[author: Lauren M. Donoghue]
Congress recessed for a week-long Fourth of July break last week without taking up legislation to reauthorize the Export-Import (Ex-Im) Bank's charter, just days before it was set to expire. The Bank was operating under a nine month short-term extension that passed as part of a continuing resolution to fund the federal government at the end of the 113th Congress and expired on June 30.
The expiration of Ex-Im's charter had been expected for the last few weeks as it became clear that there was no clear pathway for passage of a reauthorization bill in Congress. A representative from the National Association of Manufacturers (NAM) said at a recent industry event that companies have been making contingency plans for locating short-term financing in place of Ex-Im financing starting July 1. With the expiration of the charter, the Ex-Im Bank is unable to approve financing of new deals involving the sale of U.S. products to buyers abroad, although it can continue to service existing loans.
However, the Bank's supporters remain hopeful that Ex-Im's shut down will be brief. Senate Majority Leader Mitch McConnell (R-KY), who does not support the Bank, said last week that he would allow legislation reauthorizing Ex-Im to be offered as an amendment to a transportation-funding bill, which will be debated sometime in July and is expected to be signed into law. "The highway bill will be open for amendment, and it's pretty obvious that that would be a place for this vote to occur," McConnell said in a recent press statement. House Speaker John Boehner (R-OH), an Ex-Im supporter, has said in the past that the House will take up any reauthorization bill that the Senate passes.
The Ex-Im Bank has been helping foreign customers buy exports from the United States by providing loan guarantees and other financial assistance for more than 80 years and for most of that time extension of the Bank's charter by Congress has been uncontroversial. But Ex-Im has become a target of conservative Republicans, led by House Financial Services Committee Chairman Jeb Hensarling (R-TX), who liken it to corporate welfare and believe that the Bank's role could be filled by private lenders. A bipartisan majority in the House and Senate, however, still supports the Bank and the votes are there to pass an extension, if congressional leaders allow it to come up for a vote.
