There's a new rallying cry on Capitol Hill. At the end of September, the multi-year charter of the U.S. Export-Import Bank will expire and, not unlike the fight over the debt ceiling in 2011, a cadre of lawmakers is threatening to oppose its reauthorization.

"The Export-Import Bank distorts the free market by providing loans to politically favored companies, at the expense of their competitors who receive no such help. It uses taxpayer dollars to subsidize goods and services that benefit foreign regimes, including Russia and China," says a memo signed by the leaders of multiple deep-pocketed political organizations. "To close the door to cronyism, the Export-Import Bank should not be reauthorized."

This got me thinking. Even though I consider myself well-informed -- and particularly when it comes to financial matters -- I know next to nothing about the EX-IM Bank. It obviously has something to do with international trade, but the answer to the question of exactly what it does eludes me. So I decided to investigate.

The role of the EX-IM Bank
The mission of the EX-IM Bank is to "support American jobs by facilitating the export of U.S. goods and services." It does so by providing loans or credit guarantees not to American companies, but rather to foreign buyers of U.S. goods. Although this may sound unusual, it's actually quite commonplace. At present, approximately 60 other nations do the same thing including China, Japan, Germany, and Canada.

For example, last year the EX-IM Bank guaranteed a $187.4 million bond issued by The Milestone Aviation Group of Dublin, Ireland. The proceeds from the bond were then used by the Irish company to purchase helicopters manufactured by the Sikorsky Aircraft Corporation, an aircraft manufacturer based in Connecticut and a subsidiary of the industrial conglomerate United Technologies. As the EX-IM Bank's 2013 annual report notes, Sikorsky employs approximately 13,000 Americans and the transaction itself supports roughly 1,000 of those jobs.

It was a nearly identical arrangement in fact that sowed the original seeds at Nike. When the company was founded by Phil Knight in the mid-1960s, it was nothing more than a U.S.-based distributor of Japan's Tiger shoes. And while Knight came armed with the keen insight that inexpensively manufactured shoes from Japan could take U.S. market share away from Adidas, the then-industry leader which imported more expensive shoes from Germany, he needed money. And where did he get it? Through a Japanese trading company acting pursuant to a policy laid out by the country's state-sanctioned external trade organization.

The EX-IM Bank's expanding presence
Over the years, the role of the EX-IM Bank has grown. During President George W. Bush's final year in the oval office, the bank authorized $14.4 billion worth of transactions, boosting exports by an estimated $19.6 billion. Fast forward to today and these numbers have almost doubled. Last year, following President Obama's 2009 goal of doubling exports by 2014, it authorized $27.4 billion in loans and credit guarantees which facilitated $37.4 billion in exports.

To be clear, this amounts to a minuscule portion of total U.S. exports -- and an even more insignificant share of aggregate gross domestic product. American companies shipped or provided $2.28 trillion worth of goods and services abroad in 2013. By this measure, the EX-IM Bank facilitated only 1.6% of the total amount.

But this comparison doesn't do the issue justice. This is because the bank provides financing in instances where private funds aren't available. "EX-IM Bank does not compete with private sector lenders but provides export financing products that fill gaps in trade financing," its website explains. "We assume credit and country risks that the private sector is unable or unwilling to accept." Along these same lines, it's worth noting that the lions' share of loans and credit guarantees -- 90% if measured by transaction count -- benefit small businesses.

The takeaway from this is twofold. In the first case, it stands to reason that the EX-IM Bank does in fact provide an important and outsized stimulus to the American economy. According to its own estimate, which isn't without bias of course, the financing it provided last year supported 205,000 export-related American jobs. And in the second case, the companies that benefited from the bank account for a small but nevertheless non-negligible share of commerce. If this were to drop out of GDP, it wouldn't be replaced.

"There's a lot of things to be critical about big businesses, and there's a lot of things that don't work in government, but exporting is not one of them and the EX-IM Bank is not one of them," the CEO of General Electric recently noted.

It's for these reasons that the EX-IM Bank has historically been embraced by lawmakers on both sides of the aisle. "Exports create and sustain jobs for millions of American workers and contribute to the growth and strength of the United States economy," said President Reagan in 1984. "The Export-Import Bank contributes in a significant way to our nation's export sales." Two decades later, President Clinton channeled the same opinion. "Export expansion obviously encourages our most advanced industries. I am committed to promoting these exports, and what's where the EX-IM Bank plays an important role."

What explains opposition to the EX-IM Bank?
In light of this, you'd be excused for wondering how the EX-IM Bank's pending reauthorization has become such a hot-button political issue. The answer, giving Washington the benefit of the doubt, is that it boils down to history and economic philosophy.

The debate over the government's direct involvement in the banking industry dates back to the founding of the country. At the time, it was between the Federalists, led by Alexander Hamilton, and the Democratic-Republicans, organized by Thomas Jefferson, over the issue of whether to charter an official bank of the United States. While the Federalists prevailed, and thus emerged with a 20-year charter for the First Bank of the United States, the ebb and flow of the dispute has continued ever since.

Over the next 220-plus years, the issue reached three particularly notable inflection points. In the 1830s, the populist Democratic president Andrew Jackson defeated the attempt to reauthorize the Second Bank of the United States -- which, it's worth noting, is often blamed for igniting the Panic of 1837 and the depression that followed. Eighty years later, following another financial crisis, the opposition succeeded at establishing the Federal Reserve in 1913. And two decades after that, came the wave of government-guarantee programs of President Roosevelt's New Deal, through which the EX-IM Bank was born.

The point here is that the ongoing debate over whether or not to reauthorize the EX-IM Bank's charter is nothing new. How will it turn out this time? That remains to be seen. But one can rest assured that this won't be the last it rears its ugly head.