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U.S. Exporters Endorse Ex-Im Bank Accounting Change
Date: 2/5/2007
Written By: Bill Reinsch, NFTC, 202-887-0278 and Edmund Rice, CEE, 202-296-6107

Two leading organizations representing major U.S. exporters today endorsed a proposal by the Bush Administration to change the federal government’s accounting for the U.S. Export-Import Bank.  The proposal is contained in the President’s FY 2008 budget, which was delivered today to Capitol Hill.  Implementing the accounting change will require approval by Congress.

 

The two organizations are the Coalition for Employment Through Exports (CEE) and the National Foreign Trade Council (NFTC).  CEE represents some 30 U.S. exporters, banks and industrial associations and specializes in issues related to export finance.  NFTC represents 500 export companies, banks and others involved in global trade and investment.  It is the oldest U.S. international trade organization.

 

Under the President’s proposed accounting change, the Export-Import Bank for the first time will be allowed to directly utilize its revenues to cover all its operating expenses, without federal appropriations.   Under the current accounting system, the Bank may apply its revenues to its loan-loss reserve account, but cannot use its revenues to cover its operating expenses, which have required appropriations.  Instead, the Bank’s revenues that are not used for loan-loss reserve are credited to the U.S. Treasury as a “miscellaneous receipt”.

 

Each year, the Bank generated substantial revenues from its fees, premiums for guarantees and insurance, and interest charged on its direct loans.

 

“In essence, the President is proposing that Ex-Im Bank finally be recognized as a financially self-sufficient entity”, said Edmund Rice, CEE President.  “Ex-Im does not need taxpayer funds to operate, if Congress will agree to allow the use of the Bank’s own revenues”, Rice added.   “This proposal underscores that export finance can be done on a financially sustainable basis”, Rice said.

 

The proposed accounting change also addresses growing pressure in the World Trade Organization (WTO) to reduce direct government funding of exports.  “By making Ex-Im a truly self-sustaining agency, the U.S. government is bringing the Bank into line with the clear direction of global trade policy”, commented NFTC President William Reinsch.  “This change puts the U.S. ahead of the curve in the WTO”, Reinsch added.  “We believe this change is a ‘win-win’ for American exporters and the American taxpayer”, Reinsch added.