After nearly being given up for dead last summer, the Export-Import Bank of the United States has come back to life thanks to a rider in the Fixing America’s Surface Transportation Act, also known as the highway bill.
The EXIM Bank’s charter expired in June. Members of the House Freedom Caucus, which is primarily made up of Tea Party Republicans, helped bottle up language reauthorizing the bank and cited it as evidence of their efforts to shrink the federal government.
Business organizations, such as the U.S. Chamber of Commerce and the National Association of Manufacturers, meanwhile, went to bat for the 81-year-old bank and began working with Republicans such as Rep. Stephen Fincher, R-Tenn., to reopen the bank and obtain a long-term reauthorization of its charter.
“I’m pleased to report that after overwhelmingly bipartisan votes in both the Senate and the House of Representatives, President Obama signed EXIM Bank’s reauthorization into law today,” said Fred P. Hochberg, chairman and president of the bank in a letter to customers dated Friday, Sept. 4.
“Beginning today, EXIM will be able to restart the work needed to meet its mission of supporting American jobs and equipping American businesses with the tools necessary to compete for global sales. Importantly, the Bank secured a long-term reauthorization that will be in effect until Sept. 30, 2019.”
GE job losses
Tea Party congressmen argued the bank was poorly run and, ultimately, not needed. “This is a really, really bad way to run a bank,” said Rep. Mick Mulvaney, R-S.C., who offered five amendments aimed at denying reauthorization of the bank during a vote in October. “And it’s not a bank. It’s a government program, and it should be run by a bank.”
Members of the business community countered that shutting down the bank was hurting export sales, including those of agricultural products, and costing the economy jobs because the EXIM bank makes loans to finance exports that commercial banks often won’t make. Shortly after the bank closed, General Electric announced it was moving 500 jobs from the U.S. to China, France and Hungary, countries that offer export financing.
The EXIM Bank has said it provided $20.5 billion in loans and other assistance to help finance $27.5 billion in U.S. exports in 2014.
The House Freedom Caucus, which continued its efforts to scuttle the bank up until Congress passed the FAST Act, opened the door for Fincher and House Democrats to move the bill to the House floor with a discharge petition.
In most cases with legislation such as the Ex-Im Bank bill that is opposed by the leadership, it stays bottled up under the “Hastert” rule, which says nothing moves forward without the approval of the majority.
After House Speaker John Boehner resigned and Rep. Kevin McCarthy bailed out of the speaker race, non-Freedom Caucus members felt they could sign the discharge petition without fear of retribution since the House was basically leaderless.
Hochberg’s letter said the EXIM was ready to receive applications for new transactions.
“Given the expected volume, the efforts required to get our processes back up and running, and the need to apply our comprehensive due diligence requirements to every transaction, we are asking customers and other EXIM stakeholders to be patient while we resume authorized activities,” he said.
During the subsequent House vote on the reauthorization legislation, supporters defeated 10 amendments that would have effectively kept the bank out of business. Following those votes, the House passed the bill as an amendment to the highway bill, 313-118.
Members of the House-Senate Conference Committee retained the legislation in the Fixing America’s Surface Transportation conference report, which passed the House and Senate on Dec. 2.
For more information about EXIM, visit www.exim.gov.