Ex-Im Critic Faults Environmental Role in Loan DecisionsKathleen Miller and Erik Wasson
The chairman of the Senate Foreign Relations Committee said Thursday he is “offended” that the U.S. Export-Import Bank won’t help finance some coal exports in order to adhere to President Barack Obama’s climate plan.
Bob Corker, a Tennessee Republican, made the comments at a Senate Banking Committee hearing on whether to reauthorize Ex-Im. Fred Hochberg, the bank’s chairman, confirmed the bank doesn’t help finance coal-powered plants in “wealthier countries” with alternate sources of power.
Congress is weighing whether to extend the bank’s charter, which expires June 30. Corker, who voted against re-authorizing the bank in 2012, hasn’t said whether he supports extending its charter this time.
“I’m fairly offended to realize Ex-Im Bank basically had taken on some of the administration’s policies without Congress being involved in any way,” Corker said at the hearing in Washington. “I didn’t know we were carrying out environmental policies through Ex-Im.”
Hochberg countered that Congress over the past 23 years had directed the bank to consider the environmental effects of its financing of foreign companies’ purchases of U.S. goods.
“Over 23 years we have had to adjust our environmental policy to meet needs of science and industry,” Hochberg said. “This is not something inserted recently.”
The bank does support some coal and coal-mining equipment exports, he said. It won’t support deals involving coal-fired power plants in “wealthier countries” that have the option of using other sources of power, such as nuclear energy, he said.
“I want to be clear we actually do support the administration’s climate action plan to restrict coal-fired power plants except to the poorest countries,” Hochberg said.
Once renewed regularly without controversy, Ex-Im has become a target of conservative Republicans who say it benefits only a few large corporations that don’t need government assistance. The bank provides loans, guarantees and insurance to aid purchases of U.S. goods by foreign companies.
Thursday’s hearing follows one a day earlier before the House Financial Services Committee, led by Texas Republican Jeb Hensarling, a top opponent of the bank’s reauthorization.
He has said a government-run bank shouldn’t be picking winners and losers by deciding which deals to finance.
Senator Mike Rounds, a South Dakota Republican and a Banking Committee member, said Ex-Im’s stance on coal projects plays into that argument.
“You’re giving people who do not want to see this bank continued forward, you’re giving them the ammo that they want to show that it’s picking winners and losers,” he said. Rounds questioned whether the bank was more interested in promoting policy goals than American jobs.
At Wednesday’s hearing, Hensarling said Democrats backing reauthorization of the Ex-Im Bank are giving Wall Street a “big, wet kiss.”
JP Morgan and other private-sector banks provide financing for some of the loans arranged by Ex-Im, which then guarantees the loans in case there is a default, according to Ex-Im’s website.
Hochberg said Wednesday that Ex-Im returned $675 million to the U.S. Treasury for deficit reduction in 2014.
Senate Majority Leader Mitch McConnell, a Kentucky Republican who also opposes reauthorizing the bank, agreed to hold a vote on Ex-Im in June as part of a deal to advance trade legislation.
Senator Heidi Heitkamp, a North Dakota Democrat, said an Ex-Im reauthorization bill she is sponsoring with Illinois Republican Senator Mark Kirk would pass both chambers.
Kirk plans to offer their bill as an amendment to defense legislation the Senate is now considering, according to a Republican aide who sought anonymity.
The Heitkamp-Kirk measure would extend the bank’s charter through Sept. 30, 2019, and prohibit Ex-Im from blocking financing for coal or other energy projects simply because of the industry involved.
Bank supporter Senator Maria Cantwell, a Washington Democrat, expressed doubt that the effort would succeed because Obama has said he would veto the defense measure.
Even so, such a vote would give Ex-Im backers a chance to demonstrate the amount of support for a reauthorization.
The bank’s future may rest in the House, where Speaker John Boehner of Ohio said in May that the House would be allowed to “work its will” on Ex-Im. He also has promised an open-ended amendment process if the Senate sent a bill to the House.
The House will vote on the bank’s charter, whether as part of legislation that passes the Senate or some other way, said Representative Steny Hoyer, the second-ranking Democrat in the chamber.
“Either way, I think we are going to get a vote in the House floor certainly before we break for summer and hopefully in the next three weeks,” Hoyer, of Maryland, said Thursday.
Republican and Democratic backers of the bank say there is enough support in Congress to pass legislation to reauthorize it, if lawmakers are allowed to vote.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.