After operating quietly in the shadows for eight decades, the Export-Import Bank has suddenly become a litmus test for Republicans facing pressure from conservatives opposed to federal spending for big business.
Thanks to a shift in position announced Sunday by incoming House Majority Leader Kevin McCarthy, who said he will oppose reauthorizing the bank after its current charter expires Sept. 30, the New Deal-era institution that provides loans and credit insurance to foreign buyers of American-made products is at the center of a heated political debate on Capitol Hill.
The debate also pits Republicans against some of its most powerful traditional backers: The U.S. Chamber of Commerce and the National Association of Manufacturers are among groups urging Congress to reauthorize the bank, which helped support about $37 billion in export sales during fiscal 2013 through loans and credit insurance costing roughly $27 billion.
More than 40 House Republicans joined in a letter to the leaders this week supporting the bank.
But on the other side of the ledger are conservative groups like Club for Growth and Heritage Action.
“Before it’s always been an inside-baseball type of thing—nobody knows about it or cares about it,” said Rep. John Fleming. But now, the Louisiana Republican said, jabs at the bank from rising GOP leaders, including House Financial Services Committee Chairman Jeb Hensarling, “make this a real lightning-rod issue.”
Not only could Republican positions on the bank’s continued existence play a role in this year’s midterm elections, the GOP leadership slate in the next Congress might well be determined by how the issue plays out in this one.
Two years ago, a bill to reauthorize the bank passed the House 330-93 in a bipartisan vote. All 183 Democrats voting on the bill joined with 147 Republicans in approving the measure—while 93 Republicans voted against it. The approval came about after Majority Leader Eric Cantor teamed with Minority Whip Steny Hoyer to push for another two-year renewal, but the GOP opposition was significant and ominous, given that it was coming from Hensarling and other restless conservatives.
Then came Cantor’s unexpected primary defeat on June 10 and his decision to step aside as majority leader at the end of July. Hensarling was described by colleagues as already preparing for a showdown with Cantor over the Export-Import Bank’s reauthorization, but the change in leadership approved by House Republicans last week moved the issue to the front burner.
Hensarling’s committee has scheduled a hearing Wednesday titled “Examining Reauthorization of the Export-Import Bank: Corporate Necessity or Corporate Welfare?”
Other conservatives have already been building toward a bank shutdown. Sen. Mike Lee of Utah earlier this year laid out this opposition in a National Review piece headlined, “Ex-Im Bank and the GOP’s Cronyism Test.” Lee called the issue a key test for congressional Republicans.
Against this backdrop, McCarthy announced Sunday a shift in his own position on the bank, when he said he intended to vote to let it close. The incoming majority leader had voted for its reauthorization two years ago.
On Tuesday, Speaker John Boehner, himself a past supporter, declined to say whether he believed the bank’s charter should be renewed.
Perhaps more surprising, GOP Conference Chairwoman Cathy McMorris Rodgers—who also voted to reauthorize the bank in 2012—got an editorial tongue-lashing this week from a major hometown newspaper supporting the bank for what it described as her evasive answers on the topic.
McMorris Rodgers was asked about the issue by The Spokesman-Review of Spokane, and the newspaper reported Tuesday that the House’s No. 4 Republican wouldn’t commit to supporting a reauthorization again. Instead, she told the paper she supports “a way forward for Washington [state] exports, while at the same time protecting taxpayer dollars.”
“That’s a weak response when thousands of Washington jobs, many in her district, depend on the bank,” the newspaper said. “The entire Washington delegation backed the bank two years ago, and a stronger push is needed now,” the editorial said, noting that Boeing, General Electric, and Caterpillar are some of its biggest beneficiaries.
The newspaper then went so far as to note that McMorris Rodgers—although she comes from the nation’s “most trade-dependent state”—has much to fear from Hensarling and “his tea-party colleagues.”
In fact, Hensarling, a conservative darling who passed on the chance to challenge McCarthy in last Thursday’s special election for majority leader, is seen by many as instead preparing a run for one of the two top GOP leadership positions in the next Congress.
But another Republican who supports renewing the bank’s charter, Rep. Tom Cole of Oklahoma, said the question for him is not so much the impact on the GOP leadership ranks. Rather, he said, it is whether Hensarling will allow a vote in his committee. And if so, Cole asked, will the bill go to the floor so the entire House can weigh in?
“Potentially thousands of jobs” are at stake, Cole said.
This article appears in the June 25, 2014 edition of NJ Daily as Conservatives Turn Tide Against Export-Import Bank.