GOP Clashes Over Export-Import Bank Reauthorization
Congressional efforts to reauthorize the Export-Import Bank before its charter expires May 31 are stoking an increasingly contentious lobbying fight between the establishment and anti-government wings of the Republican Party.
The bank, which finances and guarantees foreign purchases of U.S. goods, has become a flash point for tensions between anti-tax and tea party activists and pro-business trade groups. It’s also pitting Boeing Co., a leading bank beneficiary, against Delta Air Lines, which accuses the Ex-Im Bank of helping foreign airlines at the expense of U.S. carriers.
Pro-bank business groups such as the U.S. Chamber of Commerce, which were caught off guard by assaults on the bank by the free-market Club for Growth and its allies, have struck back hard. The bank’s defenders have spotlighted Ex-Im Bank loans that benefited some of the bank’s leading critics, including Delta and Club for Growth President Chris Chocola, a former House Member and businessman.
“This is a huge priority for the chamber and the business community,” said Christopher Wenk, senior director of international policy at the chamber, which has organized hundreds of meetings with lawmakers and their aides and is preparing its second pro-bank ad campaign. “We have a lot of companies, particularly small and medium-sized companies, that really rely on Ex-Im and the services it provides.”
Negotiations over the bank’s future are in a crucial phase, as House Majority Leader Eric Cantor (R-Va.) and House Minority Whip Steny Hoyer (D-Md.) haggle over differences, with a goal of moving a reauthorization bill as early as next week.
Typically reauthorized every four years, the bank is fast approaching its lending cap of $100 billion. At issue are the length of the bank’s charter and how high to raise the cap. Proposed lending limits have ranged from $113 billion to $140 billion, with talk of a compromise in the $130 billion range.
Trade groups whose members have relied increasingly on the Ex-Im Bank for export financing didn’t anticipate such a tough fight. Past reauthorizations have been largely noncontroversial, with lobbying falling to the Coalition for Employment Through Exports, a tiny trade association with a $25,000 advocacy budget and a two-person staff.
But when a deal to reauthorize the bank as part of an omnibus spending bill fell apart in December, bigger business groups such as the chamber and the National Association of Manufacturers stepped in to help lead a coalition that included Boeing, the Aerospace Industries Association and the Business Roundtable. The bank’s champions blanketed Capitol Hill and unleashed ads, position papers and letters from businesses and governors all over the country.
That wasn’t enough to secure a second deal to reauthorize the bank as part of the Senate’s JOBS Act, which was scuttled in part by opposition from tea party champion Sen. Jim DeMint (R-S.C.). Amid growing anti-government sentiment within the GOP, the bank has emerged as a cause célèbre for the such conservative groups as the Club for Growth and Heritage Action for America, which have called for its closure.
The club’s increasing heft is reflected this year in its influential super PAC, which, with $5.2 million in receipts, is among the top 10 super PACs, according to the nonpartisan Center for Responsive Politics. The club has waded into GOP primaries and will count Ex-Im Bank reauthorization on its key vote scorecard.
“The good news is that we’re having this debate, that the reauthorization is being examined, I think, to a greater extent than it ever has before,” Chocola said. “So we’ll continue to advocate basically for the elimination of the Ex-Im Bank because we think it’s a market-distorting effort that puts the taxpayer at risk.”
Delta supports the bank’s reauthorization, with conditions aimed at applying more scrutiny to bank loans and loan guarantees. But Delta has also benefited from Ex-Im Bank financing, the bank itself recently pointed out. On April 5, an Ex-Im Bank press release touted an $84.8 million loan guarantee to a Brazilian airline that will use engine maintenance services provided by a Delta subsidiary.
“Ex-Im financing supports highly-skilled Delta jobs in Atlanta,” the release declared. Delta officials have downplayed the loan as unrelated to its concerns over financing that benefits the airline’s foreign competitors.
Ex-Im Bank allies have also quietly let it drop that the family company Chocola ran before his election to the House, an Indiana agricultural equipment and manufacturing business, benefited from the bank’s assistance. Customers in foreign countries received Ex-Im Bank loans to buy equipment from Chocola’s company, according to National Journal.
“People can try to distract [from] the issue, but it doesn’t change the issue,” said Chocola, who noted that he did not recall the loans in question. The bank, he said, “is still a taxpayer-funded, market-distorting program.”
The House is expected to take up the reauthorization first. At a hearing of the Senate Banking Committee on Tuesday, Sen. Charles Schumer (D-N.Y.) said the Senate could “quite easily” vote again on the matter but that “the concern, of course, has been the House.”
The issue has driven an “unwanted wedge” between the tea party and the business community, Schumer said. He added: “Mainstream Republicans don’t want this fight. In fact, they’re embarrassed by it.”