Republicans running for the Senate in 2014 are caught in the crossfire between the Tea Party and the Republican establishment over the Export-Import Bank.
Once an obscure issue that rarely attracted attention outside the Beltway, the fight over whether the bank should be reauthorized has become a major political brawl and a litmus test of sorts for many groups on the right.
“It’s an enormous headache for some candidates, particularly if your state or district receives a significant boost from Ex-Im financing,” said a senior Republican strategist who doesn’t support reauthorizing the bank’s charter.
Virginia Republican Senate nominee Ed Gillespie is among the candidates who have staked out a firm position. He listed only Ex-Im, when the Charlottesville Libertarian Examiner asked him for three government programs he’d like to nix.
Gillespie said Ex-Im “doesn’t deserve to be continued” and “should not be reauthorized.”
The man Gillespie hopes to replace in Congress, Sen. Mark Warner (D-Va.), struck back with an endorsement of the bank.
“[Gillespie] is unable to name even three federal programs he would be willing to cut, and the only one that came to mind — the Export-Import Bank — actually makes money for the taxpayers and is a key export tool for dozens of Virginia businesses,” Warner campaign spokesman David Turner said in a statement.
Staying on good terms with the Republican grassroots could be critical to Gillespie’s chances, the strategist noted.
“This will largely be a base election, and you don’t want to be labeled by the conservative grassroots as a supporter of ‘crony capitalism,’ ” the senior GOP strategist said.
Ex-Im could also prove a headache for Rep. Shelley Moore Capito (R-W.Va.), the candidate Republicans hope will boost their chances at a majority by winning a GOP Senate seat in West Virginia — a prize that has eluded the party for decades.
Capito, who previously voted to support Ex-Im reauthorization, last month said she couldn’t support the bank because of its restrictions on financing for coal-fired power plants overseas.
But that position could provide Capito with wiggle room if lawmakers include provisions in a final Ex-Im bill that overturn the coal restrictions.
Capito’s office declined repeated requests for comment about Ex-Im.
“I bet most Republicans are happy to listen to both sides of this debate and are not taking a position until they really have to,” said John Feehery, a Republican consultant who worked for former Speaker Dennis Hastert (R-Ill.).
Feehery, a columnist with The Hill, said the issue of Ex-Im remains a “small fish in a big pond,” but that Republican incumbents specifically must ensure their constituents know they are paying attention to the issue and its effect on jobs in their districts.
Linda Dempsey, vice president of international economic affairs for the National Association of Manufacturers, said the debate in Washington “is spurring candidates to ask more questions.
“The level of intensity has certainly increased in recent weeks. It is not a one-way street.”
Dempsey said members of both parties have become increasingly aware of the jobs created by Ex-Im in their districts, thanks to the lobbying efforts of business groups.
“With some companies already reporting that they are losing deals and laying off workers due to the uncertainty over congressional action on Ex-Im, this is very much getting to the heart of what most pundits believe this election is about — jobs and the economy,” she said.
Another business source said that incumbent Republicans facing Tea Party challengers are tacking to the right “to keep their powder dry” to give House Financial Services Committee Chairman Jeb Hensarling (R-Texas) a chance to work through the issue.
Still, some Republicans are arguing that the bank is needed but should be reformed.
Sen. Lindsey Graham (R-S.C.), who is up for reelection this year, told The Hill he’s “thinking about” co-sponsoring legislation from Sens. Joe Manchin (D-W.Va.) and Mark Kirk (R-Ill.) that would reauthorize the bank and make reforms.
“I don’t feel under pressure,” Graham said. “I’ve been out there for years on this. I’ve [in the past] led the effort to reauthorize it. ... I’m not going to unilaterally disarm. China has Ex-Im banks; the French have two; our competitors throughout the world have it. There’s no free trade going on out there. If you can address that problem, I’ll be glad to dismantle the bank, but that’s not going to happen.”
“I’m not frustrated — I’m just committed to seeing the bank reauthorized because it could be a deathblow to the economy of South Carolina,” Graham said.
Tea party groups such as Heritage Action and Club For Growth are fighting aggressively against reauthorization, arguing the bank is “crony capitalism” and “corporate welfare.” But it remains to be seen whether the battle will resonate in November.
“Most voters have never heard of Em-Im Bank, so I doubt it will become much of a campaign issue,” Feehery said.