Banking Chairman Defies McConnell, Obama, Boeing on Ex-Im Bank

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Senator Richard Shelby speaks to reporters before going into the Senate Chamber to vote on Oct. 12, 2013, in Washington.

Photographer: Andrew Burton/Getty Images
  • Shelby's blockade has crippled bank's financing authority
  • Bank limited to $10 million deals, limiting major exporters

Conservatives’ efforts to cripple the U.S. Export-Import Bank are now pitting two powerful Republicans against each other: Senate Banking Chairman Richard Shelby and Majority Leader Mitch McConnell.

Shelby on Thursday defied McConnell’s call to advance a nominee to the board of the Ex-Im Bank, a key financing tool for Boeing Co. and other major exporters.

"It’s corporate welfare," said Shelby, an Alabama Republican, who said he would tell McConnell the same thing. Although McConnell is also an opponent of the bank, on Tuesday he called on Shelby to allow the nominee to get a vote on the Senate floor.

"Well, he says he’s against it, but I don’t know. I’m against it. You know, we’re not going to be moving it out of committee, OK?" Shelby told reporters in the Capitol.

McConnell of Kentucky voted against reviving the bank last year during a fight that left the Ex-Im Bank without authorization for the first time in its 81-year history.

Even though the bank was reauthorized last October, only two of the five positions on the board of directors are currently filled, and three are needed for a quorum. That means that until new a board member is confirmed, the bank is limited to financing deals of less than $10 million -- effectively blocking Boeing, Caterpillar Inc. and other large exporters from using it to finance major export deals.

Standing Firm

Shelby was asked if there was anything that could get him to move an Ex-Im nominee.

"No," he replied.

Shelby’s blockade has earned him plaudits from the conservative Club for Growth, whose president, David McIntosh, called the bank an example of "crony capitalism."

“By holding up the appointment of a new Ex-Im director, Senator Shelby is doing taxpayers a favor by blocking the flow of corporate welfare to massive companies that are still demanding favors from the federal government," he said in a statement Wednesday. "We hope Senate Majority Leader Mitch McConnell, who says he’s also an Ex-Im opponent, will let Senator Shelby run his committee as he sees fit."

Shelby said if McConnell tried to sidestep his committee and move the nomination straight to the floor, there would be a fight.

"That would probably set a precedent," he said.

Still Fighting

Democratic Senator Maria Cantwell of Washington said she isn’t giving up.

"If we can just now get the Ex-Im bank official done so that the bank can be operational, then maybe we’d be taking care of business," she said.

As for Shelby, "He’s going to have to change his mind unless he’s anti-U.S. jobs," she said.

She and fellow Washington Democrat Patty Murray in February said the delay in approving another director for the board had stalled a pipeline of more than $10 billion in financing deals.

And last week Treasury Secretary Jacob J. Lew called the confirmation a priority.

“As long as U.S. exporters are contending with competitors backed by government export financing and the unavailability of private financing, Ex-Im remains a critical tool for the administration’s goals of supporting U.S. exporters and promoting global trade," he said in prepared remarks.

Cruz-McConnell Spat

McConnell’s position -- opposing the bank but supporting moving forward with a nominee -- is another chapter in a long saga that has touched the presidential race. Texas Senator Ted Cruz last year accused McConnell of lying by telling fellow Republicans there wasn’t a deal on a vote to renew the Export-Import Bank.

On Tuesday, McConnell pointed to the broader support for the bank.

“As you may recall, I’m not a supporter of Ex-Im Bank, but 65 senators were,” he told reporters. “And I would hope the committee would report out the nominee and if the committee reports out the nominee, I’ll be happy to take it up.”

Shelby also reaffirmed his blockade on Federal Reserve nominees until President Barack Obama appoints a vice chairman for supervision -- a position mandated by the 2010 Dodd-Frank financial overhaul law, but not yet filled by the president.

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