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Spokane, Washington  Est. May 19, 1883

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Editorial: Congress should reauthorize jobs-maker Ex-Im Bank

The Spokesman-Review

Reauthorization of the U.S. Export-Import Bank should be high, if not first, on the congressional agenda when members return next week. The bank’s charter expires at the end of this month, and killing an institution that supports more than 200,000 jobs – 85,000 in Washington – makes no sense.

Unfortunately, the bank practically defines the fracture line between establishment and tea party Republicans.

The divide is so deep that businesses, led by the U.S. Chamber of Commerce and National Association of Manufacturers, may have to rely on Democrats to get the legislation they need.

Which is the point, the tea party wing would argue.

Texas Rep. Jeb Hensarling, chairman of the powerful House Financial Services Committee, condemns the bank for alleged “crony capitalism” because the biggest loans or loan guarantees the bank makes available to foreign buyers of U.S.-made goods benefit companies like Boeing and Caterpillar. No disputing that, but 90 percent of loans go to smaller businesses, including many in the Spokane area. Their lenders often want the extra measure of security Ex-Im support provides.

Hensarling argues conventional banks can handle the business, but when those institutions would not or could not extend the huge credits necessary during the recession, Ex-Im Bank became a mainstay. Commitments nearly doubled between 2008 and 2013 to $108 billion. Volume fell last year, presumably because other lenders were stepping up.

The Ex-Im Bank, by the way, is profitable, returning more than $1 billion to the U.S. Treasury last year.

President Barack Obama, once a bank critic, has asked for a five-year extension of the bank’s charter and a boost in its lending limit to $160 billion. Other proposals have surfaced with lower limits, tighter restrictions on the risk the portfolio can carry, and more transparency for an entity that has been somewhat aloof from accountability.

Reauthorization used to be a gimme before it got snarled in ideological feuds. Now, with time so short, the odds of thoughtful reforms getting a full debate are slim. The sooner the parameters of an agreement are set, the more thorough a review can be.

The worst idea out there, and one that may well be imbedded in whatever compromise emerges, is a temporary fix – one that gets Congress past the election and possibly into a session in which Republicans command the House and Senate. Banks that need resuscitation month by month or year by year are not good business partners for either buyers or sellers.

There’s also the chance reauthorization could be part of another spending bill that could lead to another flirtation with a government shutdown. Again, a bad idea.

House Speaker John Boehner has been noncommittal on charter renewal, but he’s been taking heat from his many constituents who work for a General Electric aerospace subsidiary.

Rep. Cathy McMorris Rodgers also has demurred, the only member of Washington’s 12-member congressional delegation to do so. But this is not a “maybe” issue for Eastern Washington or the companies and employees who rely on the bank.