Export-Import Plan Said to Be Short on Loan CertaintyCheyenne Hopkins and Roxana Tiron
House Republican leaders are considering a short-term extension of the U.S. Export-Import Bank amid a dispute with Tea Party-aligned members who want to let the 80-year-old agency lapse on Sept. 30.
Leaders are discussing an extension of several months, said a Republican aide who asked not to be identified because no plans have been made public.
While Export-Import Bank President Fred Hochberg is pushing for reauthorization, he said a short-term extension wouldn’t resolve uncertainty for foreign companies that rely on its help to buy U.S. goods.
“Business people don’t work six weeks at a time,” Hochberg said in an Aug. 21 interview. “I understand Congress, but that’s not the real world of business. That’s not the world of profits and loss, sales and employment. That’s legislative language.”
The Export-Import Bank provides loan guarantees, loans and insurance to help foreign companies buy U.S. goods. Without a reauthorization, the agency wouldn’t be able to authorize new loans though it still could manage existing loans and contracts.
Hochberg said a short-term reauthorization of the bank would signal to foreign competitors “a lot of hand-wringing in America about what to do about this.”
Opposition to reauthorizing the Export-Import Bank is a litmus test for some House Republicans pushing for a smaller government. House Financial Services Committee Chairman Jeb Hensarling has called Ex-Im “crony capitalism” for its frequent business with Boeing Co.
House Speaker John Boehner is trying to diminish party differences before the November congressional elections.
Even a short extension would show movement by Hensarling, 57, of Texas and other Republicans who have called for abolishing the agency and relying on the private sector to fill its role.
“If you wanted to kill it, this is the best time to kill it,” said Tom Davis, a former Republican congressman from Virginia. A willingness to consider a short extension would show “they want to ruffle as few feathers before the election” as possible, he said.
The Heritage Foundation released a video today of its president, former Senator Jim DeMint, urging Republicans not to make a deal to reauthorize the bank.
“Americans are tired of politicians taking care of special interests while ignoring the will of the people,” DeMint said in a statement. “The best policy for our economy and for taxpayers is to end this cronyism and allow the bank’s charter to expire.”
Debate on the reauthorization begins next week when Congress returns from a five-week recess. David Popp, a Financial Services Committee spokesman, and Boehner spokesman Michael Steel said no agreement has been reached.
Boehner of Ohio hasn’t said how he’ll vote on an Ex-Im reauthorization. House Majority Leader Kevin McCarthy, a California Republican who took over the position July 31, said in June that he wanted to let the bank’s charter lapse.
Hochberg said he is “optimistic” that Congress will reach a deal to reauthorize the agency. He said the bank isn’t working on a contingency plan for the possibility that it won’t be reauthorized.
Even if lawmakers enact a short-term extension, they haven’t agreed on the path toward a longer reauthorization. Two years ago, 147 Republicans voted for reauthorizing the bank while 93 voted against.
The Democratic-led Senate is pushing a five-year reauthorization measure by Democrat Joe Manchin of West Virginia and Republican Mark Kirk of Illinois. The proposal is in line with what President Barack Obama said he wants: a five-year reauthorization, with a gradual increase of its lending limit to $160 billion from $140 billion.
In the House, Republicans led by Stephen Fincher of Tennessee, who opposed reauthorization in 2012, plan to introduce a bill that would renew the bank while mandating changes in business practices. The five-year reauthorization bill would lower the bank’s financing limit, place an office of ethics into statute, and create an audit committee at the bank.
Representative John Campbell, a California Republican, has offered a draft proposal that would keep the bank in business for three years and trim the lending cap to $95 billion.
California Representatives Gary Miller, a Republican, and Maxine Waters, a Democrat, also are working on a measure to renew the bank’s charter with a set of changes to the institution.
Paul Ryan, the Republican chairman of the House Budget Committee who has said he wants to abolish the agency, has said he would consider reauthorizing it with changes to the charter.
The U.S. Chamber of Commerce and the National Association of Manufacturers are among the groups urging reauthorization.
“This has been all hands on deck,” said Chris Wenk, senior director of international policy for the Chamber of Commerce. “The chamber and the business coalition has been very active in members’ districts across the country.”
About 89 percent of the Export-Import Bank’s 3,842 deals in the past fiscal year benefited small businesses, according to the lender’s annual report on $27.3 billion in financing.
Among long-term loan guarantees, 65 percent involved sales of Boeing aircraft, said a June 3 report by the Congressional Research Service. General Electric Co. is also a beneficiary of the agency.
Boeing spokesman Tim Neale said in an e-mail the company backs a multiyear extension “that gives customers of U.S. exporters like Boeing confidence that Ex-Im loan guarantees will be available to them if needed in the years ahead.”
“This is particularly important to the aerospace industry because airplanes purchased today won’t be delivered for several years due to current backlogs,” Neale said.
Foreign beneficiaries of Ex-Im financing, including Air India Ltd. and Emirates Airline, have drawn protests from some U.S. competitors led by Delta Air Lines Inc.
Trebor Banstetter, a spokesman for Delta, said any reauthorization must include “substantial reforms to ensure that U.S. airlines and our employees are not harmed by U.S. government subsidies to foreign carriers.”
Since the start of the year, Ex-Im’s board of directors has approved deals including $18.4 million for Beijing’s CMC International Tendering Corp. to buy fire trucks and related gear, and $186 million to help a division of London-based Inmarsat Plc buy Boeing-made satellites.
Gary Mendell, president of Meridian Finance Group, a trade-financing company for equipment manufacturers that uses Ex-Im, said the agency’s opponents appear to be focusing on it as Republican leaders try to avoid a repeat of last year’s partial U.S. government shutdown.
“I’m not in someone like Hensarling’s shoes so I hate to point a finger at him or anyone involved in the opposition,” Mendell said. “But it sure feels like the bully in the playground who couldn’t beat up any of the bigger kids now going after kind of a small kid.”
Mark Calabria, director of financial-regulation studies at the Cato Institute and a former Republican congressional staff member, said eliminating the Export-Import Bank is crucial for Hensarling and other Republicans aligned with the Tea Party.
“If he loses on this I think it’s going to demoralize not only him, but the Tea Party members of the Republican caucus,” Calabria said. A short-term reauthorization for Ex-Im beyond the election would “raise the odds of a more permanent or longer-term extension” later, he said.