Export-Import Bank may get a reprieve
The Export-Import Bank, in danger of closing at the end of the month because of strong conservative opposition, neared a reprieve late Tuesday as Republican leaders included a nine-month extension of its charter in a short-term budget bill.
The provision came after House Speaker John A. Boehner (R-Ohio) told reporters that he has been working with House Financial Services Committee Chairman Jeb Hensarling (R-Texas), who has been rallying opposition to the 80-year-old agency, to find a way to reauthorize the bank’s charter before it expires Sept. 30.
“He thinks that a temporary extension of the Export-Import Bank is in order,” Boehner said.
The speaker’s comments signaled a major shift in the battle over the fate of the bank, which provides loans and other assistance to foreign buyers of U.S. products. Boehner, however, stopped short of saying the House would pass such a measure.
There is strong Democratic support for the bank as well as backing from some Republicans, a combination that makes a temporary reauthorization likely to pass as part of the overall budget bill. The Senate also is expected to approve it.
Saving the bank has been a priority of major business groups. About 3,000 U.S. companies, including 422 in California, received export assistance last year, according to the bank.
Reauthorization through June was included in a bill released by House Appropriations Committee Chairman Hal Rogers (R-Ky.) to fund the federal government after the fiscal year ends Sept. 30. A funding bill must be passed to avoid another partial government shutdown.
Lawmakers would extend the charter well short of the five years the White House wants, but long enough to draft changes to the bank’s rules of operation. It also would take a thorny issue for Republicans largely out of the election debate.
Hensarling and other conservative critics want to shut down the bank. They have said the export assistance is corporate welfare, noting that the bulk of the aid goes to large multinational companies such as Boeing Co.
The effort gained a boost when new House Majority Leader Kevin McCarthy (R-Bakersfield) said this summer that he favored closing the bank.
Hensarling said recently that a short-term reauthorization was not something he necessarily favored, but it might be needed if some of his colleagues needed more time to consider the issue.
The Obama administration, most congressional Democrats and leading business groups, such as the U.S. Chamber of Commerce, are lobbying hard to save the bank. They said it was crucial to U.S. competitiveness, noting that about 60 other countries offer similar export assistance to their companies.
The bank, which doesn’t receive any taxpayer funding, pays for its operations through interest and fees on its assistance and sends its profits to the government. As with other banks, taxpayers are on the hook for any losses. Last year, Ex-Im provided $27.7 billion in export assistance and sent a record $1.1 billion in profit to the Treasury.
“Without the Export-Import Bank, it will pretty much kill us,” said Don Nelson, president of ProGauge Technologies Inc. in Bakersfield. The company makes equipment for the oil industry and depends on bank assistance to export to Oman and other Middle Eastern countries, Nelson said.
On Tuesday, Nelson was in Washington along with executives from four other exporters, organized by the National Assn. of Manufacturers, to lobby lawmakers for a long-term extension of the bank’s charter.
Nelson said he had a meeting scheduled Wednesday with McCarthy, who is his congressman.
“I honestly believe he was not familiar with how many companies in his district use Ex-Im Bank,” Nelson said.
ProGauge has about 100 employees and generates about $40 million in sales each year. Nearly two-thirds of the business is in exports to customers in countries that private U.S. banks will not assist, he said.
“If Ex-Im goes away, I see our export business dying,” Nelson said. “I don’t see a backup plan.”
Opposition to the bank is strong.
Heritage Action for America and the Club for Growth, two influential conservative groups, wrote to McCarthy on Monday urging him to “stand strong” and let the bank’s charter expire.
“In the past several months, the bank and the private corporations it benefits have launched an all-out public relations campaign to repair the bank’s image,” the letter said.
“This simply confirms what we have said all along: The Export-Import Bank is a crony-capitalist slush fund benefiting mainly politically connected companies that receive its subsidies,” it said.
House Minority Whip Steny Hoyer (D-Md.) said Tuesday that Democrats wanted to see the bank reauthorized for at least five years.
Hoyer said he believed such an extension of the bank’s charter would easily pass the House if Republican leadership would bring it to a vote. He also said he’s open to discussing reforms that Republicans might insist on as part of renewal.
Times staff writer Lisa Mascaro contributed to this report.
