Conservatives who have been waging a crusade against the U.S. Export-Import Bank got a boost today when John Boehner refused to say whether he’d support its reauthorization. The Speaker’s wobbling once again calls into question the notion that the “GOP establishment” has vanquished Tea Party elements within the party.

After all, Boehner is aligned with the business community, which badly wants reauthorization, but Tea Partyers have turned the issue into another intra-party test of whether GOP leaders support “crony capitalism.” New House Majority Leader Kevin McCarthy just came out for letting the bank’s charter expire this year — also noteworthy, since McCarthy is under pressure to prove his credentials as a “real conservative.”

Which means a confrontation is looming that could conceivably end in another government shutdown standoff, though right now that looks unlikely.

Senate Dem leadership aides I spoke to today say they are relishing this confrontation, and see an opportunity to further divide the House GOP, now that the issue is clearly gaining momentum on the right.

Conservatives are also apparently relishing this battle, because they think Dems will struggle to justify their support for “corporate welfare” if this gets tied up in a battle over funding the government. Philip Klein has labeled it the “corporate welfare bank,” and Conn Carroll tweeted: “please please please let the Democrats shut down government to protect the Ex-Im bank.” But for conservatives this also looks like a way to push the GOP leadership to the right, as Carroll added: “forcing votes/fights like these is how you change a party.”

Brett Lo Giurato lays out the politics and unexpected alliances at play here:

The bank provides direct loans, guarantees, and credit insurance to aid foreign purchasers in buying American-made goods. Its charter expires at the end of September, unless Congress acts to renew it…The dispute over the bank has made some unusual allies — the White House and the Republican establishment-friendly Chamber of Commerce both pressed the case for the bank’s renewal on Monday, the day after McCarthy’s comments brought the debate to the forefront.

Here’s where things could get tricky: Four top House Republicans are opposed to reauthorizing the bank — McCarthy, incoming House Majority Whip Steve Scalise, House Financial Services Committee Chair Jeb Hensarling, and House Budget Chair Paul Ryan. But their Republican counterparts in the Senate — as well as Republican governors  — have been more supportive in public statements about the bank. Moreover, GOP senators wouldn’t want to risk a shutdown with a Senate majority on the line.

How do we get from here to a government shutdown? It would start with Boehner and McCarthy holding out against re-authorization despite intense business pressure. Then Senate Dem leaders, later this summer, put reauthorization into a continuing resolution funding the government and dare House Republicans to oppose it. Then (goes the scenario envisioned by conservatives, anyway) House GOP leaders, under pressure from the right, say No to the CR. Then Senate Dems are shutting down the government to protect corporate welfare.

Fortunately for Senate Dems, there’s a long way from here until there. One scenario, suggested by Brian Beutler, is that if House Republicans do hold out against the bank, Senate Dems simply pass a clean CR funding the government and let Republicans take the blame from their donors for killing it.

A Senate Dem leadership aide tells me Dems will not shy away from pushing for reauthorization, which they will do in coming weeks.

“We’re going to make a stand-alone issue out of it,” the aide tells me, noting that Dems will highlight the fact that it “reduces the deficit and helps businesses” and has “worked for eighty years.” He adds that Dems may soon move a reauthorization bill on its own.

A second aide argues Dems can push the issue to get Republicans to consume one another over it. He notes GOP leaders will be trapped between pressure from business constituencies (national business groups and interests within the districts of individual House Republicans) and pressure from conservatives newly emboldened by “libertarian populist” David Brat’s defeat of crony capitalist Eric Cantor.

Opponents of reauthorization hope some populist Congressional Dems will join in condemning the bank (Senator Bernie Sanders has been a critic), but several aides told me they don’t expect major defections. Of course, it’s possible the politics could shift if we see more stories like this one reporting that officials at the Ex-Im bank have been suspended or removed amid allegations of gifts and kickbacks.

Still, Dem aides don’t seem fazed by the story, and the Dem posture is best summed up in this statement from Chuck Schumer:

“The Tea Party is moving the Republican Party so far to the right on important issues like the Export-Import Bank, that the business community is now farther from the Republican Party and closer to Democrats. On issue after issue, from Ex-Im to immigration reform and tax extenders, the Republican leadership in the House is choosing the Tea Party over groups like the Chamber of Commerce that used to be the bedrock of the GOP.”

 

Greg Sargent writes The Plum Line blog, a reported opinion blog with a liberal slant -- what you might call “opinionated reporting” from the left.