Ex-Im Bank in limbo awaiting political power shift
President-elect Donald Trump will step into a congressional civil war over the fate of the Export-Import Bank next year, caught between Democrats and Republican centrists who say the headstrong mogul can use the government-chartered lender to put “America first” and conservatives who say it is time for the agency to fade into oblivion.
A product of the New Deal, the obscure credit agency known as “Ex-Im” primarily provides financing for U.S. companies looking to sell their goods overseas when private funding is not available. Yet the bank has been unable to extend any significant new loans for the past year because a powerful Senate Republican blocked President Obama’s nominees to the agency’s board, denying it the quorum needed to make big decisions.
In the interim, Ex-Im has hobbled along, waiting for a final decision on its fate.
Democrats and centrist Republicans in Congress hope to revive the bank. They say the
agency still serves a vital need and point to Mr. Trump’s intervention in a deal last month to save hundreds of manufacturing jobs at a Carrier air conditioning plant in Indiana.
“Trump made a big deal about 800 or 900 jobs. That’s good. Good for him. Well, I just want to let the president-elect know that we’re losing thousands of jobs,” said Sen. Lindsey Graham, South Carolina Republican and vocal champion of the bank.
“Not because the American worker is not working hard, but because American manufacturers can’t compete in the developing world because our competitors all have ex-im banks,” he said.
Capitol Hill conservatives — joined by some liberals such as Sen. Bernard Sanders, Vermont independent — have blasted the bank as “corporate welfare,” a prime example of the government trying to pick winners and losers in the free market. The Ex-Im Bank should be left to limp along and offload its obligations by 2019, when its current charter will expire.
“We would like to see the status quo upheld,” said Andy Koenig, vice president of policy at Freedom Partners, a nonprofit that is partially funded by the conservative Koch brothers and opposes the bank.
As it stands, the bank is severely hamstrung by its deficient board. Without a quorum, it cannot approve loans of $10 million or more.
It still managed to authorize $5 billion in loans to support $8 billion in export sales in the latest fiscal year, yet deals valued at more than $30 billion are awaiting approval from a full board.
The bank survived a near-death experience in 2015 when its charter was set to expire and the liberal-centrist coalition managed to renew it.
But the November elections left two of the bank’s opponents — House Speaker Paul D. Ryan, Wisconsin Republican, and Senate Majority Leader Mitch McConnell, Kentucky Republican — in charge of Congress, and Mr. Trump dismissed the bank on the campaign trail as “featherbedding” for politicians and huge companies that don’t need the help.
“He essentially said that he was against it,” Mr. Koenig said. “We’re hopeful that maybe he stands by that position and either does not nominate folks, or nominates folks who are inclined to reform [the bank].”
Those nominees would go through the Senate Committee on Banking, Housing and Urban Affairs. Committee Chairman Richard C. Shelby, Alabama Republican, refused this year to take up Mr. Obama’s board nominees, J. Mark McWatters and Claudia Slacik.
Mr. Shelby was cheered and jeered for his oneman blockade. Ex-Im supporters said he flouted Congress’ will, and conservatives said he stood by his principles.
Sen. Mike Crapo, Idaho Republican, is poised to take over the gavel of the banking committee in the coming Congress, though he is not signaling how he would proceed on Ex-Im nominees if Mr. Trump produces them.
“While it is anticipated that Sen. Crapo may chair the banking committee in the new Congress, he is not discussing potential agenda items until the new Congress convenes in January,” Crapo spokesman Robert Sumner said.
The bank says that as an independent federal agency, it operates with the full faith and credit of the U.S. government and can remain a viable entity. It would not be able to take on new business beyond Sept. 30, 2019, if Congress declines to renew its charter.
Ex-Im’s supporters are spoiling for a fight, saying the bank’s weakened position is costing the country jobs and hurting small companies that act as suppliers for larger beneficiaries.
“We’re going to be successful,” Mr. Graham said. “I don’t know how long it will take us — I hope Trump will help us — but we’re going to be successful.”