By Zachary Mottl
Political arguments can seem abstract in Washington, D.C., but they have real consequences for small businesses that lobbyists and special interest groups should not be allowed to sweep under the rug.
Right now, a group of extreme conservatives is pushing Congress to kill a federal agency called the Export-Import Bank, which offers loans and insurance to help U.S. companies sell products overseas. They say the bank is “crony capitalism” and benefits giant corporations that do not need help.
These professional campaigners and action groups say they are aiming at government waste, but if Congress pulls the trigger, small businesses and local manufacturers will end up in the line of fire – companies like mine.
In 2018, Atlas Tool Works will celebrate its 100th anniversary of making custom parts for complex machinery at our Illinois plant. As the economy has globalized, so have we, moving into export sales made possible in part by the Ex-Im Bank.
That’s right – even a small, family owned business like Atlas depends on the bank at times. Currently, we have an Ex-Im insurance policy that reduces the risk of shipping expensive custom-tooled products out of U.S. jurisdiction and into the reaches of China. Without this policy, we’d either have to demand full payment from the buyer up front, which many potential buyers would refuse, or simply roll the dice on hundreds of thousands of dollars worth of materials and work.
Overall, nearly 90 percent of Ex-Im Bank transactions involve small- and medium-sized firms like Atlas.
Critics denounce the bank as unneeded “corporate welfare,” but that’s another poll-tested talking point that sounds good but is wrong on the facts. The bank does not subsidize anyone or offer handouts. It provides loans and insurance products for a fee, and it actually costs more to use than private lenders in most cases. That’s not “welfare,” corporate or otherwise. It’s a paid-for service.
Some claim the bank puts taxpayer dollars at risk. If that were the case I wouldn’t support it either. But Ex-Im follows conservative and highly risk-averse financial practices resulting in a negligible 0.175 percent loan failure rate. Thanks to this prudence, Ex-Im actually turns a profit and returned a $675 million surplus to the U.S. treasury last year.
If the anti-bank extremists prevail in Washington, U.S. businesses will have a harder time selling products overseas, American jobs will be lost and real people will suffer.
That’s not a talking point. It’s reality.
Zachary Mottl is the chief alignment officer at Atlas Tool Works, which the Mottl family has owned and operated since 1918. He also serves on the Manufacturing Council of the U.S. Department of Commerce.