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The Export-Import Bank, Explained in Gifs

What’s the hullabaloo over the Export-Import Bank about?

On October 27, the House of Representatives voted to reauthorize the Export-Import Bank. And if that news means basically nothing to you, don’t worry. The Ex-Im Bank, as it’s affectionately (or not so affectionately) known isn’t usually front-page news. But since hardline Republicans refused to renew its charter this past summer, the bank has been getting way more attention than it’s used to.

So, what exactly does the Export-Import Bank do?

PANEL-1Byrd Pinkerton, Elizabeth Scheltens

For small businesses, it can be tough to get a regular bank loan to export goods to risky countries.

Let’s say a small company wants to expand and start shipping somewhere like Afghanistan or Indonesia. If they can’t be totally sure they’ll get paid for that shipment, they might not be able to get a loan, or the interest rate on that loan might be really high.

The Export-Import Bank gives businesses low-interest loans, or loan guarantees, so that they can export to those riskier countries. This helps American businesses ship goods all over the world.

Why do some people like it so much?

PANEL-2-1Byrd Pinkerton, Elizabeth Sheltens

Nearly ninety percent of the businesses that get loans from the Export-Import Bank have fewer than 1,500 employees. The Bank makes it much easier to grow a small business–and that means more jobs.

Also, while the Ex-Im Bank makes less money on its loans than it would if it made those loans at normal interest rates, it’s still projected to gain around $14 billion dollars in the next decade, according to the Congressional Budget Office.

So what’s not to like?

Yes, almost ninety percent of the businesses that get loans and loan guarantees are small. But those small businesses are not getting 90% of the financial assistance. They’re actually getting closer to 50% of the benefits , with the other 50% going to just 10 mega-corporations.

PANEL-3-1Byrd Pinkerton, Elizabeth Scheltens

Between 2007 and 2014, more than thirty percent of total benefits went to Boeing alone.

Opponents of the Ex-Im Bank argue this is “corporate welfare.” These big companies could still export goods without the bank’s support – it would just be more expensive. But beneficiaries argue this could cost jobs. Boeing says it would have to lay people off to make up the cost of losing its Ex-Im benefits.

Ok, so what did Congress do again?

Every few years, Congress votes to renew the Ex-Im Bank’s charter. This isn’t usually a big deal. In 2012 it passed with broad bipartisan support.

But this year, a group of Republican members of the House of Representatives said they would vote against reauthorization. The bill never came up for a vote, and the charter expired on June 30.

Many of the Republicans who threatened to vote against the bank’s charter are members of a group called the Freedom Caucus. It’s a group of representatives who try to push the party rightward on fiscal and social issues.

The fight over the Export-Import Bank is interesting because it gives us some insight into the GOP’s internal tug-of-war. Conservative members of the Freedom Caucus oppose the bank, while more moderate Republicans support it.

PANEL-4Byrd Pinkerton, Elizabeth Scheltens

Almost four months after the charter was allowed to expire, one of those moderate Republicans decided he’d had enough. Tennessee Representative Stephen Fincher teamed up with other moderate Republicans and most House Democrats to force the re-authorization bill to come to the floor for a vote.

On October 27th, the bill passed, 313-118. The Export-Import Bank is back in business.

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