CQ TODAY ONLINE NEWS
March 14, 2012 – 2:25 p.m.
Ex-Im Bank Puts House GOP in a Tight Spot
By Joseph J. Schatz, CQ Staff
Senate Democrats are turning up the heat on Republicans to reauthorize the Export-Import Bank, as House Majority Leader
The small export financing agency has become an unlikely political football this election year, providing Democrats an opportunity to highlight GOP divisions while bolstering their manufacturing platform with a measure strongly supported by business groups.
Cantwell’s state is home to aircraft manufacturing giant Boeing Corp., the United States’ largest exporter by value and long the biggest beneficiary of the Ex-Im Bank’s export-financing activities.
Cantor, R-Va., opposes the effort to tack the Ex-Im provision onto the securities bill. But in this case, Cantor and other Republican leaders are stuck between conservative opponents of the export financing agency, including outside groups such as the Club for Growth and Heritage Action for America, and business groups that want the bank’s lending authority expanded.
Cantor appears to be trying to fashion a package that will satisfy both sides and win passage in the House. But it remains unclear whether his evolving proposal would force substantial changes to the Ex-Im Bank’s activities or constitute more of a face-saving fig leaf.
There is a clock ticking on the effort. The administration expects the bank to reach its $100 billion lending limit in the coming months and is pushing lawmakers to lift the cap, while also reauthorizing the agency, in the face of increasing competition from export agencies in China, India, Canada and other countries.
The bank provides credit financing and direct loans to foreign buyers of American goods. Business groups, including the National Association of Manufacturers, support the bank and are urging Congress to complete the reauthorization. The manufacturers group said the bank’s credit financing last year backed exports that supported some 290,000 jobs.
GOP Divided, Airlines Opposed
But the bank has become one of several points of division between the Republican Party’s traditional pro-business allies and its more free-market members. Some conservatives have been urging congressional leaders to overhaul or kill it; critics contend that the bank’s support amounts to corporate welfare for large companies.
U.S. airlines also have registered their opposition to the Ex-Im Bank in recent months, with Delta Airlines at the forefront charging that the bank’s financing unfairly helps competing foreign airlines by easing the path for those carriers to buy Boeing aircraft.
Cantor said he is working on an alternative Ex-Im package that would address some of the concerns of conservatives.
“The House is working toward a bipartisan solution for the Export-Import Bank that will include reforms and begin to set a long-term policy goal to eliminate these subsidies going forward,” a Cantor aide said, adding that Cantor hopes to have the bill on the floor by the end of March.
Ex-Im Bank Puts House GOP in a Tight Spot
Democrats see the issue as a political winner, however, and are seeking to exploit divisions with the House GOP over the issue. The White House has made the Export-Import Bank part of its pro-manufacturing agenda. On Wednesday morning, Cantwell, Sen.
Schumer, D-N.Y., predicted bipartisan support in the Senate, where the amendment will require 60 votes. But he said, “The problem is probably going to be in the House. . . . The tea party faction is trying to manufacture a controversy.”
The Ex-Im Bank’s current commitments hover just under the $100 billion cap. The administration has requested the cap be increased to $140 billion, and congressional negotiators closed in on a $135 billion agreement in December. But the language did not make it into law, and instead Congress voted simply to renew the bank’s charter, which lapsed in September, through May 31.
Cantor is proposing, among other things, that before any increase in the lending cap, the bank be required to submit a plan justifying the $40 billion increase and assessing the risks it could pose. The Government Accountability Office would audit the plan.
Cantor also would require the bank to notify Congress if it reaches certain default thresholds, and to put in place plans to reduce defaults by beneficiaries.
Another provision is designed to highlight the bankruptcy of solar-panel maker Solyndra after it received a $535 million federal loan guarantee from the Obama administration. That language would prohibit the agency from becoming a junior creditor that would put taxpayer money on the line in the case of a default.
Cantor has supported Ex-Im Bank reauthorizations in the past, and Virginia has an aggressive export promotion program.