Time is running short for the Export-Import Bank.
The agency’s critics are optimistic and its clients are nervous as the bank enters its last month before its authorization expires.
Ex-Im, as it’s known, has been the official export credit agency of the U.S. since 1934, providing credit to facilitate sales of U.S. products overseas.
Now, however, conservatives who believe that it represents an unjustified distortion of free markets have a realistic shot at bringing it to an end, as long as Congress does nothing.
“We’re feeling fairly optimistic,” said Andy Koenig, a senior policy adviser at Freedom Partners, a nonprofit group that advocates free markets and opposes the bank.
Ex-Im’s authority to make new deals expires on June 30. Attention will swing to the bank this week, however, as Congress holds three hearings on its fate, including two featuring the bank’s chairman and president, Fred Hochberg, at the Senate Banking and House Financial Services Committees.
Renewing the bank would take affirmative action by the House and Senate. As of yet, however, it’s unclear how that would happen.
Senate Democrats, who mostly support the bank, have said that Senate Majority Leader Mitch McConnell, R-Ky., promised Maria Cantwell, D-Wash., a vote on Ex-Im during a vote on a separate trade bill. Washington is home to many of the operations of the aircraft maker Boeing, which is the largest user of Ex-Im financing.
But the strongest opposition to the bank’s existence comes from conservatives in the House, where Speaker John Boehner, R-Ohio, has said he’ll respect the jurisdiction of the Financial Services panel over Ex-Im. That committee’s chairman, Texas conservative Jeb Hensarling, is the top obstacle to the bank’s re-authorization.
“I think it’s important for the GOP to say, ‘Ex-Im is not fair. This is about political connections, not merit. This prevents people from using their God-given talents to rise up the ladder of success,'” Hensarling said in an interview with Fortune in May. “I think it’s an important statement to make, and I want to help make it and I hope we succeed. If we don’t, then I guess I’ll just go home and drink a beer.”
House Majority Leader Kevin McCarthy, R-Calif., did not include any deliberation of Ex-Im in his monthly calendar released Friday.
The biggest threat to expiration is that Boehner and McConnell cut some kind of deal to pass a re-authorization with Democrats, possibly by attaching it to a must-pass bill.
“They can do it, but I think that the closer and closer we get, the less likely that becomes,” Koenig said of such a maneuver.
One rumored possibility would be to attach re-authorization to a highway funding bill that is needed before the end of July.
That scenario would involve a lapse in Ex-Im’s charter, a possibility that has some supporters nervous.
Tyler Schroeder, a financial analyst for the crop-dusting aircraft manufacturer Air Tractor in Olney, Texas, explained that an authorization lapse could mean the loss of sales opportunities that come up on a five to six year schedule. That loss would be worth it, however, if it meant that a long-term re-authorization for Ex-Im could be gained later.
Permanent expiration of the bank, Schroeder said, would cause the loss of 65-70 jobs, out of 270 total at the company, which relies on Ex-Im credit guarantees to find buyers in more than 80 countries. “Who’s going to explain to the employees that lose their jobs why they did?” he asked.
Ex-Im opponents are aware that smaller businesses supported by the bank have significant sway with members of Congress, but discount their claims as cronyism.
“Our hope is that voices of real Americans trump those of well-paid lobbyists and politically-connected corporations,” said Levi Russell, a spokesman for the non-profit group Americans for Prosperity.
Americans for Prosperity, which like Freedom Partners has received funding from the industrialists Charles and David Koch, is planning to keep pressure on lawmakers until the June 30th deadline and after to try to ensure that the bank isn’t resurrected.
Russell said the group would mount a phone campaign to have activists call 70 Republicans who have not yet declared a stance on Ex-Im and ask them to oppose it. A previous such campaign resulted in 20,000 calls to members of Congress.
Club for Growth representative Doug Sachtleben said the free-market group would likely continue airing ads against Ex-Im in key markets. They recently ran ads in the Texas district of Bill Flores, the chairman of the conservative caucus known as the Republican Study Committee that recently came out against re-authorization.
In an unusual move for the fiscally conservative group, the Club for Growth also aired ads praising liberal Democratic congressman Alan Grayson, an Ex-Im critic and potential challenger to Rep. Patrick Murphy in the Florida Senate primary. Some liberals also regard Ex-Im financing as favoritism for corporations.
Although many Republicans favor Ex-Im’s continued existence, conservatives claimed the opposition of top members of congressional leadership and presidential candidates as evidence of growing support for ending it.
All the likely GOP presidential candidates, with the exception of South Carolina Sen. Lindsey Graham, have come out against the bank, noted Heritage Action representative Dan Holler. “There’s tons of political cover” for opposing Ex-Im, said Holler. “This is an easy position for Republicans to take.”
Heritage Action has counted 92 House Republicans who have stated opposition to re-authorization, and Holler claimed that almost as many more are quietly against it.
“My outlook is grim,” warned Jeff Darley, the chief operating officer of the W.S. Darley and Co., a Wisconsin business that exports fire trucks and pumps and uses Ex-Im loan guarantees for some deals.
Darley said that Ex-Im loans account for 20 percent of W.S. Darley’s business, which earns $170 million annually and accounts for 150 jobs. “I think there is some small bipartisan support. In my heart I’m hoping it goes through,” said Darley, but it’s a “dead-even race right now.”
