Congressional Republicans are poised to deal a sharp blow to their traditional allies in the business community by allowing the federal Export-Import Bank to go out of business at the end of the month. But it may only be temporary.
The 81-year-old bank is a little-known federal agency created during the Depression that makes and guarantees loans to help overseas buyers purchase U.S. products, from airplanes to bridges to baby clothes. Over the past year it’s also become a surprising test of GOP purity, as Tea Party-backed lawmakers and outside conservative groups have denounced the bank as crony capitalism and vowed to get rid of it, pressuring fellow Republicans to go along.
“It is the purest form of corporate welfare, where you have a government agency that basically exists to subsidize Boeing airplanes and GE engines and Caterpillar tractors,” said Dan Holler of Heritage Action for America, one of the conservative groups pushing congressional Republicans to stand against the bank.
Supporters at the U.S. Chamber of Commerce and other business groups disagree, arguing that the agency helps many smaller companies and is necessary to keep U.S. businesses competitive, especially because key foreign competitors such as China have generous export credit agencies helping their homegrown industries.
“The fact that all the major exporting countries have export credit agencies means American exporters would be competitively disadvantaged if the bank goes away,” said Boeing spokesman Tim Neale. “The opposition has thrown a lot of stuff out there that’s frankly pretty misleading.”
The Export-Import Bank, which says it supported $27 billion in U.S. exports last year, still counts supporters in both parties on Capitol Hill. But a number of high-profile Republicans including Senate Majority Leader Mitch McConnell, R-Ky., and House Majority Leader Kevin McCarthy, R-Calif., have abandoned past support for the bank under pressure from the party’s conservative wing. Most of the party’s leading presidential candidates have also lined up against reauthorizing the bank.
“The Export-Import Bank is essentially welfare for big corporations, both foreign and domestic,” Texas Sen. Ted Cruz, one of the GOP hopefuls, said in a Wednesday speech at the Heritage Foundation. “Do nothing, let it expire, and end the gravy train for Washington lobbyists on the Export-Import Bank.”
Republican House Speaker John Boehner of Ohio, a longtime business booster, has pushed his Financial Services Committee Chairman Jeb Hensarling, R-Texas, to come up with a plan to reform the bank or wind it down. Hensarling has responded, instead, by pushing for the bank’s charter to expire without a vote June 30.
With Congress heading out on recess next week and no prospect of action on the Export-Import Bank before then, Hensarling and fellow tea party conservatives will get their wish. But their victory may be short-lived.
Lawmakers of both parties on Capitol Hill expect a reauthorization of the bank could move in the Senate in July. If attached to must-pass legislation extending the federal highway trust fund, it could make it through the House as well.
The fate of the Export-Import Bank has become enmeshed in Congress’ contentious debate over trade after Washington Democratic Sen. Maria Cantwell withheld her support on a key trade vote last month until she said she got a commitment from McConnell to allow a vote on the bank.
What exactly was agreed to is now a matter of dispute on Capitol Hill, and McConnell says he’s already fulfilled his commitment by allowing a symbolic vote on the Export-Import Bank earlier this month that allowed supporters to demonstrate they command at least 65 votes in favor. Still, McConnell and other GOP leaders sound open to adding a reauthorization of the bank to the highway bill next month.
“The highway bill, of course, will be open for amendment, and it’s pretty obvious that that would be a place for this vote to occur,” McConnell said Tuesday.
Asked about the issue Wednesday, Boehner said: “I think some expectation has been that it’ll come over here on some must-pass bill. The only commitment I’ve made is that if it does, it would be considered under an open process.”
Some supporters seem resigned to a brief lapse in the bank’s charter. But some Democrats say even a temporary standstill will jeopardize projects and U.S. jobs. They also question whether Congress has abandoned its habit of solving problems only when a deadline looms – in favor of solving them only after the deadline has come and gone.
“There’s a whole lot of people who think that it doesn’t matter; it does matter. It matters to the jobs that are out there. We have $11 billion in credit in the pipeline at the Ex-Im Bank. That $11 billion is now going to be stalled out,” said Sen. Heidi Heitkamp, D-N.D. “I hope that the message this place gets is do things on time, don’t wait.”
Republished with permission of The Associated Press.