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Divides over China, fossil fuels threaten House deal to reboot Ex-Im Bank

Divides over China, fossil fuels threaten House deal to reboot Ex-Im Bank
© Greg Nash

A House bill to reauthorize and impose stricter standards on the Export-Import Bank appears to be doomed in the Senate, threatening a shutdown at the controversial agency as lawmakers near a deadline to fund the government.  

The Democratic and Republican leaders of the House Financial Services Committee were unable to strike a deal over a bill to fund and reform the Ex-Im Bank ahead of a Tuesday markup of the measure, said Rep. Patrick McHenryPatrick Timothy McHenryMaxine Waters says Biden win is 'dawn of a new progressive America' McCarthy: 'I would think I already have the votes' to remain as House GOP leader Ex-RNC, Trump fundraiser Elliott Broidy charged in covert lobbying scheme MORE (R-N.C.), the panel’s ranking member.

“The bill that we’re marking up today will not become law,” McHenry said. “I support keeping the bank open. I don’t support this endeavor today.”

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Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellImmigration, executive action top Biden preview of first 100 days Spending deal clears obstacle in shutdown fight McConnell pushed Trump to nominate Barrett on the night of Ginsburg's death: report MORE (R-Ky.) is unlikely to take up any bill passed by the Democratic-controlled House without substantial GOP support, but House Republicans are unlikely to defeat the bill in the lower chamber, which could force the Senate to produce a viable bipartisan alternative.

The panel’s chairwoman, Rep. Maxine WatersMaxine Moore WatersOn The Money: Democrats accuse Mnuchin of sabotaging economy in dispute with Fed | Trump administration proposal takes aim at bank pledges to avoid fossil fuel financing | JPMorgan: Economy will shrink in first quarter due to COVID-19 spike Democrats accuse Mnuchin of sabotaging economy in dispute with Fed Maxine Waters says Biden win is 'dawn of a new progressive America' MORE (D-Calif.), indicated in her opening statement that there would be trouble in reaching a bipartisan agreement, though she said she remained “hopeful” that Republicans would support the measure.

“I worked long and hard to compromise with ranking member McHenry on this issue, and I can tell you that we entered our negotiations earlier this year with trust and good faith,” Waters said.

“But ultimately, there were certain provisions that the ranking member felt strongly about that undermined our goal of reaching a broad, bipartisan consensus on the committee," she continued.

House lawmakers have struggled to reach a deal to reboot the Ex-Im Bank after undoing a 2015 push from conservatives to defund and hinder the trade subsidizer. Established in 1934, the Ex-Im Bank extended loans to foreign countries to buy U.S. goods, and operated with minimal controversy until earlier this decade. 

McHenry’s Tuesday warning comes after a deal he struck with Waters to reboot Ex-Im fell apart in June over objections from Democrats.

Democrats are broadly supportive of Ex-Im, but many GOP lawmakers argue that the bank extends too much financing to Chinese firms and distorts markets with “crony capitalism."

Progressives, meanwhile, are pushing for an amendment to limit loans to companies involved in fossil fuel extraction, production and distribution, citing the increasing damage of climate change.

Democratic support for a bill unveiled by Waters and McHenry in June crumbled over a provision that banned Ex-Im from issuing loans to any company that is more than 25 percent owned by the Chinese government.

Republicans insisted that the provision was crucial to curb China’s push to dominate the global economy and develop insurmountable technological advantages over the U.S.

"Ex-Im support for the Chinese government is unacceptable to me and my Republican colleagues, but apparently a priority for certain Democrats," McHenry said. "If we report this bill out absent the China provisions, will be on the wrong side of history and this long term conflict we have with Chinese aggression."

But some Democrats argued that the ban was too expansive and covered noncontroversial commerce between the U.S. and China. Rep. Denny HeckDennis (Denny) Lynn HeckExclusive: Guccifer 2.0 hacked memos expand on Pennsylvania House races Heck enjoys second political wind Incoming lawmaker feeling a bit overwhelmed MORE (D-Wa.), a fierce supporter of Ex-Im, suggested that McHenry's attempt to reintroduce the rejected June deal was an attempt to sabotage the bill.

"Let's not pretend like anybody's fooling anybody. You're not friend of the bank, sir. And you've always wanted it to go away, sir. And this is another means for you to achieve that objective to make it go away," Heck argued.

McHenry shot back that he voted against 2015 efforts to overrule GOP leadership to reopen Ex-Im over procedural issues, and ripped Heck for "never" asking why. 

Though Waters on Tuesday introduced an updated version of the bill meant to address some of those concerns, McHenry said the offer does "a huge disservice to the bank and to small exporters.”

“This bill says to their competitors, ‘We want China to continue to dominate the United States now and in the future,’ and I think this is a huge missed opportunity,” McHenry said.

He added that he has “a great deal of certainty that we will be able to keep the bank open [with] bipartisan cooperation between the House and the Senate and the White House.”

If both chambers and the White House cannot strike a full bipartisan deal before government funding expires on Nov. 21, lawmakers will be forced to renew funding for Ex-Im without making long-sought structural changes.

Updated at 4:52 p.m.