One easy applause line for a politician working a conservative crowd is to bash the Export-Import Bank of the United States. The entity has always been discomfiting for Republicans, many of whom like to paint it as a manifestation of corporate favoritism, wasteful government spending, or managed trade. As Congress lurched toward reauthorizing Ex-Im this spring, criticism of this once-obscure agency intensified as some of the Tea Party members put the agency in their sights.

However, what the Ex-Im Bank actually does is much more complex—and necessary—than what its critics generally assume. As much as conservatives hate to acknowledge it, an entity that helps to finance the purchases of U.S. exports abroad is a necessary evil in the current environment, where Europe and China’s export credit agen cies are much more aggressive in the use of export financing than the Ex-Im Bank would ever dare. Eliminating or even scaling back the bank would have been a serious blow to the U.S. manufacturing sector at an extremely unpropitious time and would have saved virtually no taxpayer money.

Tit for tat | It is important to emphasize that what the Ex-Im Bank does is actually a pittance compared to what its counterparts do for their exporters. For example, China’s Export-Import Bank provided 17 times more financing as a share of GDP to its exporters than did the U.S. Export-Import Bank in 2008, and all indications are that this figure will only increase. The foreign financing entities of the European Union and Brazil also do more for their exporters than what the Ex-Im Bank does for U.S. companies as a proportion of GDP.

This puts U.S. exports in a bind. When a U.S. company angles for a big sale, the fact that its rivals are able to provide easy financing through their respective nations’ export banks is an attractive perk that can (and often does) make closing the deal all the more difficult to accomplish—which is the very reason that our economic rivals are pouring so much into their export banks.

Escalating our own export financing in response to the increasing export financing done by other foreign entities may be far from efficient. But it is different from a tariff war in that it has little negative impact on U.S. consumers, as consumer prices are unaffected.

Reform | While the Ex-Im Bank is a necessity in today’s environment, its mission needs to be focused solely on leveling the playing field for U.S. exporters. It should be enabled to operate efficiently without targeting specific industries and without suffering from a tangle of conflicting political mandates.

As we argued in our May 2011 paper “Export-Import Bank: Obstacles and Options for Reform,” the bank suffers from skewed financing, political interference, and a host of management issues. In 2010 air transportation accounted for almost half of its total exposure, and Boeing’s customers received over 60 percent of the Ex-Im Bank’s long-term loan guarantees, leading to its nickname of “Boeing’s Bank” and a sense of resentment from other industries that have not been as successful at gaining its support.

While a natural response might be for Congress to mandate that it support a more diversified portfolio of loans, the Ex-Im Bank already faces a host of conflicting political directives that complicate its task. For instance, Congress has imposed mandates that it support renewable energy exports, small business exports, and the exports of minority and women-owned businesses—all of which make its task of supporting exports that support American jobs all the more difficult. In addition, Ex-Im must abide by antiquated domestic content requirements and cargo preference requirements when selecting export deals to support. All of these mandates make it difficult to meet other goals, such as the administration’s target of doubling total exports in five years.

While the Ex-Im Bank has had more than its share of management issues in the past, such a hodgepodge of restrictions only complicates its task. The bank should be given more flexibility to support deals based on economic sense rather than any narrow political exigencies.

And for those who bemoan its expense as being unaffordable in the era of trillion-dollar deficits, the Ex-Im Bank is currently self-sustaining, covering its operations through fees and interest payments. Of course, it takes only one default to erase that talking point and the bank has taken losses in the past, but budgetary savings that conservatives attribute to the demise of Ex-Im range from the absurd to the ridiculous.

Reauthorization | Killing the Ex-Im Bank would have been a purely pyrrhic victory for conservatives, providing them a scalp while doing not a whit for the economy. Instead, Congress recognized the bank’s necessity in the current economic climate. Future congressional action should lift restrictions on who gets loans, require greater transparency, and place a greater emphasis on leveling the field for U.S. exports.

What’s being overlooked in the fight to end this entity is that a successful Ex-Im leads to the creation of precisely the sort of high-paying manufacturing jobs that the American economy has been hemorrhaging over the last few years. In a climate where states cough up billions of dollars to entice employers to locate (or merely remain) in their state, investing in an entity that can potentially increase U.S. manufacturing exports by hundreds of billions of dollars at virtually no cost to the taxpayer is not a bad investment. It beats any alternative proposals that would inevitably fill the political need that the Ex-Im Bank’s absence would create.