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A confluence of events, including the defeat of House Majority Leader Eric Cantor, has increased the chance that Congress won't renew the charter of the Export-Import Bank. Private banks receive billions of dollars in U.S. support for loans made to promote American exports.
June 24
The House Financial Services Committee remains divided, largely along party lines, over whether to renew the charter of the Export-Import Bank of the United States.
The Ex-Im Bank has come under fire from fiscal conservatives who describe the agency as a form of corporate welfare. Some, including Rep. Jeb Hensarling, R-Texas, the committee's chairman, have said they plan to let the bank's charter expire on Sept. 30.
The Ex-Im Bank provides loan guarantees and insurance to support U.S. exporters.
Hensarling kicked off Wednesday's hearing by saying the bank funnels U.S. taxpayers' money to prop up foreign governments and that it mainly benefits large, "politically connected corporations" like Boeing and General Electric.
"The taxpayer money goes overseas to China and Russia nations that openly challenge our economic and security interests," Hensarling said in prepared remarks at the hearing's outset.
"If you're a politically connected bank or company that benefits from Ex-Im, no doubt you would like it to continue," Hensarling said.
Rep. Maxine Waters, D-Calif., the committee's ranking member, countered that the bank's policies create thousands of jobs in the U.S., and American overseas trading partners provide similar support to their own companies.
Killing off the Ex-Im Bank would be "like telling American companies you're on your own to go up against competitors who are backed by global superpowers," she said.
Several other committee members also spoke at Wednesday's hearing. While most stuck to party lines, a small number appeared to waver. Rep. Stephen Lee Fincher, R-Tenn., worried that abolishing the Ex-Im Bank would result in job losses.
"I'm going to have a hard time going back to my district and telling them the only thing I've done is kill jobs," Fincher said.
Most of the first portion of Wednesday's hearing focused on whether the Ex-Im Bank is helping foreign airlines.
Delta Air Lines' CEO, Richard Anderson, said he has urged reforms to the Ex-Im Bank because its policies help overseas airlines buy aircraft cheaper from Boeing than Delta can.
Indeed, some of the largest assistance that the Ex-Im Bank provided to private banks in 2012 involved guarantees on loans that JPMorgan Chase (JPM), HSBC and Apple Bank for Savings made to Boeing for exports of aircraft, aircraft parts and satellites.
Anderson had previously called for the Ex-Im Bank to be abolished, but he has since softened his stance, he told lawmakers on Wednesday. He would support keeping it provided widespread reforms were instituted, he says.
Fred Hochberg, the chairman and president of the Ex-Im Bank, disagreed with Anderson that the bank had failed to comply with past reforms required by the committee.
"[House Financial Services] simply asked us to review our procedures," Hochberg said during Wednesday's hearing. "We reviewed them and on top of that we published new regulations. We have complied with every single reform and recommendation that the committee made."
In prepared remarks, Hochberg reinforced the agency's argument that it supports U.S. companies, rather than foreign companies.
"Every industrialized country has its own version of Ex-Im and each is tasked with supporting the domestic exports of their respective nation," Hochberg said in prepared remarks. The mission of Ex-Im Bank is to empower U.S. companies."
