Since the Export-Import Bank was founded in 1934, Congress has methodically renewed its charter two dozen times with little or no controversy, attesting to the independent federal agency’s low-key, generally well-regarded mission of helping to finance U.S. companies’ overseas sales.
This year, however, with Congress at its dysfunctional worst, it’s different. In the Senate, reauthorization of the bank enjoys bipartisan support, but Democrats and Republicans can’t agree on a voting process. In the House, Republicans are torn between their business allies, who are strong Ex-Im backers, and conservative groups that say the agency should be eliminated. Add to that a dispute between Boeing, a major beneficiary of the bank’s financing, and Delta Air Lines, which says such financing has hurt its bottom line.
House leaders said Friday they came up with a plan that could, if it satisfies House critics and Senate supporters, keep the bank in business.
The bank’s current charter expires at the end of this month. At about the same time, the institution will hit its statutory lending cap of $100 billion.
In March, Senate Democrats proposed renewing the bank’s charter for four years and raising the lending cap to $140 billion. But when they tried to attach that to a bill promoting small business investment, Republicans shot it down.
Republicans said they were happy to take up the bank’s renewal as a separate measure subject to a few amendments but didn’t want it slowing down passage of the small business bill. Senate Majority Leader Harry M. Reid (D-Nev.) insisted, saying the renewal needed to be attached to the small business measure, or another bill heading for passage, to have a chance of getting through the House.
That moved the action to the House, where Majority Leader Eric Cantor (R-Va.), who originally sought a shorter and more restrictive reauthorization, and the House’s second-ranked Democrat, Steny H. Hoyer of Maryland, have been working for weeks on a compromise.
Their proposal would extend the life of the bank for three years, gradually raising its ceiling cap to $140 billion. It also, in a gesture to Delta, directs the Treasury secretary to initiate multilateral talks on reducing, and eventually eliminating, federal export subsidies for aircraft.
The agreement, Hoyer said, “ends the uncertainty so many of our businesses have faced as the deadline for Congress to act approaches.” It is slated for a House vote next week.
Bruce Josten, the executive vice president of the U.S. Chamber of Commerce, in a statement to lawmakers said a failure to find a solution and extend the bank’s life “would amount to unilateral disarmament in the face of other nations’ aggressive trade finance programs.”
The Export-Import Bank provides financing support for about 2 percent of U.S. exports, stepping in when private banks leery of more risky foreign sales are reluctant to offer the credit that the U.S. company needs for working capital or the foreign buyer needs to secure a loan. Most of its support comes in the form of loan guarantees, but it also offers direct loans and credit insurance.
The bank says its transactions supported some 290,000 American jobs at no cost to taxpayers. It operates through fees and interest charged its customers and over the past five years has paid $1.9 billion into the Treasury.
Still, conservative groups such as the Club for Growth and Heritage Action for America are urging lawmakers to reject Ex-Im Bank reauthorization and have made it a “key vote” in how they rate lawmakers’ records. The groups say the bank distorts markets and picks winners and losers in the private sector. “Not only should members of Congress reject this expansion of authority, but they should reject the bank’s charter and shut it down for good,” the Club for Growth said.