The House Republican leadership shakeup has revived a conservative-led push to terminate the nation’s Export-Import Bank, testing the GOP’s traditional alliance with business groups.
House Majority Leader Eric Cantor (R-Va.), who lost his seat earlier this month in a major primary upset, was a key backer of a 2012 compromise that staved off a push by his party’s small-government conservatives to block renewal of the bank’s charter.
The current authorization for the bank -- which helps finance U.S. exports with government-backed loan guarantees -- expires in September.
Rep. Kevin McCarthy (R-Bakersfield), in his first major interview after replacing Cantor as the House’s second-ranking Republican, told Fox News he would allow the bank’s authority to expire, arguing that it performs a function that should be handled by the private sector.
McCarthy’s view is in line with a vocal faction of the House GOP, including many lawmakers elected since the tea party wave of 2010. They view the 80-year-old institution as a relic of a “crony capitalism” that favors special interests over the needs of ordinary Americans. The chairman of the House Financial Services Committee, Jeb Hensarling of Texas, called the bank the “poster child of the Washington insider economy and corporate welfare” in a speech to the conservative Heritage Foundation last month.
Prominent business groups like the U.S. Chamber of Commerce are mobilizing to support reauthorization of the bank, which they say still plays a crucial role in boosting the nation’s manufacturing sector.
“We’ve had easy [reauthorization] votes and hard votes, and we’re going to stay after this,” Chamber President Thomas J. Donohue told reporters Monday. “The basic question we’re going to be asking members of Congress [is], ‘Where are the jobs?’”
Asked Tuesday if he would support reauthorizing the bank, House Speaker John A. Boehner (R-Ohio) indicated he would defer for now to Hensarling, whose committee will discuss the issue Wednesday.
“My job is to work with our members to get to a place where the members are comfortable,” said Boehner, calling it a “thorny issue.” “Some people believe that we shouldn’t have it at all. Others believe that we should reauthorize it with significant reforms. And we’re going to work our way through this.”
A Republican leadership aide, granted anonymity to candidly discuss the issue, said that the bank’s failure to implement reforms agreed to under the 2012 authorization have made renewing the charter more difficult.
But a spokesman for the Export-Import Bank countered that it has complied with requirements in the reauthorization, including quarterly reports to Congress about default rates.
Meanwhile, a recent Wall Street Journal report found that bank employees have been suspended or removed amid allegations of kickbacks. The reports have bolstered outside conservative groups lobbying members against the bank.
“It’s time for Congress to shut down this corporate welfare slush fund once and for all,” Club for Growth President Chris Chocola said after the report.
There are political risks to Boehner and McCarthy should they allow a vote to reauthorize the bank. Though Hensarling declined to run for a leadership position after Cantor’s defeat, he has not ruled out a potential bid for speaker or majority leader in November when the conference will choose its leaders for the next full congressional term.
The White House is again urging Congress to move quickly to reauthorize the bank, as are its allies in the Democratic-controlled Senate.
“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,” Sen. Chuck Schumer (D-N.Y.) said Tuesday.
A spokesman for the Export-Import Bank countered that it has complied requirements in the reauthorization, including quarterly reports to Congress about default rates.
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