A potential compromise on the contentious issue of the U.S. Export-Import Bank's future was floated during a House hearing Wednesday.
A potential compromise on the contentious issue of the U.S. Export-Import Bank’s future was floated during a House hearing Wednesday.
Rep. John Campbell, a California Republican, said he has drafted compromise legislation that addresses some of the concerns of conservative Republicans who oppose the bank as a taxpayer-subsidized giveaway to large companies. Their opposition has pitted them against their traditional allies among major corporations who have made the bank’s renewal a top priority.
The Ex-Im Bank provides loans, loan guarantees and credit insurance to overseas buyers of U.S. goods. Its charter expires in September, and without legislation it would be unable to back new loans.
The future of the government agency came under threat last weekend after House Majority Whip Kevin McCarthy said he opposed reauthorizing the bank. Speaker John Boehner, a former supporter, declined to take a position Tuesday.
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The hearing Wednesday began with criticism of the bank by Delta Air Lines CEO Richard Anderson, who argued that Ex-Im has subsidized foreign airlines’ purchases of Boeing aircraft, giving them a competitive advantage.
“The bank uses the full faith and credit of the United States to make those foreign airlines stronger, healthier competitors, to the detriment of U.S. companies and their employees,” Anderson said.
But Anderson also said Delta wouldn’t oppose renewing the bank’s charter as long as several specific reforms were made. In particular, he said, Ex-Im should stop financing purchases of large jets used in international flights by state-owned airlines.
Campbell’s proposed legislation would limit the agency’s ability to provide aid to state-owned companies. It also would lower the bank’s lending cap, responding to concerns that the bank puts too much taxpayer money at risk. And it would reauthorize the bank for just three years, rather than the five requested by Ex-Im.
Several Republicans at the hearing voiced support for a compromise without specifically endorsing Campbell’s proposal. Rep. Stephen Lee Fincher, R-Tenn., said the bank’s financing has supported 1,000 jobs in his district.
“I think we go too far to just say we’re going to end it,” said Rep. Peter King, R-N.Y.
Still, any compromise legislation would face high hurdles in the House. Rep. Jeb Hensarling, R-Texas, the chairman of the Financial Services panel, assailed the bank’s programs at the hearing as “corporate welfare” that benefits “some of the largest, richest, most politically connected corporations in the world.”
The biggest beneficiaries of Ex-Im financing include Boeing, Caterpillar and General Electric.
On the Senate side, Majority Leader Harry Reid, D-Nev., has expressed support for reauthorizing the bank. Minority Leader Mitch McConnell, R-Ky., said the Senate should vote on the issue, though he declined to say whether he would support reauthorization.
Business groups, led by the U.S. Chamber of Commerce, have scrambled to mobilize support for agency. They argue that the bank provides financing only when private-sector banks are unwilling to do so. They also say U.S. competitors in Europe, Japan and other countries benefit from more aggressive export financing by their governments.