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What is Senate Bill S. 819?

This bill would reauthorize the Export-Import Bank through September 2019, and reforms both its management hierarchy and the policies that it operates under.

A Risk Management Committee would be established, and a Chief Risk Officer position would be created -- both of which would provide oversight of the Bank’s operations. Also, a Chief Ethics Officer would oversee ethics practices among Bank employees.

The Bank’s lending cap would be reduced from $140 billion to $135 billion, and the minimum share of small business-related activity would rise from 20 percent to 25 percent. There would be independent audits of the Bank’s portfolio, and the Bank would be required to increases its reserves held for losses.

Any profits generated by the bank’s lending activities would be returned to the Department of the Treasury to be used in deficit reduction.

Officials at the Ex-Im Bank would be prohibited from discriminating against any energy source in the course of their work -- including coal. This provision negates existing policies that had been adopted to prevent the financing of overseas power plants that don’t adopt greener technologies.

The Treasury Secretary and the President would be directed to enter into international negotiations to eliminate export credit financing within 10 years of this bill’s enactment.

Impact

Businesses utilizing the Export-Import Bank, the Export-Import Bank, the Department of the Treasury, Congress, and the Secretary of the Treasury.

Cost of Senate Bill S. 819

A CBO cost estimate is unavailable.

More Information

In-Depth: This bill was introduced with bipartisan support from four Democratic and four Republican Senators. Sen. Mark Kirk (R-IL), the lead sponsor, praised the inclusion of “over a dozen reforms” that brought the coalition together. Sen. Joe Manchin (D-WV) cited the Bank’s facilitation of $37.4 billion in exports in 2014, while Sen. Lindsey Graham (R-SC) pointed out that “China’s export credit agencies financed more last year than the United States, Germany, Canada, and the United Kingdom combined.”

The Export-Import Bank (or Ex-Im Bank) has been criticized as corporate welfare because several of of the companies that benefit the most from its existence are among the largest corporations in the U.S. About 40 percent of the Ex-Im Bank’s 2014 authorizations benefited Boeing alone, and nearly two-thirds of the Bank’s 2013 money went to 10 U.S. companies that include General Electric, Caterpillar, and Ford along with Boeing. Of the $2.3 trillion that the U.S. exported in 2013, the Ex-Im Bank only approved $27.3 billion of loan guarantees for those which amounts to about 1.2 percent of the value of that year’s exports.

Proponents of the Ex-Im Bank point out that nearly 90 percent of the Bank’s total transactions involved small businesses, and in 2014 those transactions were valued at about $5 billion, making up around 20 percent of the total value of the Bank’s activity that year. It has also been noted by the Bank’s supporters that these activities supported over 160,000 U.S. jobs in 2014.

Of Note: The Export-Import Bank was reauthorized in September 2014 for nine months, meaning that it is due to expire on June 30, 2015. In addition to doubts about the Ex-Im Bank’s benefits, it has been maligned for its cost -- its price tag was estimated at $2 billion between 2015 and 2024 by the Congressional Budget Office.

Doubts about the long-term survival of the Ex-Im Bank date back at least as far as December 2011, when the White House drafted a contingency plan to be put into place if Congress failed to authorize the Bank’s appropriations during that budget cycle.

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