By Vicki Needham - 06/25/14 06:00 AM EDT
Criticism will rain down Wednesday on the Export-Import Bank as members of an influential House panel debate whether it’s time to disband the agency.
Fred Hochberg, the chairman of the embattled bank, will square off in testimony against House Financial Services Committee Chairman Jeb Hensarling (R-Texas), who is leading the charge to let the bank’s charter expire in September.
Business supporters swarmed Capitol Hill ahead of the hearing to lobby lawmakers and make the case for why renewal of the bank is important to the economy.
Francis Creighton, the executive vice president of government affairs at the Financial Services Roundtable, said the hearing would help clarify where a number of lawmakers stand on Ex-Im.
“We need to hear what Hensarling has to say about a way forward,” Creighton said.
He said even though Hensarling prefers to abolish the bank, he is “very good about bringing things to his committee and letting the committee works its will.”
“We have to work hard to try to get members to see importance of Ex-Im and hopefully get support going forward,” he said.
The hearing takes place the day after Speaker John BoehnerJohn BoehnerBoehner returns to the spotlight Cruz confronts Trump supporter Graham: 'Lucifer may be the only person Trump can beat in a general election' MORE (R-Ohio) deflated supporters of Ex-Im by deferring to lieutenants, including incoming Majority Leader Kevin McCarthy (R-Calif.), who are opposed to renewing the bank’s charter.
“My job is to work with our members to get to a place where the members are comfortable,” BoehnerJohn BoehnerBoehner returns to the spotlight Cruz confronts Trump supporter Graham: 'Lucifer may be the only person Trump can beat in a general election' MORE said. “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,” Boehner said.
Boehner’s statements further dimmed the prospects in the House for the bank, which has become a lightning rod among conservative groups that see it as a prime example of “crony capitalism” that serves the interests of corporate giants such as Boeing and General Electric.
Business groups are pushing back hard on the criticism, arguing that the bulk of the bank’s loans help small and medium-sized business.
That argument appears to be winning allies in the Senate.
Senate Republican Leader Mitch McConnellMitch McConnellReid: Judiciary a 'rubber stamp' for Trump-McConnell Iran and heavy water: Five things to know Overnight Finance: House rejects financial adviser rule; Obama rebukes Sanders on big banks MORE (Ky.) on Tuesday suggested that the upper chamber consider a reauthorization of Ex-Im despite opposition from conservatives.
“I think we ought to take it up,” McConnell said. “The last time it was up I didn’t support it, but I don’t think that’s an argument for not bringing it up.”
Senate Majority Leader Harry ReidHarry ReidKoch network super-PAC launches ad buys in Wisconsin, Nevada Trump: 'I'd have to think about' Cruz for Supreme Court Reid: Judiciary a 'rubber stamp' for Trump-McConnell MORE (D-Nev.) pressed the House to pass a bill but left open the possibility of the Senate making the first move.
“I’m not wed to who does it first,” he said.
The House hearing on Wednesday is expected to be heated, with Hochberg testifying alongside Richard Anderson, Delta’s CEO, who is an outspoken opponent of the bank.
Anderson argues that a bulk of Ex-Im’s loans help foreign airlines purchase airplanes from Boeing at a discount, putting domestic carriers at a disadvantage.
“In spite of our government’s stated goal to foster open markets free of state subsidized competition, U.S. airlines today face that very competition from our own government in the form of Ex-Im loan guarantees, subsidies that are both massive and unnecessary,” Anderson is expected to say said in his prepared remarks.
“Ex-Im provides a tangible competitive advantage to foreign carriers.”
The Aerospace Industries Association rejects that argument, and sent out an ad set to begin running on Wednesday that says abolishing the bank would give Russia, China and Europe a leg up in export competition.
Hochberg will argue in his testimony that the U.S. can’t retreat from promoting exports, given that foreign rivals are engaged in similar financing to boost their manufacturers.
“There is a strong drive to increase exports from many countries around the globe. We need to send the same signal to competitor nations that we stand behind American workers and exporters and ensure that products stamped ‘made in the U.S.A.’ are able to compete on a level playing field,” Hochberg said in prepared remarks obtained by The Hill.
Democrats, meanwhile, are seizing on the bank battle to try and portray the GOP as being out of the political mainstream.
“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. Charles SchumerCharles SchumerCruz's dad: Trump 'would be worse than Hillary Clinton' With Ryan’s blessing, lawmakers press ahead with tax reform talks Big business will never appease the Left MORE (D-N.Y.) said.
“On issue after issue, from Ex-Im to immigration reform and tax extenders, the Republican leadership in the House is choosing the Tea Party over groups like the Chamber of Commerce that used to be the bedrock of the GOP.”
Financial Services Committee ranking member Rep. Maxine Waters (D-Calif.) on Tuesday blasted McCarthy for flip-flopping his support of the bank, which she said provides millions of dollars to businesses in his district.
Democratic Whip Steny Hoyer (Md.) expressed support for a bill from Waters and Reps. Denny HeckDenny HeckHeck enjoys second political wind Incoming lawmaker feeling a bit overwhelmed MORE (D-Wash.) and Lacy Clay (D-Mo.) that would extend the bank’s charter until 2021 and provide an increase in the lending cap to $175 billion.
Bill Reinsch, president of the National Foreign Trade Council, said the renewal of Ex-Im should be a “no-brainer.”
“It depresses me that people are so willing to do things that are so bad for jobs, growth, the economy and manufacturing in particular, for a ideological goal,” he said.
“It’s like the Flat Earth Society.”
This story was updated at 8:15 p.m.