Support for the U.S. Export-Import Bank gained momentum yesterday as some opponents said they would consider reauthorizing the agency and lawmakers sought ways to increase its oversight and aid to small businesses.
Republicans led by Representative Stephen Fincher of Tennessee, who voted against reauthorizing the bank in 2012, plan to introduce a bill that would renew it, while mandating changes in its business practices. In the Senate, a new bipartisan measure would require the bank to report more about its operations to Congress.
Without congressional action, the bank’s charter will expire at the end of September. Congress, which begins a five-week recess at the end of this week, will have 11 working days to act.
“It’s unreasonable to think that the bank is just going to end Sept. 30,” said Fincher, a member of the House Financial Services Committee that is debating the 80-year-old bank’s renewal, in an interview.
Incoming House Majority Leader Kevin McCarthy, a California Republican and member of the financial services panel, made clear last month he wanted to let the bank’s charter lapse. Yesterday, he wasn’t so adamant.
Asked in an interview whether he might back a plan to alter the bank’s business practices, he said, “The best part is, we’re working through committee. And I’d love to see a bill come out of the committee.”
Paul Ryan, the Republican chairman of the House Budget Committee who has called for the elimination of a bank he criticized as “crony capitalism,” yesterday said he would consider reauthorizing it with changes to its charter.
“Could the thing be reformed? Of course,” Ryan of Wisconsin said at a media breakfast in Washington hosted by the Christian Science Monitor. Still, he said, “there are so many more things we should be dedicating taxpayer resources to than handing it out to some select companies.”
Speaker John Boehner of Ohio hasn’t said how he’ll vote on the bank, which provides financing for foreign companies to buy U.S. goods.
In the Senate, a bipartisan group of eight led by Joe Manchin, a West Virginia Democrat, and Mark Kirk, an Illinois Republican, yesterday introduced a bill boosting reporting requirements for Ex-Im while also authorizing the bank for five years and gradually increasing its lending authority to $160 billion.
The Business Roundtable will push “very hard” to support the Senate bill, John Engler, president of the Washington-based group for corporate chief executive officers, said today in a meeting with Bloomberg News editors and reporters in Washington.
“I’d like to see the Senate act,” he said. “I think there’s a lot of support in the House, regardless of McCarthy’s position.”
The Manchin bill is in line with what President Barack Obama said he wants: a five-year reauthorization, with a gradual increase of its lending limit to $160 billion from $140 billion.
“We need to find a way forward on this,” Majority Leader Harry Reid, a Nevada Democrat, said today on the Senate floor. He said the “no-government crowd” of Republicans mostly in the House were making that difficult. “It would be a shame if we weren’t able to renew this,” he said.
Fincher said he and a number of House Republicans, who he declined to name, are winnowing a list of about 60 proposed changes to 20 or 25. The bank would have a five-year reauthorization and a limit on lending higher than $95 billion and lower than the current $140 billion. The exact level hasn’t been determined, he said.
Other potential changes being considered are the inclusion of an independent auditor for aircraft financing, a provision that would let qualified commercial lenders support small-business lending and changes to the bank’s accounting practices, Fincher said. He said his group is trying to increase participation for small businesses in a way that doesn’t squeeze out the bank’s assistance for larger corporations, such as Boeing Co. (BA:US), that receive the bulk of the lender’s financial support.
“As conservative Republicans, we don’t want to disincentivize growth,” Fincher said. “We think there’s room for everybody.”
Bank opponents, including House Financial Services Committee Chairman Jeb Hensarling of Texas, have sought to abolish it on grounds that it benefits companies including Boeing and General Electric Co. (GE:US), which they say don’t need government support.
About 89 percent of the Export-Import Bank’s 3,842 deals during the past fiscal year benefited small businesses, according the lender’s annual report on $27.3 billion in financing. Of long-term loan guarantees, 65 percent involved sales of Boeing aircraft, according to a June 3 report by the independent Congressional Research Service.
“Chairman Hensarling is for letting Ex-Im’s authorization expire on schedule,” said Jeff Emerson, a committee spokesman, in an e-mail. “That would allow for an orderly wind down of Ex-Im.”
Other conservatives are skeptical of changing the bank.
“The same people who have been talking about reforms for a while continue to” do so, said Dan Holler, a spokesman for Heritage Action for America. He said the Washington-based limited government group continues to oppose the bank’s renewal in part because it provides unnecessary support for large corporations.
The Manchin-Kirk measure submitted yesterday would require the bank to provide Congress with reports on its business plan, including its efforts to support small-business exports, and it limits the lender’s exposure to loan defaults.
Manchin, from a coal-producing state, plans to introduce an amendment to allow exports of clean-coal technology, the senators said in a statement.
A senator from a state with a large number of Boeing workers, South Carolina Republican Lindsey Graham, said, “I’m 100 percent for reauthorization for five years.”
“I’m for straight-up reauthorization, and I don’t mind reforms as long as they don’t gut the program,” Graham said. “If you could construct a world where nobody had an Ex-Im Bank, count me in. But our competitor nations all have Ex-Im banks.”
Graham said the bank has enough bipartisan support in the Senate for reauthorization, although it’s obvious changes are needed to get the bill though both chambers.
Changes that he might consider acceptable include a boost in the bank’s lending cap, more transparency about the bank’s lending decisions, more oversight authority for its in-house watchdog, and perhaps limits on which industries can and can’t benefit from the bank’s financing.
Aiding prospects in the Senate for a bipartisan bill, the chamber’s top Republican hasn’t ruled out a reauthorization. Senate Minority Leader Mitch McConnell, a Kentucky Republican, is waiting to see what measure emerges and what types of changes it recommends before he commits, said Don Stewart, his spokesman.
“We don’t yet know what form it will come up in,” Stewart said. “It’s premature.”
Delta Air Lines Inc. (DAL:US), which says Export-Import Bank financing has helped competitors undercut the Atlanta-based carrier, is seeking further changes. They include ending the bank’s financing for sales of wide-body Boeing jets to government-backed competitors, such Emirates Airline of Dubai.
Gary Clyde Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington, said favoring small business at the expense of capital-goods producers such as Boeing would hobble the lender.
“If they make it a small-business bank, it’ll go out of business,” he said in a phone interview.
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