A more telling indicator of Tea Party robustness will be the way in which Republicans in the House cope with the reauthorization of the federally chartered Export-Import Bank, a vestige of the FDR administration that offers loan guarantees to help companies sell their wares overseas. Tea Partiers claim it is a corporate welfare program that should be allowed to expire at the end of September, when its authorization is up. Moderate Republicans propose reauthorizing it for three more years, but shrinking its activities.
THIS BANK FIGHT IS TURNING into a major contretemps along the lines of last year’s government shutdown. Saving the bank is one of the top priorities of the U.S. Chamber of Commerce. Big businesses say that since foreign governments like China and European Union countries support their exporters, disbanding the Ex-Im would be the equivalent of unilateral disarmament.
House Financial Services Committee Chairman Jeb Hensarling of Texas, who once said he was in the Tea Party before there was a Tea Party, believes that the bank fight offers conservatives in the current Congress one last chance to strike a blow for free enterprise. “I believe it is a defining issue for our party and our movement,” he said recently.
The Ex-Im Bank, which has loans and guarantees exceeding $110 billion, serves some very big customers, including Boeing, Ford Motor, and General Electric. The bank says it provides export financing in places where the private sector is unwilling or unable to do so. Congress has ordered set-asides for green-energy companies and loans to sub-Saharan Africa, so nations there can buy U.S goods. The bank was criticized by its own inspector for increasing its assets faster than adding support staff and controls. Hensarling says that if the bank were to fail then taxpayers would be on the hook. But its default rate for 2013 was 0.267% and it raked in $2 billion in fees and interest over the past five years.
Few pay attention to the Ex-Im now. That will change as it becomes the most bruising political cage-fight of the year.