If anyone doubted that politics makes strange bedfellows, consider this: In the battle to renew the Export-Import Bank, Senate Democrats are lining up behind the U.S. Chamber of Commerce, while many Republicans are in sympathy with Democratic Sen. Elizabeth Warren, the iconic foe of crony capitalism.
The battle over the Ex-Im Bank will heat up in Congress when lawmakers return July 7. The break between pro-business Republicans and Tea Partiers has scrambled the usual political order, and Senate Democrats are now leading the push for reauthorize the bank before its current charter expires on Sept. 30.
The Ex-Im Bank has existed for 80 years, guaranteeing and providing loans that enable foreign companies to purchase U.S. goods.
But it has fallen out of favor with conservative Republicans who increasingly view it as a form of crony capitalism that carries big financial risks for U.S. taxpayers, echoing concerns that used to come more from the Left.
Despite support for the bank by the Chamber of Commerce and other business groups, House Republicans are leaning against taking up the bill in their chamber, leaving it to the Senate Democratic majority to make common cause with the business community.
The Senate's No. 3 Democrat, Rep. Charles Schumer, D-N.Y., announced in a joint call with business leaders that the Senate aims to pass reauthorization in July, before both chambers depart for the summer.
“Our hope is we can get the bill up quickly to the floor at some point before the August break,” Schumer said. “If we can pass it in the Senate with a good bipartisan majority, that will put pressure on the House.”
Speaker John Boehner, R-Ohio, has refused to commit to a vote and won't even say whether he personally supports the bank, though it has been reauthorized under his watch in the past.
After meeting privately with rank-and-file Republicans in June, Boehner said his conference is split on the matter, and he doesn’t want to influence the outcome by taking sides.
“I want to get our members to a place where they are comfortable,” Boehner said. “Whatever that is.”
Growing dissatisfaction with the Ex-Im Bank among Republicans stems in part from the influence of conservative groups such as the Heritage Foundation and Club for Growth, which have criticized its loans as a form of corporate welfare.
The bank has also inflicted some damage on itself, sponsoring failed companies such as Solyndra and Enron, and guaranteeing loans for big corporations such as Boeing and General Electric. Ex-Im is often derided as "Boeing's Bank."
Measured by dollar amounts, roughly 80 percent of Ex-Im's financing in 2013 went to big businesses.
The bank has also provided loans and loan guarantees to foreign firms, including ones in China, that compete against U.S. companies, and it has been accused of providing loans to non-existent companies that funneled the money to violent Mexican drug cartels.
The bank’s reputation suffered another blow last month when four employees were removed amid accusations that they steered loans to companies and accepted kickbacks.
“It’s clearly time for all the members to take a serious look at this,” Boehner said when asked about the bank’s renewal.
House Majority Leader Kevin McCarthy, R-Calif., is opposed to reauthorizing the bank, as is House Financial Services Committee Chairman Jeb Hensarling, R-Texas, whose panel has jurisdiction over the bank and would be in charge of drafting legislation to reauthorize it.
But Democrats aren't giving up.
House Democrats have authored legislation that would reauthorize the bank for seven years. Democrats have joined with business leaders in a public relations campaign portraying Ex-Im as an institution that boosts American jobs by helping small businesses compete in the global marketplace.
Sen. Maria Cantwell, D-Wash., who heads the Senate Small Business Committee, noted that nine out of 10 Ex-Im Bank transactions last year involved small businesses.
Even the big businesses that Ex-Im supports, such as Boeing, rely on thousands of small businesses to help manufacture and move products, she said.
If the bank is not reauthorized, she warned, “200,000 jobs hang in the balance.”
Cantwell was joined in a teleconference this week with business owners who benefited from Ex-Im loans and loan guarantees.
Among them was Rick Burke, vice president of Measurement Technology, based in Seattle.
Burke's company builds mannequins used in safety tests. He said about 20 percent of his company's jobs are based on sales to foreign countries, including Poland, Singapore and Nigeria. Ex-Im has made those sales possible, he said.
“They pre-qualify each contract,” Burke said. “Without this cash flow security, we couldn’t go after these contracts.”
Pressure from the business community is likely to force Republicans to at least consider a reauthorization bill that includes reforms that would satisfy the GOP.
In June, 41 House Republicans sent a letter to Boehner, calling on him to bring a reauthorization measure to the floor for a vote, even if it must include changes.
“Given our nation’s fragile economic recovery,” the lawmakers wrote, “we must continue to promote U.S. exports and create American jobs and not disadvantage U.S. manufacturers in a competitive global marketplace.”