Should U.S. Export-Import Bank Survive?

Incoming House majority leader Kevin McCarthy supports letting the bank's lending authority expire.

Representative Kevin McCarthy, the incoming House majority leader, gave momentum to conservatives hoping to eliminate the U.S. Export-Import Bank by saying he supports allowing its authority and charter to expire.

McCarthy said in an interview yesterday that the private sector can fill the void of the 80-year-old agency. Its lending authority is set to expire on Sept. 30. In 2012, McCarthy voted in favor of the bank’s reauthorization.

“One of the problems with government is it’s going to take hard-earned money so others do things that the private sector can do,” McCarthy, a Republican from California, said on the Fox News Sunday program. “That’s what Ex-Im Bank does.”

The biggest beneficiaries of the bank, which backed $38 billion in exports last year, are major manufacturers including Boeing Co., General Electric Co., and Caterpillar Inc. Atlanta-based Delta Air Lines Inc. opposes reauthorization of the bank and says taxpayers shouldn’t make it easier for foreign competitors to buy jets.

“Ex-Im Bank is one that government does not have to be involved in,” McCarthy said. “The private sector can do it.”

Republicans have clashed over reauthorizing the lending authority of the bank. House Financial Services Chairman Jeb Hensarling has called the institution “the face of cronyism” and said it should be abolished. The panel, which has jurisdiction over the bank, holds a hearing on its reauthorization on June 25.

 

Bipartisan Support

Democratic Whip Steny Hoyer has said that Hensarling’s opposition to renewing Ex-Im Bank shouldn’t prevent the majority of Republicans and Democrats who support the bank from acting to extend its charter and lending authority.

Shares of Boeing fell 2.3 percent—the most in two months—the day after House Majority Leader Eric Cantor lost his primary election earlier this month and resigned his No. 2 spot, effective July 31. Cantor had been an Ex-Im champion, having helped broker a deal to reauthorize the bank in 2012.

The U.S. Chamber of Commerce and National Association of Manufacturers are supporters of the export credit agency. National Association of Manufacturers President Jay Timmons said on June 17 that Hensarling is “just completely wrong” on opposing the bank’s renewal.

President Barack Obama has proposed a five-year renewal and a gradual increase in its lending cap, to $160 billion, from the current $140 billion.

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