With the fate of the U.S. Export-Import Bank possibly hanging in the balance, a key House Republican stepped up his attack on the bank, saying it was actually hurting small business and giving undue subsidies to large corporations during an occasionally contentious daylong hearing on Capitol Hill Wednesday.
House Financial Services Committee Chairman Jeb Hensarling’s opening comments included a slide show of American workers as he attacked what he called the “crony capitalism” of the bank, saying that the financing it offers big U.S. exporters hurts domestic competitors.
“Who benefits? Undeniably and indisputably, some of the largest, richest and most politically-connected corporations in the world,” the Texas Republican argued.
The hearing comes as the Ex-Im Bank faces a Sept. 30 deadline to secure congressional authorization to engage in new lending, with the House GOP majority bitterly divided over whether to hold a reauthorization vote this summer. Mr. Hensarling, incoming House Majority Leader Kevin McCarthy and large numbers of conservative members argue it’s time to pull the plug on the bank.
California Rep. Maxine Waters, the ranking Democrat on the committee, criticized the sharpness of Mr. Hensarling’s assessment of the bank and called the Ex-Im a force for creating and sustaining business in America.
“This hearing is not going to be a forthright discussion on the merits of the bank. Mr. Chairman, we know your position,” Ms. Waters said. The majority of those testifying before the panel seemed to lean toward Mr. Hensarling’s view.
Richard Anderson, CEO of Delta Air Lines, asserted that the bank, which is sometimes called “Boeing’s Bank” for the amount of exports it helps the aerospace giant structure deal to foreign carriers, is helping foreign competition get aircraft under more favorable terms and, as a result, endangering Delta jobs.
“This is about putting safeguards in place so [Congress] is not choosing which companies win and which companies loose,” Mr. Anderson said.
But Ex-Im Bank President Fred Hochberg argued the bank filled a crucial role that private lenders would not in helping U.S. firms of all sizes sell in overseas markets, creating jobs at home at no net cost to the Treasury.
“The money is not given away,” Mr. Hochberg said. “It is lent and repaid.”
During many parts of the hearing, TV monitors in the hearing room that usually show the representative or witness who is speaking instead showed a screen that said “The Current United States National Debt” with a debt clock ticking away in red characters below.
Mr. McCarthy’s statement Sunday against reauthorization has jolted the debate over the bank’s future. Outgoing House Majority Leader Eric Cantor, Virginia Republican, helped engineer the 2012 bilateral deal to continue funding the bank, which has major support from business groups such as the National Association of Manufacturers and the U.S. Chamber of Commerce.
In a sign of the divisions within the GOP ranks, Rep. John Campbell, California Republican, said the Ex-Im Bank debate had become unnecessarily politicized and that he was working with a group of fellow Republicans on a compromise measure that would allow the bank to stay in operation while implementing reforms.
“It seems that the debate over this bank has become a proxy for a bunch of other things,” Mr. Campbell said.
Mr. Campbell said his “third option” included a reauthorization of three years, two less than the bank is currently seeking, limits on how much the bank may lend and protections against crowding out the private finance market.
“Certainly I, and I don’t think the members of the working group, think that this is the final answer or the only way, or whatever,” Mr. Campbell said. “But it’s an idea, an idea that I believe we need to have, not only about this subject, but perhaps about other subjects as well.”
The National Association of Manufacturers quickly sent out a statement praising Mr. Campbell’s effort.
“While we still need to review the specific reforms in the draft, we very much appreciate the work by Rep. Campbell and his colleagues and their active interest in moving forward on reauthorizing Ex-Im Bank,” said Linda Dempsey, the organization’s vice president of international affairs.