House and Senate Republicans appear divided on whether to keep the Export-Import Bank alive in the wake of House Majority Leader Eric Cantor’s defeat. The emerging battle has pit the conservative wing of the party against the business community, White House and Democrats.
Incoming House Majority Leader Kevin McCarthy (R-CA) changed his longstanding position on Sunday when he came out against reauthorizing the Export-Import Bank once its charter expires on Sept. 30. The trade bank, first established in 1934, assists the sale of U.S. exports with loans, guarantees and other financial products.
House Speaker John Boehner (R-OH) refused to support its reauthorization when asked Tuesday morning. But Senate Minority Leader Mitch McConnell (R-KY) said the issue of whether to reauthorize the Ex-Im Bank should come up for a vote.
“I think we ought to take it up,” McConnell told reporters on Tuesday afternoon. “I haven’t decided what I’m going to do but I do think it’s an issue that’s important enough to be debated and voted on in the Senate.”
That’s an interesting position because Democrats are overwhelmingly supportive of renewing Ex-Im, so they’d need just a handful of Republicans to clear a filibuster. When the issue last came up in 2012, 27 out of 47 Republican senators voted with all Democrats and one independent for the bank, in a deal brokered by Cantor. (McConnell voted against it then.)
Outside conservative advocacy groups including the Club For Growth and Heritage Action have been beating the drum to shut down the trade bank, decrying it as a bastion of corporate welfare and cronyism. Along with McCarthy, incoming House Majority Whip Steve Scalise (R-LA), House Financial Services Chair Jeb Hensarling (R-TX) and House Budget Chair Paul Ryan (R-WI) all want to dissolve the bank. David Brat, the tea party-backed challenger who defeated Cantor, made opposition to corporate welfare a major issue in his campaign.
Senate Majority Leader Harry Reid (D-NV) told reporters Tuesday that the Ex-Im Bank is “so very important” to the U.S. because it’s “something that creates jobs.” He called on Republicans in the business community to “direct attention to House Republicans.”
In a preview of how Democrats intend to attack Republicans on the issue, Sen. Chuck Schumer (D-NY) said in a statement, “The Tea Party is moving the Republican Party so far to the right on important issues like the Export-Import Bank, that the business community is now farther from the Republican Party and closer to Democrats. On issue after issue, from Ex-Im to immigration reform and tax extenders, the Republican leadership in the House is choosing the Tea Party over groups like the Chamber of Commerce that used to be the bedrock of the GOP.”
There are is already speculation in the finance community that Democrats may seek to attach Ex-Im reauthorization to a funding bill to keep the federal government open past Sept. 30, which could potentially lead to a shutdown standoff. Reid declined to say Tuesday if he’d consider using government funding as a vehicle to keep the bank alive.
White House spokesman Josh Earnest quoted President Ronald Reagan expressing support for Ex-Im upon making the case for reauthorization, arguing Monday the trade bank aids U.S. companies that create jobs.
Also on Monday, the Chamber of Commerce, usually a strong ally of the Republican party, urged Congress to take up and pass reauthorization of Ex-Im, insisting that it would help the economy. Chamber President Tom Donohue told reporters on a conference call that the group would make its case to McCarthy and other lawmakers.
Asked if he believes shutting down Ex-Im would harm the economy, Boehner replied, “I don’t know.”