Political Battle Over Export Bank Heats Up - New House Leadership, Conservative Groups Seek to Shut It Down

From The Wall Street Journal:

Lawmakers at a recent House hearing on the future of the Export-Import Bank were given an extra piece of reading material: a personalized index card laying out exactly which companies in their districts benefit from the financing agency and how many people they employ.

The cards, which supporters of the bank plan to give to every member of Congress in coming weeks, are part of a lobbying push by corporations such as Boeing Co. and General Electric Co., and business groups such as the U.S. Chamber of Commerce and National Association of Manufacturers. Their goal is to combat the most serious threat yet to the survival of the agency, which is under assault by new House leadership and conservative groups that say it amounts to corporate welfare.

The Export-Import Bank borrows money from the Treasury and uses it to help American companies sell abroad by offering low-cost loans to foreign buyers or guarantees against potential losses made by exporters.

In fiscal 2013, the bank authorized $27 billion to support an estimated $37.4 billion in U.S. export sales, including aircraft, power-generation equipment and oil and gas projects. That year it sent $1.06 billion to the Treasury, money it earned from interest and fees.

Supporters, including the Obama administration, say the agency allows U.S. companies to better compete with foreign rivals, many of which receive government assistance such as below-market-rate financing.

Opponents say the bank inappropriately disrupts the free market. They say it mostly benefits the richest and most politically connected companies, turning the fight over the agency into a proxy for a larger struggle over government's role in helping U.S. businesses.

With the 80-year-old agency's charter expiring Sept. 30, the battle over its future has intensified. Its backers are redoubling their efforts, which include showing members of Congress how the agency benefits their districts.

"There's a full inside-the-Beltway, outside-the-Beltway push," said Christopher Wenk, senior director of international policy at the U.S. Chamber. "We're burning up shoe leather."

The business groups have brought in big names such as former House Majority Leader Dick Gephardt, a Democrat, and former Mississippi Gov. Haley Barbour, a Republican, to promote the bank's worth. Hamilton Place Strategies, hired to lobby on the issue for the manufacturers, has created a "war room" to provide rapid response to counter critics via email and social media.

The opposition is coming from some influential critics, including Rep. Jeb Hensarling, (R., Texas), chairman of the House Financial Services Committee, which has jurisdiction over the bank, and the incoming House majority leader, Kevin McCarthy (R., Calif.), who recently declared his opposition to the reauthorization—a reversal from his 2012 vote backing the bank the last time it was reauthorized.

Two conservative groups, Heritage Action for America and Club for Growth, are expected to make reauthorizing the agency a "key vote" the groups will use in their annual ratings of lawmakers, as they did in 2012.

Groups such as Generation Opportunity, a conservative organization aimed at younger voters, have targeted the bank on social media, including a recent cartoon video titled "The Kronies: Laughing All the Way To The Export-Import Bank" that received more than 200,000 views in three weeks on YouTube.

The groups are sending the message that opposition to the bank is important to core conservative voters, Heritage Action spokesman Dan Holler said.

"Our conservative activists feel we're three months away from a huge win…The idea that could be snatched away, that won't sit well with the base," Mr. Holler said.

A similar effort to oppose the bank's reauthorization fell short in 2012, but opponents are more hopeful this time around. The primary defeat last month of Majority Leader Eric Cantor (R., Va.), who was a big proponent of the bank, and the growing sway of tea party and other conservative groups within the House GOP conference has bolstered opposition to the bank.

Those backing the bank's reauthorization said they are scheduling factory tours and one-on-one meetings between business owners who benefit from the bank and their elected representatives, particularly when lawmakers return home for their annual August recess.

Ned Monroe, senior vice president of external relations at the National Association of Manufacturers, said it has a tailored plan for every congressional district to promote the agency. Business owners also will be brought in for "fly-ins" to go office-to-office on Capitol Hill to make their case.

Tony Fratto, a partner at Hamilton Place and a veteran of the White House and Treasury Department under President George W. Bush, said a "startling" number of lawmakers don't realize that businesses in their district use the bank.

Sen. Maria Cantwell (D., Wash.), who backs the bank's renewal, said Mr. McCarthy's opposition set off a "Richter-scale explosion" among bank supporters, highlighting the need to alert businesses that might not otherwise be focused on the issue.

"They're busy shipping product, especially if they're small…they're not trying to figure out what's going on politically," Ms. Cantwell said. "We're trying to make sure they know so they can respond."

Some businesses are also encouraging their workers to get involved.

In a recent memo to employees, GE Power & Water Chief Executive Steve Bolze laid out the case for reauthorizing the bank and asked workers to consider visiting a website to generate a letter to their representatives in Congress. Any communication by employees of the GE division is voluntary, Mr. Bolze wrote in the memo, but "collectively, our efforts can make a real difference."

Asked about the memo, a GE spokesman said the bank plays an "important role" in allowing the company to compete internationally. Reauthorization of the bank will have a direct impact on GE and its employees, the spokesman, Shaun Wiggins, said.

The lobbying is expected to intensify in coming weeks. The bank could soon face a key test in the Senate, where Democrats including Sen. Charles Schumer of New York are pushing for a vote before the August recess.