The Export-Import Bank’s charter is looking more likely to expire at the end of the month, a development that would not necessarily kill the bank but that Democrats worry would disrupt business and empower conservatives, even if the lapse is only temporary.
Ex-Im, as the bank is known, is a normally boring entity that will be at the center of politics this month as conservatives who see it as corporate welfare try to let its authorization expire.
The bank makes loans and guarantees credit to finance purchases of U.S. products overseas, with the backing of the U.S. government. But it appears increasingly likely that it will lose that authority, at least temporarily, at the end of the month.
Losing its charter will not cause the bank to cease to exist.
“None of us actually expire June 30th. The bank’s authority to make a new loan expires on June 30th, if Congress doesn’t act before that,” said Ex-Im head Fred Hochberg in an interview published by Politico this week.
Nevertheless, going past the deadline is a prospect that supporters worry could prove advantageous to the conservatives who want to kill the bank and one that Democrats argued Wednesday was already hurting business.
“There may be a strategy of opponents of the bank simply to not outright oppose it, but keep delaying and pushing it back later on,” said Todd McCracken, president of the National Small Business Association. “And by that point, the damage will be done.”
Democrats, who mostly support reauthorization of Ex-Im, hope to pass a reauthorization bill in the Senate attached to larger legislation that could get a vote in the House, where Republican opposition to reauthorization is the strongest.
In exchange for voting for separate trade legislation, Democrats received a promise from Senate Majority Leader Mitch McConnell to have a vote on a mutually agreed-upon vehicle in June, said Sen. Maria Cantwell, D-Wash., at a press conference on the bank. Cantwell is one of the top proponents of Ex-Im. Her state’s largest employer is aircraft maker Boeing, which is the biggest beneficiary of Ex-Im financing.
But Democrats also acknowledged that there was no obvious measure to attach Ex-Im to that would pass in June.
“We’re looking for some kind of miracle here,” said Sen. Amy Klobuchar, D-Minn.
Speaking on the Senate floor Wednesday morning, Democratic Leader Harry Reid of Nevada said that, despite McConnell’s promise to offer a vote on Ex-Im in June, it “appears that’s not going to happen.”
“Instead, the American people will have to endure another manufactured crisis at the hands of Senate Republicans,” Reid said.
One possible legislative vehicle mentioned by Democrats is a bill to fund highway programs that will be necessary by the end of July to avoid exhaustion of the Highway Trust Fund.
But attaching an Ex-Im bill to that measure would mean allowing a lapse in its authorization.
That would be a bad outcome, Klobuchar argued. “We’re going to have to let the bank then expire and all these operations … you’ve already heard what’s happening to their loans and to the marketplace with just the rumor out there,” she said, referring to problems some Ex-Im participants have reported because of uncertainty about the bank’s fate.
Steve Wilburn, founder and CEO of the alternative energy company FirmGreen, testified last year that his firm lost a $57 million deal in the Philippines because of buyers’ concerns about the availability of Ex-Im financing. “I take it personally,” Wilburn said Wednesday of Republicans’ efforts to end the bank.
“Let’s not pretend that this doesn’t have real-world consequences,” said Sen. Heidi Heitkamp, D-N.D., the author of a reauthorization bill in the Senate. Heitkamp referred to the $15.9 billion in deals that Ex-Im says are in the pipeline that are threatened by the possibility of the bank losing its charter.
Some allies of the bank, however, have suggested that a lapse in the bank’s charter could prove harmless or even helpful in obtaining a long-term reauthorization.
During a committee hearing on the bank Wednesday, Rep. Frank Lucas, R-Okla., said that losses to businesses supported by Ex-Im may “help us focus.”
“I’d prefer not to have that happen. That’s what it may take,” said Lucas, who favors reauthorization.
At the same Financial Services Committee hearing, Chairman Jeb Hensarling, the top conservative critic of Ex-Im, sharpened his rhetoric against the bank.
“By reauthorizing Ex-Im, my Democratic colleagues are simply throwing Wall Street a big, wet kiss,” the Texan said.
