House Majority Leader-elect Kevin McCarthy said on Sunday that he intends to let the charter of the controversial Export-Import Bank expire this fall—a move that would appease conservatives in Congress who are demanding that the bank not be reauthorized.
"We've got hearings going on [this week] in financial services, which I sit on," said McCarthy in an appearance on Fox News Sunday with Chris Wallace. "I think that Ex-Im is one that government does not have to be involved in."
Two years ago, McCarthy was one of 147 House Republicans who joined with 183 Democrats in voting to reauthorize the bank's charter—over the opposition of conservatives like Financial Services Committee Chairman Jeb Hensarling who characterized the bank as corporate welfare.
The bank makes taxpayer-backed loans to help overseas entities buy U.S. products, authorizing roughly $27 billion in fiscal 2013 to back about $37 billion in export sales. Its charter comes due for renewal again on Sept. 30.
McCarthy was elected just last week by Republicans to be their majority leader—a job that includes setting the legislative agenda and floor schedule—after Eric Cantor's primary-election defeat. McCarthy officially takes over that job on July 31. And he does so knowing that Republicans will pick a full slate of leaders again just after the Nov. 4 midterm elections, and restive conservatives will be watching his actions closely between now and then.
One of McCarthy's first hurdles could be his handling of the Export-Import Bank question. Cantor had been instrumental in working with Minority Whip Steny Hoyer in getting the 2012 legislation passed to reauthorize the bank for another two years.
But along with some conservative lawmakers, outside conservative groups such as Heritage Action and the Club for Growth are demanding that the bank not be reauthorized again.
It was against this backdrop that Fox News's Wallace pressed McCarthy directly on Sunday with the question: "So, straightforward question, you can say it right here. You would allow the Ex-Im bank to expire in September?
And McCarthy responded, "Yes, because it's something that the private sector can be able to do."
McCarthy also said during the interview, "One of the problems with government is they go and take hard-earned money so others do things that the private sector can do. That's what the Ex-Im Bank does."
"The last authorization with the Ex-Im Bank directed the president and the Treasury secretary to wind down the Ex-Im Bank, negotiate with other countries to wind them down, so we have a level playing field," he said.
McCarthy's comments come as debate over whether to renew the bank's charter is ramping up. As McCarthy indicated in the interview, Hensarling's Financial Services Committee is set to hold a hearing on Wednesday, titled, "Examining Reauthorization of the Export-Import Bank: Corporate Necessity or Corporate Welfare?"
Earlier this year, Republican Sen. Mike Lee publicly laid out this opposition in a National Review piece he wrote. Headlined "Ex-Im Bank and the GOP's Cronyism Test," Lee called the issue a key question for congressional Republicans.
"Whether the beneficiaries of particular Ex-Im Bank loan guarantees are respected, successful companies like Boeing or crony basket cases like Solyndra, is irrelevant. Twisting policy to benefit any business at the expense of others is unfair and anti-growth," he wrote. "Whether congressional Republicans say so—and do something about it—during the coming Ex-Im Bank debate will tell us a lot about what, and who, the party really stands for in 2014 and beyond."
Hensarling himself has said at a congressional hearing earlier this year that he believes "there are a number of reforms that should be had if this program is going to be reauthorized," but that he "remain[s] skeptical that taxpayers ought to be on the hook for this."
Against this backdrop, however, has come a push from business interests and other groups to renew the bank's charter.
And bank officials have scheduled a briefing for reporters on Monday to provide, according to an invitation, "a sort of 'Ex-Im Bank 101'—a review of how the Bank's products equip U.S. companies to compete, a look at the global export credit landscape, and an update on the Bank's robust risk-management procedures."
This article appears in the June 23, 2014 edition of NJ Daily.