Former Treasury Secretary Lawrence H. Summers is urging Congress to reauthorize the endangered Export-Import Bank, saying that allowing the agency to shut down while other countries have similar programs to boost their foreign sales would be "the economic equivalent of unilateral disarmament."
Summers, who was President Obama's top economic advisor in 2009-10, added his voice to a chorus of business leaders and Democratic officials who are fighting to save the bank in the face of stiff Republican opposition.
A previous version of this post said the incoming House Majority Leader Kevin McCarthy was from Sacramento. He's from Bakersfield.
Bank supporters have launched an aggressive lobbying push to persuade lawmakers to reauthorize the export-assistance agency before its charter expires on Sept. 30
The bank is crucial to U.S. economic engagement in the global economy, Summers wrote in a column Sunday in the Financial Times.
He noted that the bank, which provides loans to foreign buyers of U.S. products and other assistance to exporters, does not require any taxpayer funding. It pays for its operations through interest and fees and last year sent a record $1.1 billion in profits back to the Treasury.
The bank "enables U.S. exporters to compete on a more level playing field with those of competitor nations, all of whom have similar vehicles," Summers said.
"Only by maintaining a capacity to counter foreign subsidies can we hope to maintain a level global trading system and to avoid ceding ground to mercantilists," he wrote. "Eliminating the Export-Import Bank without extracting any concessions from foreign governments would be the economic equivalent of unilateral disarmament."
Many House Republicans, including incoming Majority Leader Kevin McCarthy (R-Bakersfield), say the bank mostly helps large companies, such as Boeing Co., and amounts to unnecessary "crony capitalism."
Although the bank does not require annual congressional appropriations, taxpayers are on the hook for any losses on its $140 billion in outstanding loans and other assistance.
Summers said the U.S. needs to be more actively engaged on global financial issues. He criticized Congress for not approving reforms proposed by the International Monetary Fund that Obama administration officials have advocated.
The changes at the IMF would give China and other emerging market countries more say in the international agency's decisions. Republicans question the effectiveness of the IMF and are worried the reforms would lessen U.S. influence over IMF actions.
"A failure to engage effectively with global economic issues is a failure to mount a strong forward defense of American interests," Summers wrote. "The fact that we cannot do everything must not become a reason not to do anything."
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