The Ex-Im Bank battle continues
Conservatives declared victory this summer when the Export-Import Bank closed up shop because Congress refused to renew the government-backed bank’s charter. Those in the free-market movement view this artifact from Roosevelt’s New Deal as an egregious example of corporate welfare, in which the government unfairly picks economic winners and losers.
Yet while conservatives have won the battle, they are far from winning the war, as there is momentum underfoot to bring the bank back.
Created in 1934, the Export-Import Bank is the “official export credit agency of the United States,” offering export credit and insurance to U.S. companies in place of private financing. By guaranteeing taxpayer-backed loans, the bank provides financing well below market value, a prime example of crony capitalism that puts politically connected businesses at an advantage.
A core group of Democrats have supported the reauthorizing the bank, in a bit of a turnabout from the sort of scathing criticism of the agency once made by then-Sen. Barack Obama. But the real struggle over the bank’s future has been a debate within the Republican ranks, where free-market conservatives and Chamber of Commerce-backed Republicans are at odds.
In a dramatic shift away from the bank’s decades-old routine renewal by Congress, conservative scholars Tim Carney of the American Enterprise Institute and Veronique de Rugy of the Mercatus Center led a concerted effort to change the conventional thinking on this issue. Their perspective now permeates throughout the Republican conference in the House and Senate. Republicans like Rep. Justin Amash, R-Mich., and Sen. Mike Lee, R-Utah, took up the charge to end the bank.
Their efforts gained major support from Rep. Jeb Hensarling, R-Texas, who chairs the House Financial Services Committee with jurisdiction over the bank. It also earned support from influential Ways and Means Committee Chairman Paul Ryan, R-Wis., who worked with congressional leadership to let the bank expire. In fact, House leadership itself has taken up the crusade. This summer, presumptive Speaker-to-be Kevin McCarthy, R-Calif., came out saying:
I think Ex-Im Bank is something government does not have to be involved in… The private sector can do it.
So it was that, on July 1, the bank shuttered its doors, unable to take on new business and ordered to wind down already-established transactions.
But Congress ending a wasteful government agency is a rare sight in Washington. Instead of accepting this defeat, the bank’s supporters have turned to gutsy (and rarely successful techniques) to bring the bank back from the dead.
Unable to get a clean reauthorization of Ex-Im through regular order, the bank’s defenders have filed a discharge petition to remove H.R. 3611 – the bank’s reauthorization bill – from Hensarling’s committee and bring it directly to the floor. Unlike most discharge petitions, which are done out of protest by the minority party, this particular effort is being led by a former Export-Import Bank opponent – Rep. Stephen Fincher, R-Tenn. – who is working with Minority Leader Nancy Pelosi, D-Calif., to collect 218 signatures.
If Fincher’s gambit receives both Democratic and enough Republican support, it would be the first discharge petition to reach the requisite number of signers since the McCain-Feingold campaign finance law in 2002. It would also add uncertainty to the stability of Republicans in the House as they prepare for new leadership in the wake of the retirement of Speaker John Boehner, R-Ohio.
For this reason, conservative, libertarian and free-market groups across the nation are joining together to remind Congress that the economy hasn’t collapsed without the bank and that efforts to re-establish the bank outside of regular order are unacceptable. The renewed interested in this esoteric agency should be a chance for policymakers to hit the pause button and think the issue through, instead of ramming through such a rash policy change.
