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The U.S. Export-Import Bank, derided by conservative critics as an expensive boondoggle, may win a reprieve from what looked like almost certain death in Congress if enough Republicans can be persuaded to let it live on, but with its wings clipped.
Some Republicans who were once opposed to extending Ex-Im’s mandate beyond the end of September are now reconsidering, worried that killing off the bank that provides financing to foreign buyers of U.S. exports could leave the nation’s companies at a disadvantage against foreign competitors.
Others are staying on the fence, waiting to see details of proposals floated by lawmakers in both parties to reform Ex-Im Bank by, for example, stopping it from funding deals with foreign state-owned companies or favoring green exports.
Democrats are generally supportive of the bank.
Representative Trey Gowdy, who voted for the bank’s reauthorization in 2012, said he was discussing the issue with fellow Republican and South Carolinian Mick Mulvaney, who voted against it.
“I’ve got to see what Congressman Mulvaney and Chairman Hensarling and all the rest of my friends on (the) financial services (committee), what reform package they come up with,” Gowdy said.
Republican Jeb Hensarling, who chairs the House Financial Services Committee that has oversight of Ex-Im, has called for Ex-Im’s closure. His committee, however, includes members who have started working on possible reforms to the bank instead.
The mandate to renew Ex-Im’s charter passed handily in 2012, when Democrats voted to renew it and were joined by 147 Republicans, with 93 against.
Positions have since hardened against the 80-year old export bank, which provides loan guarantees and insurance to local exporters as well as helping foreign companies finance purchases of U.S. goods. Tea Party conservatives say the bank provides a “sweetheart” deal to well-connected companies.
“Conservatives want to stand up for ordinary Americans, and that means ending corporate welfare,” said Representative Justin Amash, sponsor of a 2013 bill to terminate the bank.
Ex-Im’s foes gained a victory this week when Kevin McCarthy, newly elected to the No. 2 job in the House, said he does not favor renewing the bank’s charter. For the bank to survive, both the Senate and the House of Representatives must vote to reauthorize it. President Barack Obama would also have to sign the bill. The White House has been strongly supportive of the bank.
House leaders could face pressure to bring reauthorization to a vote if rank-and-file Republican lawmakers hear enough complaints from their constituents in the business community.
Corporate giants like Boeing Co. and Caterpillar Inc. are big beneficiaries of Ex-Im but many lawmakers have small businesses in their districts that also benefit.
Representative Kay Granger, a Texas Republican who has supported the bank in the past but was undecided earlier this week, told Reuters on Thursday she had decided to back it again this time after hearing from constituents.
“I talked to some people that were not in favor of it,” Granger said. “But I think that it’s very important to our businesses … and they made a very strong case.”
Forty-one House Republicans signed a letter this week in favor of renewing Ex-Im’s’s charter. That’s enough, combined with Democrats, for a majority in the House but if leaders in that chamber decline to bring the issue to the floor, the bank would be forced to shut its doors.
Several compromise proposals are in the works.
Republican John Campbell, a member of the House Financial Services Committee, has proposed reducing the bank’s lending cap by a third and reversing a ban on funding coal-fired power projects. He also wants to stop big loans to many state-owned enterprises – likely hitting airlines such as Singapore Airlines , Air China and Abu Dhabi’s Etihad, which used Ex-Im support to buy Boeing planes.
Ex-Im’s aviation finance, which accounted for almost one-third of its $27.3 billion export support in 2013, is controversial. Delta Air Lines has complained that the help to foreign competitors is unfair to U.S. companies.
At a House Financial Services Committee hearing this week, Democrat David Scott of Georgia pressed Fred Hochberg, the head of the Ex-Im Bank, on the feasibility of limits on aircraft finance. In the Democratic-run Senate, Democrat Joe Manchin said he was working on a “middle ground” reauthorization bill that he hopes Republicans could accept.
But many Republicans are still undecided.
Florida Republican Ileana Ros-Lehtinen said her office had received calls from businesses in her district that had benefited from Ex-Im support.
“I’ve always voted for it, but in these tight and lean times, I think they have to justify themselves anew,” she said.
Republican Representative Todd Rokita, who voted against Ex-Im in 2012, said he was having second thoughts because other countries provide export help and closing Ex-Im could mean “unilaterally disarming.”
“If the governments of the rest of the industrialized world are doing this, then it’s a question of fairness to our own folks,” he said.
(Writing by Susan Cornwell and Krista Hughes; Additional reporting by Krista Hughes and David Lawder; Editing by Andrea Ricci)