Export-Import Bank deal in peril amid Democratic backlash
A bipartisan deal to reauthorize and overhaul the Export-Import Bank is in peril after a House committee was forced to delay action on the measure amid backlash from Democrats.
The House Financial Services Committee was set to vote Wednesday on a bill from Chairwoman Maxine Waters (D-Calif.) and ranking Republican Patrick McHenry (N.C.) to fund and reform the polarizing export subsidizer for five years.
{mosads}That plan changed abruptly Wednesday when Waters was forced to pull the measure from a markup under pressure from her Democratic colleagues to loosen restrictions on lending to Chinese firms.
“We have a consensus that everyone wants to see Ex-Im reauthorized,” Waters said while announcing the delay. “I am not giving up and I am asking Mr. McHenry not to give up”
After years of Republican efforts to shutter or limit the Ex-Im Bank, the deal between Waters and McHenry could represent the best chance to pass a bipartisan revamp of the agency.
Waters expressed hope that the upcoming congressional recess would help lawmakers find a path forward for the bill and address concerns from local businesses.
But with a September deadline to fund the bank looming alongside partisan battles over budget caps and the federal debt limit, lawmakers are facing a dwindling timeline to strike a new deal.
“To call this a missed opportunity would be an understatement. No one said bipartisanship is easy,” McHenry said Wednesday.
“There was an enormous amount of give and take,” he continued. “I gave again, and I gave again, and I gave again. But it wasn’t enough.”
The Ex-Im Bank seeks to support U.S. exporters by extending loans to foreign nations and companies to buy American products. Established in 1934, the bank operated with minimal controversy for decades until conservatives sought to defund it in 2015.
Ex-Im critics say the bank exemplifies crony capitalism by distorting markets and supporting giant corporations such as Boeing, which depends heavily on the bank to support sales to Chinese firms. Supporters of the bank say it’s a crucial tool to defend U.S. manufacturers from unfair trade practices and excessive aid from foreign governments to their own producers.
“Everybody recognizes the significance and the importance of Ex-Im so that we can compete, and now it’s just trying to get everybody on the same page,” said Rep. Gregory Meeks (D-N.Y.), a Financial Services panel member.
Waters and McHenry sought to find a compromise with a bill to reauthorize Ex-Im while adding checks to ensure it would focus on smaller companies, winning praise from some of the bank’s fiercest critics.
“McHenry did a great job — even with us critics and skeptics — of keeping everybody read into what was going on,” said Rep. Bill Huizenga (R-Mich.), a Financial Services panel member concerned about Ex-Im’s support for large companies.
“This is my third or fourth go-around on reauthorization and my frustration has been that oftentimes, the reforms that were touted really weren’t reforms,” he continued. “I do believe that there were some significant reforms that were put in place here.”
While Republicans were receptive to the deal, it crumbled under objections from Democrats over provisions added to limit Ex-Im’s loans to Chinese businesses.
The bill would ban Ex-Im from lending to any company that is more than 25 percent owned by the Chinese government. Ex-Im supporters say that the language would ban almost any loan to firms in China, where the government is deeply intertwined with businesses.
“It would effectively prohibit our major job-creating exporters from doing business with China, even if it wasn’t targeted at a bad actor in China,” said Rep. Denny Heck (D-Wash.), an Ex-Im supporter who represents a district close to Boeing’s headquarters.
“To effectively prohibit us from selling to them is punishing the machinist on the line in Everett, Wash.,” where Boeing makes its jets, Heck continued.
Lawmakers are set to leave Washington, D.C., as soon as Thursday and will spend the next week in their districts before returning to Capitol Hill. Waters and McHenry will then have just three weeks to strike and win support for a new deal before Congress breaks until September.
Financial Services panel members say they’re optimistic that Waters and McHenry can use their strong rapport to write a bipartisan bill that can clear the House.
“The chair, to be blunt about it, is working her ass off to get a bill, and I support her in that effort,” Heck said. “We’ve had some differences about specific content, but I’m not giving up.”
Even so, renegotiating the bill could prompt Republican critics of Ex-Im to seek stronger curbs on its power to support large businesses and lend to certain foreign firms.
“If it becomes a completely rewritten bill that [Waters] almost starts over with,” Huizenga told The Hill, “I’ve got some real amendments with some real reforms that I want people on the record for.”
Waters warned the Financial Services panel earlier Wednesday that without a bipartisan deal, Ex-Im reform would be all but impossible in the Senate, where Majority Leader Mitch McConnell (R-Ky.) has stifled major bills passed in the Democratic House along partisan lines.
“There’s one thing that we both know and understand,” Waters said: The Senate “will not entertain” a partisan bill.