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By Steve Trader
In the 80 years that the Export-Import Bank of the United States has existed, Congress has quietly and without debate renewed the bank’s charter 16 times. But that all changed this summer.
It started when former House majority leader Eric Cantor (R-Virginia) lost the primary election in June, and was booted from his position. Cantor had been a supporter of the bank but new majority leader replacement Kevin McCarthy is not, and has been vocal about it.
The bank’s charter renewal was due by September 30, but anti-bank sentiment has become very popular among Tea Party Republicans since McCarthy took office.
Essentially what the bank does is provide insurance for small businesses who are trying to sell goods overseas. There’s a lot of risk involved, and Ex-Im lowers that risk by loaning money to foreign companies, to guarantee payment of US goods.
As the renewal deadline approached, there was serious concern by small business owners that their exports would no longer have that financial support.
Texas representative Jeb Hensarling has been one of the bank’s most outspoken critics.
“It’s a bad idea, always has been,” said Hensarling, during an interview with the media company . “Ex-Im, regrettably, is in many respects the face of cronyism. It’s where government bureaucrats come in and start to allocate credit, and pick winners and losers.”
Bank Chairman Fred Hochberg counters that argument by explaining that 90 percent of the bank’s almost 3,500 clients are small businesses, and that the bank simply levels the playing field with other countries who have similar programs.
“Why we’d want to unilaterally disarm, why we’d want to sort of fight with one hand tied behind our back while other nations doing more to support their exports, more to support their companies, is not really clear to me,” said Hochberg.
Ultimately the bank’s charter was renewed in early September, but only until June 2015, the shortest renewal period in its history. In other words, this debate is very much far from over.