not just influence anywhere, it's influence in developing economies where infrastructure is still young, and rules and regulations are still taking shape.

I’m reminded of the old saying, "When goods can't cross borders, armies will." Economic policy, now more than ever, is foreign policy. This isn't just an idea – we lean on economics all the time to advance our interests abroad  Earlier this year, a dozen former national security and foreign policy experts wrote Congress urging them to support the Ex-Im Bank because they understand the importance of economic influence in global relationships. By letting Ex-Im expire, we've unilaterally withdrawn ourselves from the competition, threatening our national security and our influence. It will come as no surprise that our foreign competitors are jumping for joy – the best team in the league just voluntarily forfeited.

It couldn't come at a worse time. The Obama administration has let American leadership wither over the

last two years, from fumbling on free trade to failing to join the Asian Infrastructure Investment Bank. Even worse, while we weaken our position globally, killing the Ex-Im Bank will also have the perverse effect of adding to our national deficit.  The Bank charges users a fee, and because it has such a low default rate, it turns a profit that it repays to the U.S. Treasury every year - $675 million this year and more than $7 billion over the last twenty years.  It’s the last thing a true conservative should be doing.

Unilateral disarmament never has and never will be sound foreign policy. And by stepping down from the global export arena, we’ve only created a void for others to fill, which they’re happy to do. Last week the UK and Thailand launched new initiatives to expand ECA support for their businesses, China announced a $1 billion shipping container deal, Germany closed an Airbus A380 purchase, and the list goes on.

Congress can stop the damage by reauthorizing the Bank immediately. Each day they wait only further threatens American competitiveness and influence.

Santorum served in the Senate from 1995 to 2007. He is a candidate for the Republican nomination for president.