(CNSNews.com) – The Senate voted 64-29 on Monday to renew the Export-Import Bank, the federal agency that provides loans to foreign companies buying American products. However, the embattled bank faces a more treacherous road ahead in the House, where the chamber is set to recess on Friday without taking up the issue.
The Bank’s charter, which was originally created as part of New Deal legislation to “create jobs” in 1934, expired on June 30. The Senate amendment reauthorizing the Bank came as an amendment to an unrelated, must-pass federal highway funding bill.
The legislation will proceed to the House next, where Republicans are divided and the majority leader has said it will be dead on arrival. “My best advice to the Senate is to get our highway bill moving forward,” House Majority Leader Kevin McCarthy (R-Calif.) told reporters earlier this week, indicating that he wanted a highway bill without the Ex-Im reauthorization attached.
In the meantime, the bank’s charter will remain expired at least through August, and it remains to be seen whether it will be revived in September.
Conservative organizations – including the Heritage Foundation, FreedomWorks, and the Club for Growth – have lined up to support House leaders who intend to prevent a revival. They contend that rather than creating jobs, the bank benefits large corporations at the expense of smaller businesses.
“When government picks winners and losers, it doesn’t talk about the losers,” said Doug Sachtleben, communications director for the Club for Growth.
The bank, Sachtleben told CNSNews.com, “gives a small handful of big companies an advantage that nearly all the rest of U.S. exporters don’t receive, which begs the question of how many thousands of jobs are actually lost by firms that are forced to compete against the government.”
The bank’s opponents often point to the fact that most of its long-term guarantees go to support corporations – and aerospace manufacturer Boeing in particular. In 2014, 68.3 percent of the Bank’s long-term guarantees – $7.4 of $10.8 billion – went to support purchases that foreign companies made from Boeing for products such as commercial aircraft. That has led some to derisively refer to Ex-Im as “Boeing’s Bank.”
Those loan guarantees have led to generous support for the bank from the corporate community, which spends unsparingly to influence lawmakers. Boeing spent $9.3 million on lobbying efforts in Washington between April 1 and June 30 of this year, according to reports released earlier this month. The U.S. Chamber of Commerce spent nearly twice as much, at $17.9 million.
The Chamber contends that the bank supports 164,000 jobs. It also contends that a majority of the bank's loan authorizations go to small business – 3,300 out of 3,700 in 2014. (The Chamber is silent about the fact that the 400 authorizations that did not go to small business represent the bulk of the Bank’s allocations.)
Sachtleben and other opponents have said the bank’s expiration has proven it doesn’t do as much as its proponents claim to support jobs. “We are seeing what we’ve known all along, the job claims were a myth, and those large companies are either self-financing or getting their financing from the private sector,” Sachtleben said.
However, the Chamber of Commerce warns that the impact is coming. “Advance planning has so far blunted the negative impact of Ex-Im’s shutdown,” said Bruce Josten, the Chamber’s executive vicepresident for government affairs.
“If Ex-Im isn’t reauthorized soon,” Josten told CNSNews.com, “American workers and companies will pay the price in lost sales and lost jobs.” He also reiterated the Chamber’s position that the bank has a positive effect on smaller employers, saying, “America’s small and medium-sized companies will pay a particularly high price for the failure to reauthorize Ex-Im.”
However, it could be some time before the bank begins to wind down its activities. “There’s still a $107 billion loan portfolio out there that has to be managed,” bank President Fred Hochberg told the Associated Press, enough to keep the bank operating normally for up to a year.
According to Josten, the bank’s renewal will be a top priority for the Chamber and its members when the House reconvenes on September. ‘“Congress will face a formidable ‘to do’ list when it returns in September, and the business community will work to ensure Ex-Im is on that list.”