By Kevin Cirilli - 06/22/14 06:00 AM EDT
Business groups fear the shake-up in House leadership will set back their efforts to renew authorization for the Export-Import bank.
With Rep. Steve Scalise (R-La.) -- an Ex-Im critic during the 2012 battle -- jumping into the majority whip post, supporters of the bank say a divided GOP leadership is unlikely to push for a longterm renewal of the bank’s charter, which expires Sept. 30.
The federally backed bank, established in 1934, helps finance American businesses' foreign sales. Supporters say Ex-Im is needed to help U.S. companies stay competitive in foreign markets. Critics say it's corporate welfare designed to pump money for big business.
"Now that Scalise is in leadership, we hope that the looks at it from our perspective," said John Hardy, president of the Coalition for Employment Through Exports, which is actively supporting Ex-Im. "It's relatively unknown what he'll do. This is his first test and he's very new. He has to get acclimated. He's no longer just a congressman."
Scalise's office did not respond to repeated requests for comment.
Hardy said that when former-Majority Leader Eric Cantor (R-Va.) -- their top political ally in the House -- unexpectedly lost earlier this month to tea partier Dave Brat, business groups went into overdrive in lobbying for the bank's reauthorization.
"It was startling and it made us realize that the need to up the ante," Hardy said. "Everybody's trying to read the tea leaves."
They're also questioning whether new Majority Leader Kevin McCarthy (R-Calif.), who supported Ex-Im in 2012, has enough political clout to overshadow Financial Services Committee Chairman Jeb Hensarling (R-Texas), another critic of the bank.
As part of his bid to become majority leader, McCarthy told his Republican colleagues in a closed-door meeting that he wouldn't overstep Hensarling on Ex-Im -- a major blow to the bank's future. The bank expires if the House doesn't produce a bill to reauthorize it, and Hensarling's committee has jurisdiction on the issue.
But if McCarthy were to bring a bill to the floor without Hensarling's approval, it could stoke the feud between the GOP establishment and the tea party just months before the midterm elections.
Some speculate it would hurt McCarthy's political future, provided he has to run for another leadership election in November. That’s because, if tea party members continue to oppose, McCarthy could be seen as willing to break the so-called Hastert Rule, in which the Speaker only allows votes on legislation supported by "the majority of the majority" party.
For Hensarling, too, the political battle is risky.
"If Ex-Im gets reauthorized, it could end up looking like Hensarling lost, but it could also look like he helped get the grassroots even more rallied together on the issue," said Tim Carney, an economics fellow at The American Enterprise Institute, which opposes Ex-Im reneewal.
Hensarling has been one of Congress's most vocal opponents of the bank, which tea party conservatives have criticized as "cronyism" and "corporate welfare." The 2012 reauthorization bill passed 330-93, eight not voting and no Democrats opposing the legislation.
But in 2012, Rep. Spencer Bachus (R-Ala.) helmed Financial Services. While the 2012 reauthorization battle was a headache for businesses, they had about four to six months to prepare for a battle.
Not this go-round. Bachus is out as chairman and Hensarling in. it is only weeks until the August recess and neither chamber has yet introduced a reauthorization bill.
"We have no idea of a timeline this time," said Daniel Pinho, senior vice president for trade finance at PNC, which is also actively supporting reauthorization. "Right now, we don't have anything to even work with."
And this time around prominent tea party groups have been more active on the issue, leaving business groups scrambling to strategize in a time crunch and without a powerful ally in the House. Heritage Action, The Club For Growth and Americans For Prosperity (AFP) have all upped their opposition to reauthorization.
"The fight over reauthorization a couple years ago was nowhere near the intensity and the scale that there is now," said Levi Russell, AFP director of public affairs.
Tea party groups and their allies in Congress are now in a full-fledged policy war against Ex-Im supporters, such as The Financial Services Roundtable, The Coalition for Employment Through Exports, and The Chamber of Commerce.
Sens. Joe Manchin (D-W.V.) and Mark Kirk (R-Ill.) are working on a reauthorization bill in the Senate, but it's unclear who on the House Financial Services Committee will buck Hensarling and propose a bill of their own, according to sources familiar with the issue.
"For the business community, the bottom line is that we need a reasonable bill and continuity so companies can rely on it," Hardy said.
Meanwhile, Reps. Charles Boustany (R-La.), Chris Collins (R-N.Y.) and Gregg Harper (R-Miss.) are circulating a letter sponsored by the U.S. Chamber of Commerce and the National Association of Manufacturers that calls on Congress to reauthorized the bank.
That letter was supposed to close Friday, but now is remaining open until Monday, according to spokespeople for the offices supporting the letter.
Choosing to support or oppose Ex-Im could prove a thorny issue for Republicans who are up for reelection, forcing them to pick sides between the establishment GOP and the more consevative tea party.
"Our mission is not to make Republicans happy or to get Republicans elected, it's to fight for free market principles," AFP's Russell said.
Business leaders have flooded Capitol Hill in recent weeks, with more visits planned for June and July, touting to lawmakers about how Ex-Im has helped businesses in their districts. But whether that will be enough to overcome tea party opposition remains the big unknown.
"The bottom line is that Ex-Im's past of automatic bipartisan renewals without a floor vote are over," Carney said. "The agency is going to have to continue to justify its existence -- if it does continue to exist."
Hensarling is set to chair a hearing on the issue Wednesday, in which Ex-Im Chairman Fred P. Hochberg is slated to testify.