Senate Approves Extension of Export-Import Bank
Source: New York Times
The Senate approved legislation on Tuesday to extend the life of the Export-Import Bank by three years, sending to President Obama a measure that had been waylaid for months by small-government conservatives seeking to kill off an agency they denounced as a boondoggle.
The final vote belied the fight between new Tea Party-aligned organizations like the Club for Growth and old-line business groups like the United States Chamber of Commerce, which pressed hard to save the bank. In the end, it was no contest. Senators crushed a series of conservative amendments intended to shrivel or kill off the bank, then passed the measure 78 to 20.
“To those who want to end the bank, I think you’re doing a great disservice to those in this country trying to sell their products overseas,” said Senator Lindsey Graham, Republican of South Carolina. “Do not destroy this bank at a time when competitor nations are doubling the size of theirs.”
The government bank opened in the 1930s to finance the sale of United States products to the Soviet Union, where government banks would not extend credit for the purchase of American goods. Since then, the agency has expanded to underwrite sales large and small when commercial loans to United States customers abroad cannot be secured.
Until this year, reauthorization of the Ex-Im Bank has been routine. But conservative and libertarian groups say its functions amount to corporate welfare, especially when the bank’s biggest customers include major corporations like Boeing and Caterpillar. With Republicans owing their House majority to Tea Party-backed conservatives, opponents saw an opportunity to kill off a branch of government simply by stopping Congress from acting. Club for Growth, a conservative political action committee, made opposition an important vote in its ratings of lawmakers, and Heritage Action, the political arm of the Heritage Foundation, demanded a “no” vote.
Business groups, led by the chamber and the National Association of Manufacturers, mobilized their grass roots and pressed for compromise. Businessmen around the country said exports, a bright spot in the slow recovery, could not survive international competition without a financing backstop. The White House also pushed for a deal.
The Senate’s measure was identical to a deal negotiated by Representative Eric Cantor of Virginia, the House majority leader, and Representative Steny Hoyer of Maryland, the House minority whip. The deal increases the bank’s lending limit to $140 billion over three years, a 40 percent increase from the current $100 billion limit, which the bank has almost reached.
It also mandates a series of government audits and report requirements that critics say is necessary to ensure that the institution is not exposing taxpayers to great risk. It would also require the Treasury secretary to start multilateral negotiations aimed at ending government export subsidies internationally.
That deal passed the House last week, 330 to 93.
But such concessions were not enough for the core of the Tea Party’s support in the Senate. Senator Rand Paul, Republican of Kentucky, tried to prohibit bank loans to any country holding United States government debt, a move that would disqualify practically every country. Senator Mike Lee, Republican of Utah, tried to amend the bill to phase out the bank while a multilateral ban on export financing was negotiated. Senator Pat Toomey, Republican of Pennsylvania, tried to curtail bank lending until the Treasury certified that such negotiations were under way.
“The American people cannot be the world’s financial backstop,” Senator Lee said. “We need to end corporate welfare that distorts the market and feeds crony capitalism.”
None of those amendments received more than 35 votes. The Lee amendment got only a dozen.
Senator Maria Cantwell, Democrat of Washington — whose state, like South Carolina, has major Boeing plants — said the final vote was proof that when broadly popular legislation clashes with Tea Party opposition, the answer is to make lawmakers “step up and choose.”
“We just have to have the votes and call it out,” she said.
But Heritage Action vowed to wear down support for the bank over the next three years.
“Instead of eliminating the Fannie Mae for exporters and seizing the high ground on crony capitalism, they continued the status quo and ignored the message from voters,” a Heritage Action spokesman, Dan Holler, said of Congress.
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