Several Republicans on Wednesday voiced support for extending the charter of the Export-Import Bank as long as a new authorization bill includes several reforms.
The lawmakers said they were worried that conservative calls to let the bank’s charter expire at the end of September could be an overreaction to criticism that the bank is picking winners and losers in the economy and is part of a culture of “crony capitalism.”
“This is about, for me, the jobs in my district,” Rep. Stephen FincherStephen Lee FincherTrump announces, endorses ambassador to Japan's Tennessee Senate bid Lamar Alexander's exit marks end of an era in evolving Tennessee Tensions on immigration erupt in the House GOP MORE (R-Tenn.) said.
“Please, let’s don’t overreact,” he said. “Let’s try to fix this investment. Let’s make it better. Let’s get back to the original mission of the Ex-Im Bank and don’t hurt jobs in our district.”
Fincher’s comments were notable because he voted against reauthorizing Ex-Im in 2012.
Rep. Steve Stivers (R-Ohio) also voiced support for reauthorization and warned that ending the bank would be a form of unilateral disarmament by the United States.
“Many of my colleagues do well in the theoretical world, but I live in the real world,” he said. “And 41 countries have export finance agencies. I think [Rep. Brad] Sherman [D-Calif.] talked about ‘unilaterally disarming,’ and I think that is a bad idea. But I think there is a way forward here.”
Even House Financial Services Committee Chairman Jeb Hensarling (R-Texas), one of the bank’s most prominent critics, spoke at Wednesday’s hearing of a need for change.
“Now I will admit that Republicans may disagree on whether Ex-Im should be reformed or allowed to expire, and I certainly hope this hearing will help illuminate that decision,” Hensarling said. “But we are united in believing we cannot reauthorize the status quo.”
The comments by Stivers, Fincher and other Republicans offered a glimmer of hope to bank supporters, who have been reeling since incoming House Majority Leader Kevin McCarthy (R-Calif.) voiced opposition to the bank on Sunday. McCarthy’s statement left observers wondering whether there was a way forward for Ex-Im this year.
Business groups that support the bank have been battling conservative pressure groups such as Heritage Action and the Club for Growth over its future. They flexed their muscles this week, sending a letter to lawmakers signed by 865 businesses across the country that demanded the bank’s charter be renewed.
Some took the mood of Wednesday’s hearing as a sign the businesses’ grassroots work is paying off.
“It’s just not appropriate. It’s not the responsible thing to do to end our authorization of Export-Import,” Rep. Pete King (R-N.Y.), who voted for the reauthorization in 2012, said at the hearing.
He said lawmakers would put the economy at risk if they do not reauthorize the bank, which offers loans and loan guarantees to businesses investing overseas. The bank’s goal is to increase U.S. exports and investments.
Opponents argue firms such as Boeing that use the Export-Import Bank’s programs could find alternative financing in the private market.
And companies such as Delta Air Lines argue that the bank’s support for Boeing has allowed state-owned airline companies to cut prices, hurting the U.S. industry.
Delta CEO Richard Anderson testified Wednesday that the bank’s charter should be extended but reformed so that it cannot finance investments in the production of “widebody aircraft to state-owned or supported airlines.”
“If we’re serious about creating jobs, this bank needs to be reformed,” Anderson said.
Export-Import Bank President Fred Hochberg offered a vigorous defense of the agency and sought to take on a damaging report this week by The Wall Street Journal that alleged Ex-Im employees received kickbacks for loans given to companies.
He noted that the employees had been punished and said the story sent the message “to our staff and to our exporters that if you’re doing any funny business, we are on to you.”
Hochberg said investigations by the agency’s inspector general continue into the issue, but he couldn’t comment on any details of the inquiry.
Rep. John Campbell (R-Calif.) has released a draft reauthorization bill that would make several changes to the bank.
In a bid to counter arguments that taxpayers could be left on the hook if businesses default on bank loans, Campbell would lower the maximum amount the bank can lend to a total of $95 billion by 2017.
Campbell would also put a limit on how much the bank can loan to foreign and state-owned businesses.
The bank argues that it is self-sustaining and has generated $2 billion for taxpayers in the past five years.
In terms of risk, it says its default rate fell to less than one-quarter of 1 percent in the first three months of the year, according to the bank’s statistics.