A debate over reauthorizing the Export-Import Bank is threatening to deepen tensions between House conservatives and the Republican leadership, prompting Majority Leader Eric CantorEric CantorRyan reelected Speaker in near-unanimous GOP vote Financial technology rules are set to change in the Trump era Trump allies warn: No compromise on immigration MORE (R-Va.) to tread carefully after striking a deal with Democrats in 2012.
The authorization for the bank expires at the end of September, but the chairman of the Financial Services Committee, Rep. Jeb Hensarling (R-Texas), is already trying to rally conservatives against the move after watching the leadership sidestep his committee on a flood insurance bill earlier this year.
The bank is a credit agency that helps U.S. companies sell goods overseas. It authorized $27.3 billion in exports in the last fiscal year, and supporters argue that it is a self-sustaining entity that has supported more than 1 million jobs over the last five years at a minimal cost to taxpayers.
But conservatives have derided it as a form of corporate welfare, and the central debate on the right is whether to reauthorize it at a smaller scale with reforms or to allow its charter to lapse on Sept. 30.
“I believe there are a number of reforms that should be had if this program is going to be reauthorized,” Hensarling said at a committee mark-up in March, speaking in opposition to a Democratic amendment to reauthorize the bank. “I for one remain skeptical that taxpayers ought to be on the hook for this book.”
In a private meeting of the conservative Republican Study Committee (RSC) this week, Hensarling stood up to advocate for ending the bank entirely, according to several people in the room. Hensarling said the bank represented “cronyism” and “corporate welfare,” presenting conservatives with the choice of being “pro-free enterprise” as opposed to merely “pro-business.”
Hensarling said he would listen to members who want to reauthorize the bank with reforms, but he argued that it should be allowed to lapse without congressional action.
In the same meeting, Rep. Paul Ryan (R-Wis.), also pushed for allowing the charter to expire, arguing that Republicans should not support what conservatives consider corporate welfare programs at the same time as they are advocating cuts to individual welfare programs like food stamps, according to people in the room.
The remarks came in the midst of a 45-minute discussion in which some lawmakers backed Hensarling’s position while others pushed for reauthorizing the bank with reforms. Lawmakers and aides said the full RSC has not taken a formal position on the issue.
Rep. Bill Huizenga (R-Mich.), who is heading a working group on the issue, said a simple reauthorization is an “absolute non-starter.”
“There needs to be significant change and reforms to this to shrink the footprint, shrink the exposure that the American taxpayer has,” he said.
The debate will be another significant test for Hensarling, a former RSC leader who served as chairman of the full Republican conference in 2011-2012 before leaving the leadership team to take the reins of the Financial Services Committee.
Hensarling has struggled to advance his priorities and build consensus in his first fifteen months on the job. His proposal to wind down the mortgage giants Fannie Mae and Freddie Mac has not made it to the House floor despite passing out of committee more than nine months ago. And Cantor went around him earlier this year to negotiate an agreement with the top Democrat on his committee, liberal Rep. Maxine Waters (Calif.), on legislation to prevent a spike in flood insurance rates.
That proposal also split conservatives and passed the House over the opposition of Hensarling and a majority of his fellow committee chairmen. Conservative frustration with the current leadership teams and its treatment of Hensarling has fed talk that he could make a bid for Speaker or another top post next year.
Complicating the dynamic, Hensarling’s committee will also need to find a way to navigate an extension of the Terrorism Risk Insurance Act (TRIA) later this year.
That program provides a government backstop that helps private insurance companies cover the huge amount of costs that can occur after a major terrorist attack.
GOP leaders, including Speaker John Boehner (R-Ohio), have said TRIA needs to be extended before it expires at the end of the year.
But Hensarling, along with other conservatives, have expressed concern about rubber-stamping another extension of a government backstop originally billed as a temporary fix in the wake of the Sept. 11 attacks.
Outside conservative groups like Heritage Action and the Club for Growth rallied to Hensarling’s defense in the aftermath of the flood insurance debate, and two people in the RSC meeting said they viewed his comments on the Export-Import Bank as an attempt to assert his committee’s jurisdiction on the matter.
For now, Boehner and Cantor are leaving the matter in Hensarling’s hands.
“The majority leader defers to the committee to review the program and take the legislative steps that they believe are appropriate based on their review,” Cantor spokeswoman Megan Whittemore said.
In 2012, Cantor helped negotiate legislation to reauthorize the bank with Rep. Steny Hoyer (D-Md.), the minority whip. The bill passed the House with unanimous support from Democrats but drew opposition from 93 Republicans – about 40 percent of the conference. Hensarling and Ryan voted no.
In an indication of the sensitivity of the issue, when Hoyer said earlier this week he had begun preliminary discussions with Cantor on the issue, Cantor’s office pushed back to say he was not negotiating with Hoyer.
Cantor has taken heat from conservatives in recent weeks both for his moves on the flood insurance bill and his decision to call up and pass a Medicare fix for doctors by “voice vote,” skipping a full roll call vote that many Republicans planned to oppose.
Hensarling is now facing increased pressure from Democrats, who held events this week to tout the success of the Export-Import Bank in supporting job-creation and added it to the party’s “Make It in America” agenda.
Waters said the agency had generated a $1 billion profit for the Treasury in 2013, and at a forum on Tuesday, business owners testified to the benefits of the bank in helping them reach overseas markets.
“While the bank's success is clear, a number of far-right Republicans believe that the U.S. should abolish the bank,” Waters said. “Doing so would undercut U.S. businesses, resulting in lost jobs and depressed economic growth.”
Hensarling has said he plans to hold additional hearings on the bank, but Democrats are worried that he will simply take no action rather than bring up a proposal that could be altered by a coalition of Democrats and Republicans on the panel. On a budget amendment last month, GOP Reps. Peter King (N.Y.), Spencer Bachus (Ala.) and Michael Grimm (N.Y.) joined with Democrats to support reauthorization of the bank, although the measure fell short of a majority needed.
Bank officials have stepped up their advocacy efforts in recent months, and a spokesman, Daniel Reilly, said they were “optimistic Congress will reauthorize the bank as soon as possible.”
Peter Schroeder contributed.