Reposted from King & Spalding’s Trade & Manufacturing Alert
By Lauren M. Donoghue | October 2014 | T&M Alert
Congress passed a short-term extension of the U.S. Export-Import Bank’s (Ex-Im Bank’s) charter last month, setting up a battle over the Bank’s existence in the 114th Congress. The nine-month renewal plan was placed into a larger “must-pass” continuing resolution bill to fund the federal government, but when renewal comes up again in June 2015 it is likely to move forward as a stand-alone bill.
Congressional Democrats criticized the Republican short-term renewal plan for creating uncertainty in the Bank’s future, saying it threatens U.S. jobs that depend on the bank. House Minority Whip Steny Hoyer (D-MD) claimed that the move was a step toward eventually killing the Bank.
The Ex-Im Bank, which insures exports, underwrites loans for U.S. companies, and lends to foreign companies purchasing U.S. goods, has attracted criticism from conservatives in Congress recently, who argue that the Bank’s role could be filled by private lenders. House Financial Services Committee Chairman Jeb Hensarling (R-TX), perhaps the Bank’s most vocal critic in Congress, refers to it as a form of corporate welfare. Senator Pat Toomey (R-PA), who voted against reauthorization in 2012, said that the chances are “better than they’ve been” that Congress will phase out or not reauthorize the Bank next year.
Opposition to the Bank is not universal among Republicans, however. Some Republicans in Congress, particularly those with large manufacturers in their state, continue to support its existence. In July, a bipartisan group of Senators introduced a bill that would have reauthorized the Bank for five years and provided for a gradual increase in the Bank’s lending limit from $140 billion to $160 billion, a proposal that President Obama supports.
The Ex-Im Bank also enjoys support from a number of powerful business groups. The U.S. Chamber of Commerce, the Business Roundtable, and the National Association of Manufacturers (NAM) have all been pressing for a multi-year extension. In a statement urging congressional support, the U.S. Chamber said that any delay in reauthorization “would hurt U.S. companies of every size and sector, threatening the export sales of thousands of U.S. manufacturers and other companies as well as the security of hundreds of thousands of American jobs that depend directly or indirectly on the Ex-Im Bank’s export financing.” So as the fight over the Bank’s existence continues into next year, renewal of the Bank is sure to be a top priority for the business community.