By Murray Hiebert

The political debate has been heated between those who want to slash federal spending to reduce the national debt and those who want to increase spending to spur the U.S. economy and create jobs. Here’s a step that would help achieve both goals: reauthorize the U.S. Export-Import Bank.

Ex-Im Bank is a relatively little-known federal agency that provides loan guarantees to companies in other countries that want to buy U.S. products. Ex-Im Bank guarantees enable foreign companies, to get affordable loans from commercial lenders, without which they could not buy U.S.-made products such as heavy construction machinery, airplanes, fire trucks, high-tech medical equipment, and clean energy technology and services.

Ex-Im loan guarantees have had an outsized impact on U.S. exports, economic growth, and jobs. In 2011, Ex-Im supported more than $40 billion in exports that helped create or support some 290,000 U.S. jobs. Ex-Im has played a key role in reviving U.S. manufacturing and boosting exports to Asia – one of the few bright spots in the U.S. economy in recent years. More than 80 percent of the bank’s transactions support thousands of small businesses across the country.

Here’s the other little known part of this story: Because the bank charges foreign buyers for its services, it earns a profit for U.S. taxpayers. From 2005 to 2010, the bank returned $3.4 billion to the U.S. Treasury above its cost of operations. That’s a modest contribution to deficit reduction, but it’s a step in the right direction.

The bank has targeted nine key rapidly growing markets, including Indonesia and Vietnam in Southeast Asia, to help boost U.S. exports.  Over the next five years these nine countries will spend an estimated $2 trillion on infrastructure projects in which U.S. companies could play an active role. In FY 2011, Indonesia got $695 million in Ex-Im Bank credits and Vietnam $1.4 million to buy U.S. products. This figure could increase dramatically as their economies grow if the the bank had more funds available.

Critics of the bank question why taxpayers should shoulder the financial risks associated with commercial transactions. But the risk is extremely low. Ex-Im Bank follows a rigorous risk-assessment process and arguably has done a better job of assessing risk through the years than the big commercial banks. The proof is in the bank’s track record. Borrowers have defaulted on only 1.5-2 percent of the loans backed by Ex-Im since its inception in 1934, which is why the bank has consistently earned a profit for American taxpayers.

Critics also say their opposition to the bank is a matter of principle, that governments simply don’t belong in the business of making loan guarantees. Although that is an interesting intellectual debate, businesses operate in the real world, and the reality is that numerous foreign governments provide aggressive export credit in support of their countries’ companies and exports. Without Ex-Im, potential buyers of U.S. products would simply turn to competitors in Asia and Europe who have government-supported financing. American exporters, and the millions of people they employ, would be the losers.

Congress should reauthorize Ex-Im bank. It’s a model public-private partnership that works and delivers real value to our nation. Congress needs to raise the current cap on the level of outstanding loans Ex-Im is permitted to have. The cap currently is $100 billion and the bank’s ability to backstop loans in support of U.S. exporters will end in the months ahead when this cap is reached. Given the recent growth of job-creating U.S. exports and the fact that Ex-Im makes money for the U.S. government and taxpayers, re-authorization of the bank should be a bipartisan priority.

Murray Hiebert is deputy director and senior fellow, Southeast Asia Program, CSIS.