Bloomberg BNA's weekly International Trade Reporter provides rapid, reliable notification of the most significant developments affecting U.S. trade and international business policy and the...
June 23 — Democrats June 23 highlighted the prospect of a growing schism among House Republicans over reauthorization of the Export-Import Bank of the U.S. that appears to pit the new House Majority leader against dozens of members of his own party and pro-business Democrats.
Rep. Kevin McCarthy (R-Calif.), the majority leader-elect of the House, appeared to widen a chasm within the party over the weekend when he said during a television interview that he would be willing to let the authorization for the Ex-Im Bank expire in September. McCarthy's position may make it harder for Democrats and Republicans who support reauthorization to chart a path for renewal through the House.
On Fox News Sunday, McCarthy was asked if he agrees with conservatives who say that the Ex-Im Bank is a form of crony capitalism and should be put out of business.
“The last authorization of the Ex-Im Bank directed the president and the treasury secretary to wind down the Ex-Im bank, negotiate with other countries, to wind them down so we have a level playing field,” McCarthy said. “I think Ex-Im Bank is one that government does not have to be involved in. The private sector can do it.”
McCarthy's new comments now align him with Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, who has stood as a roadblock to reauthorization in recent months. Hensarling told colleagues as recently as June 18 that he won't produce a bill to extend the bank's lending authority past its Sept. 30 expiration date.
But McCarthy's comments also seem to reverse an impression he gave some fellow House Republicans prior to his election as majority leader that he would push Hensarling to move a reauthorization bill through the committee process.
Following McCarthy's comments, 42 House Republicans dispatched a letter June 23 to Speaker John Boehner (R-Ohio) and McCarthy calling for a multi-year reauthorization of the bank's charter.
“In a perfect world this type of financing would not be necessary,” the lawmakers said. “However, failure to reauthorize Ex-Im would amount to unilateral disarmament in the face of other nations' aggressive efforts to help their exporters.”
McCarthy sits on the House Financial Services Committee, which is slated to hold a hearing June 25 titled “Examining Reauthorization of the Export-Import Bank: Corporate Necessity or Corporate Welfare?”
Industry groups, including the National Association of Manufacturers and the U.S. Chamber of Commerce, support renewal of the lender's charter before it expires at the end of September. President Barack Obama has proposed a five-year renewal and a gradual increase in the bank's lending cap, to $160 billion from the current $140 billion.
Business-friendly Democrats quickly rounded up examples of small businesses that benefit from the Ex-Im bank and are located on Main Streets throughout the U.S., including FHC Inc.; Integrated Industrial Systems Inc.; Jason Mills, LLC; Halcyon Manufacturing Inc.; Diamond Power International, Inc.; Estron Chemicals, Inc.; Midwest Ag Enterprises, Inc.; and River Valley Manufacturing, Inc.
“From Burley, Idaho, to South Bend Indiana, Ex-Im helps manufacturers, farmers, equipment suppliers, chemical companies, and other small businesses that produce everything from fences to portable access ramps for Americans with disabilities,” Phil LaRue, communications director of the New Democrat Coalition, a group of pro-business Democrats in the House, said in an e-mail.
The White House June 23 outlined its support for reauthorization and questioned how Republicans could oppose an entity supported by President Ronald Reagan.
The White House reiterated its position that reauthorization of the bank furthers President Obama's domestic policy-making agenda by expanding economic opportunity for the middle class.
“[T]he incoming majority leader is certainly entitled to his own opinion,” White House Press Secretary Josh Earnest told reports at a press briefing June 20. But, Earnest added, the benefits that flow from a reauthorization “are clear.”
“Ex-Im Bank helps American companies create and support jobs here at home at no cost to taxpayers, and it helps us meet our export goals, which is why reauthorization of the [Ex-Im] bank has historically enjoyed bipartisan support in the past,” Earnest said. “Additionally, the [Ex-Im] bank provides American small businesses the certainty and protection they need to enter new markets, grow their businesses, and create jobs here at home.”
Both the White House and Democrats in the House jumped at the chance to highlight friction within the Republican party. The Democratic Leader's Office June 23 released an e-mail highlighting unfavorable media reaction to McCarthy's remarks.
A June 17 document from House Democratic Whip Steny Hoyer (D-Md.) included the renewal of the Ex-Im Bank as one of eight bills on a to-do list for the 113th Congress, adding that “House Republicans have a choice: they can work with us to get things done and start checking off the tasks on Congress' to-do list, or they can ignore the American people and veer even further to the right.”
A copy of the letter from the 42 House Republicans is available online at http://www.scribd.com/doc/230979243/Ex-Im-Letter-for-Signatures.
To contact the reporter on this story: Stephanie Cohen in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Jerome Ashton at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)