Hensarling Leads Bid to Kill Export-Import Bank
U.S. Rep. Jeb Hensarling, a Dallas Republican, has amassed enough political capital to become chairman of the House Financial Services Committee, and he's using it to try to kill the U.S. Export-Import Bank, the latest Tea Party punching bag.
WASHINGTON – About two years ago, U.S. Rep. Jeb Hensarling — a Dallas Republican and Phil Gramm protégé pegged by some as an ascending GOP star — set his sights on a relatively obscure federal agency that is beloved by national business leaders and is important to Texas' economy.
The Export-Import Bank of the United States should die, Hensarling says. And since becoming chairman of the House Financial Services Committee in 2013, Hensarling has been in a position to try to make that happen. The bank's charter expires June 30, and unless Congress reauthorizes it, the institution created by former President Franklin Roosevelt 81 years ago will be on track for a phase-out.
While few Americans give it much thought, the Export-Import Bank's very existence is the newest proxy in a familiar GOP fight: the Tea Party against the business establishment.
Mainstream Republicans and business groups back the bank, which uses loan guarantees, direct loans, insurance and other support to help U.S. businesses sell their goods overseas. In fiscal year 2014, the bank boasts that it supported $27.4 billion worth of U.S. exports and — since it makes money on interest and fees — paid $674 million into the federal treasury.
About $4 billion in credit insurance and loan guarantees went to Texas companies, including 332 small businesses, the bank says.
Critics dispute that accounting. And to Hensarling and his allies, shutting down the bank isn't just a question of performance — it's a moral issue.
“I just don’t think, ultimately, you can ever deal with the social welfare state unless you first deal with the corporate welfare state,” he said.
Critics call the bank a symptom of “corporate cronyism” that picks economic winners and losers based on political connections. “On a macro-economic level, the bank is of little consequence,” Hensarling said in an interview. “But what is important is what direction we take as a nation.”
Hensarling characterizes the debate as a battle between the politically connected and the average taxpayer, peppering his analysis with terms like “working man,” “common man,” “Main Street” and “corporate welfare.”
Over the last year, a succession of Republican politicians reversed course to join Hensarling in calling for the bank's demise. But not everyone is happy with him. Multiple sources – including Republicans – who work in financial services issues say Hensarling's committee is deeply divided, and some members are furious that he has yet to allow a vote on the bank's future.
Hensarling argued that a vote is moot, because Democrats and Republicans who disagree with him do not agree with one another on a specific plan.
"So far, there is not a majority of the House Financial Services Committee, much less the majority of the House, that is supporting any particular bill dealing with the Export-Import bank," he said.
The fight is particularly applicable to Texas, the nation’s largest exporter and one of the bank’s largest aid recipients. But Texas also harbors some of the bank’s fiercest and most powerful critics.
U.S. Sen. Ted Cruz established his opposition early. Former Gov. Rick Perry, now running for president, once backed the bank but dramatically reversed positions in early May.
The move won him praise from Freedom Partners, an organization within the libertarian-minded Koch brothers political network. The Koch groups promised earlier this year to raise nearly $1 billion in the 2016 presidential campaign cycle.
And then there is U.S. Rep. Bill Flores of Bryan. Flores leads the Republican Study Committee, a powerful voting bloc within the House GOP conference.
In late April, the Club for Growth, a limited government political organization, lobbied Flores on television and in social media to oppose the bank. The club, more than any other group in that world, has a proven ability to raise money for candidates it likes and to take out Republicans in their own primaries.
When it threatens Republicans in conservative districts, incumbents tend to pay attention.
A month after the club's push, Flores announced his opposition to the bank. Soon after, while in Austin in late May, he said, “Ex-Im must die in its current form.”
The bank, however, does have powerful allies trying to keep it alive.
House Democrats are generally in lockstep in supporting the bank, and a reauthorization brought to the Senate floor would likely easily pass and advance to the House side.
Ex-Im also has the support of business interests like the U.S. Chamber of Commerce, Boeing, General Electric and the National Association of Manufacturers.
“Ex-Im does not skew the playing field. It levels it for U.S. exporters facing head-to-head competition with foreign firms,” U.S. Chamber of Commerce Vice President for International Policy John Murphy said in Senate testimony last week. “Ex-Im doesn’t pick winners and losers, but refusing to reauthorize Ex-Im is picking foreign companies as winners and U.S. exporters as losers.”
A small group of House Republicans – none from Texas – held a news conference hosted by the National Association of Manufacturers last week defending the bank.
Bank supporters resent the “corporate cronyism” label, saying bank programs keep a significant number of small businesses afloat. And they argue that the Tea Party, long blocked on larger issues like raising the debt ceiling, is using this obscure bank as an example of political progress.
“Why are we here?” said U.S. Rep. Billy Long, a Missouri Republican, at that news conference. “We have enough problems in this country that we should be dealing with here in Washington, D.C., to come up with this contrived, flavor-of-the-week thing to be against."
"It’s a dreamed-up problem that has spun out of control," he added. "I don’t think we’re in the minority of our party. I think there’s a lot of them are on our side that are afraid to say anything, afraid to come out."
With the deadline approaching, hopes are dimming that the bank will be reauthorized by the end of June. The growing consensus is that if it survives, the reauthorization will be attached to a larger, more comprehensive piece of legislation that members will find difficult to vote against.
Or the Senate could pass a reauthorization that will come to the House floor outside of Hensarling’s committee jurisdiction.
If that happens, Hensarling promises to continue voicing his opposition. But he acknowledges there are limits, even for someone in a position of his power.
“I’ll listen to my colleagues carefully,” Hensarling said. “Even though I’m a chairman, I don’t always get my way.”
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