We tend to pay the most attention to government agencies when their funding is about to run out, which is why all eyes are suddenly on the Export-Import Bank. The Ex-Im Bank gives taxpayer funded loans to foreign buyers who want to import American goods. Supporting for the bank has traditionally been bipartisan, but conservative support has waned and a recent scandal isn't endearing it to anyone.
What is the Export-Import Bank?
The Ex-Im Bank is a federal agency that helps finance the export of American made goods by providing insurance, loans and loan guarantees. The loans are made with U.S. taxpayer funds, but that money is returned with interest — last year the Treasury made $1 billion from the bank, which is part of why people, including the White House, support it. If Congress doesn't renew funding for the bank in September, it will dissolve.
Why haven't I heard about this before?
Unless you work at Boeing, or another large company that exports U.S. made goods, it's not an agency most people come into contact with. In the past, it's usually been a little boring, especially politically. As The Washington Examiner's Timothy P. Carney wrote Wednesday, today's House Financial Services Committee hearing on the Ex-Im Bank drew big crowds, but two years ago, hardly anyone attended and the hearing was wrapped up in half an hour after a few unanimous votes. "Why has the Ex-Im become a controversial issue? Mostly, it's the Tea Party's populism," Carney writes.
Why is the Tea Party against Ex-Im?
Conservative Republicans don't want to renew the bank because they think it's a form of crony capitalism that inspires government favoritism towards particular companies, as The Fiscal Times notes. For instance, Delta previously argued that Ex-Im loans allow buyers to purchase Boeing planes at better rates than Delta gets, which hurts business (though, now that the bank is in danger of being phased out, Delta is walking back its criticism according to Reuters). That, or its a form of corporate welfare that puts tax payers at risk.
The bank is also kind of, as the kids say, sketch. Four Ex-Im officials were removed recently for accepting gifts and kickbacks to help certain companies get federal contracts, according to The Wall Street Journal. That's not the reason conservatives want to close it, but the timing doesn't help.
Who's for it?
Other than the businesses that benefit from the loans, Politico reports that House Democrats are trying to pass a bill that would reauthorize the bank for seven years. The U.S. Chamber of Commerce, usually a Republican ally, is also pushing for reauthorization. Both argue that phasing out the bank would make U.S. businesses less competitive against countries (like China) that are increasing their investments in export credits.
Where are things now?
Rep. Eric Cantor is a big supporter of the Ex-Im Bank, but since he lost his re-election primary earlier this month, the opinions of his House Majority Leader successor matter more. Rep. Kevin McCarthy told Fox News on Sunday that he'd let the bank phase out. “One of the problems with government is they go and take hard-earned money so others do things that the private sector can do,” he said. McCarthy voted to reauthorize the bank in 2012, according to Politico. Speaker John Boehner, meanwhile, punted the issue to the House Financial Securities head Rep. Jeb Hensarling, who is against the bank.
This article is from the archive of our partner The Wire.
We want to hear what you think about this article. Submit a letter to the editor or write to firstname.lastname@example.org.