A powerful coalition of conservative advocacy groups is taking a united stand against the Export-Import Bank, raising the stakes in the debate over whether to reauthorize the agency that provides foreign loan guarantees aimed at boosting U.S. exports.
The Conservative Action Project, a coalition of right-wing groups led by former Attorney General Edwin Meese, has penned a memo urging Republicans in Congress to let the bank’s charter expire at the end of September. The memo, obtained by National Journal, is signed by the leaders of America’s largest and best-funded conservative organizations, including Heritage Action, the Club for Growth, Citizens United, and FreedomWorks.
“The Export-Import Bank distorts the free market by providing loans to politically favored companies, at the expense of their competitors who receive no such help. It uses taxpayer dollars to subsidize goods and services that benefit foreign regimes, including Russia and China,” the memo reads. “To close the door to cronyism, the Export-Import Bank should not be reauthorized.”
The memo amounts to a warning shot fired across the bow of the House Republican Conference, whose members are discussing the subject this week and have been divided over whether to extend the bank’s charter.
Financial Services Committee Chairman Jeb Hensarling, who’s weighing a campaign for a top leadership position this November, has made ending the Export-Import bank a cause de celebre for House conservatives. These members watched with great interest when Kevin McCarthy, just days after winning a promotion to majority leader, said on Fox News Sunday that he supported Hensarling’s push to eliminate the agency.
But McCarthy’s pledge, aimed at mollifying a restless rank-and-file that had just granted him a five-month audition as the House’s No. 2, angered some establishment Republicans with close ties to the business community. More than 40 of these members banded together late last month and wrote a letter to top GOP leadership officials urging them to reauthorize the bank.
Caught in the middle are many House Republicans who have friends on both sides of the debate—conservatives pushing the crony capitalism argument, and business interests emphasizing the economic significance of U.S. exports—and are thus hoping for a compromise that would reauthorize the bank but only with significant structural reforms.
Still, with the bank’s charter set to expire in less than three months, and Senate Democrats poised to vote as soon as this month on reauthorization, conservative outside groups are drawing a line in the sand. They are letting it be known to lawmakers—particularly House Republicans, who have the power to hold the line against reauthorization outright—that the only acceptable solution is abolishing the bank, period.
“The core problems with the bank—market distorting loans to politically favored companies—will persist unless Ex-Im authorization is allowed to expire entirely,” the CAP memo states. “Any plan to bypass regular order in the Senate or House to preserve Ex-Im constitutes an end-run around the democratic process and the interests of the American people.”
Conservatives take comfort in the fact that Hensarling’s committee has jurisdiction over the matter. But they also fear it might not matter. If the bank’s reauthorization is tied to a short-term government funding bill—as lawmakers have long expected, since both the bank’s charter and the current funding blueprint expire at the end of September—then the debate over Export-Import could lead to a potential government shutdown.
Some House Republicans are already predicting how this will unfold: the GOP leadership team proposes a short-term funding bill that contains language to eliminate the Export-Import Bank, but would allow the Senate to strip out that language and pass a “clean” funding bill.
If that scenario sounds familiar, it’s because that’s exactly what GOP leadership proposed last year as conservative were mounting a last-minute campaign to defund the Affordable Care Act. The pushback from members was so visceral that Speaker John Boehner and his team were forced to adopt a conservative proposal that made new government funding wholly contingent upon defunding Obamacare.
The result was a government shutdown.
If history repeats itself this September, it won’t be coincidental. The timing is the same. The divisions are the same. And the group that worked behind the scenes last summer advocating for the strategy of tying government funding to defunding Obamacare? It was the Conservative Action Project.