WASHINGTON – The Export-Import Bank lives.
Until June 30, 2015.
On Thursday, the government-run bank that makes loans and guarantees payments to U.S. exporters officially dodged a bullet fired by Tea Party Republicans. But only for nine months.
The bank’s short-term extension in the continuing budget resolution passed by the House on Wednesday and by the Senate late Thursday afternoon marked a victory for moderate Republicans, Democrats and the business sector. Those groups prevailed over small-government GOP conservatives who billed the bank as “crony capitalism” that unnecessarily subsidizes big corporations.
The Tea Party hoped to kill the bank and flex the political muscle it has shown in other recent budget fights, such as one that led to a brief government shutdown in 2013.
This time, the Republican party’s old guard prevailed by striking a deal with Democrats in the House and Senate. The deal placed a short-term bank reauthorization in the continuing budget resolution to keep the government functioning and fund military training for foreign fighters to battle the terrorist group ISIL.
Members of both chambers were loath to vote against funding the government and battling terrorists.
In Minnesota’s congressional delegation, only Tea Party stalwart Rep. Michele Bachmann voted against the continuing resolution.
Government records show no Minnesota-based companies lobbied directly on the Export-Import Bank. But trade groups, such as the U.S. Chamber of Commerce, the Financial Services Roundtable, the National Association of Manufacturers, and the National Small Business Association, which represent many of Minnesota’s biggest corporate citizens and some of its smallest businesses, backed the bank.
Delta Air Lines, which employs thousands at Minneapolis St. Paul International Airport, did not. It vocally opposed the bank’s reauthorization, saying it unfairly favored some of its competitors.
On Thursday, former Minnesota Gov. Tim Pawlenty, the roundtable’s CEO, issued a statement representative of many of the bank’s supporters.
“We urge lawmakers to continue working toward a longer reauthorization that will bring certainty to businesses and the economy,” Pawlenty said.
At Lion Precision, a 35-employee company that manufactures sensors used in computers and precision machining, news of reauthorization was welcomed.
“I can’t figure out what the problem was,” said Don Martin, president of the St. Paul-based business. “This is a program that is effective and makes money.”
Lion Precision pays the Export-Import Bank to provide insurance that guarantees payments by foreign customers who make up 60 percent of its $5 million in annual sales. Martin said his company is so small that many private insurance companies “won’t even talk to us.”
In 2013, the Export-Import reported that roughly 90 percent of its activity benefited more than 3,000 small U.S. businesses. But roughly three-quarters of the total amount it spends goes to financial assistance for big corporations, such as General Electric and Boeing.
This is why conservative political groups such as Heritage Action and Club for Growth wanted the Export-Import Bank dead. They have vowed to fight on. Both groups pressured Republicans to vote against reauthorization and designated support for the bank a key vote that could lead Tea Party candidate primary challenges of GOP representatives and senators in the 2016 election cycle.
“The percent of exporters in any state that use the bank is less than half a percent,” Heritage Action’s communications director Dan Holler said.
The Export-Import Bank remains an issue in Minnesota’s U.S. Senate race, where Republican challenger Mike McFadden believes the bank should not be reauthorized while incumbent Democrat Al Franken voted for short term reauthorization.
McFadden pointed to a bank deal that favored an Australian business over a Minnesota business as a reason for opposing the bank.
Franken cited 114 small Minnesota businesses that the bank has helped since 2009. Franken also said he will offer an amendment to long-term reauthorization of the bank that will increase its focus on small businesses.