Senate Moves Toward Ending ‘Conundrum’ of Export Credit Agency

Senate Finance Committee member Sen. Pat Toomey (R-Pa.) during a hearing in the Dirksen Senate Office Building on Capitol Hill, on April 10, 2019. Chip Somodevilla/Getty Images

WASHINGTON—The Senate has taken an important step toward confirming President Donald Trump’s nominees for the U.S. Export-Import Bank (Ex-Im Bank), despite efforts of advocacy groups backed by the Koch brothers to end the credit agency.

The Trump administration has been pushing the Senate to revive the federal export credit agency, labeling it “a national security weapon.” However, conservative opponents of the bank call the agency “an example of crony capitalism that puts U.S. taxpayers at risk.”

Last week, Senate Majority Leader Mitch McConnell (R-Ky.) filed to advance the nominations for the Ex-Im Bank, an important first step in resolving the current stalemate.

The Senate held a cloture vote on the nominees on May 7 to proceed to a confirmation vote. Final votes are expected to take place May 8 for the confirmation of Kimberly Reed as president of the bank, and Spencer Bachus and Judith DelZoppo Pryor to serve on the board.

The bank’s board of directors has lacked a quorum for more than three years, preventing the agency from approving loans and guarantees above $10 million. A minimum of three board members is required to have a quorum.

Confirmation of these nominees by the full Senate will allow the bank to finance U.S. exporters’ large projects, such as commercial aircraft and power turbines.

“Obviously, this is a welcome development,” said John Schuster, the former head of Ex-Im’s structured finance division.

The vote “appears to be precipitated by administration concerns about China trade issues,” he added.

U.S. businesses have missed $21 billion in overseas opportunities since the bank lost its quorum in 2015, and exports worth $40 billion are sitting in limbo, according to the administration.

“That’s $40 billion of American exports, unable to reach those new markets and new customers,” Sen. Maria Cantwell (D-Wash.) said May 7 on the Senate floor.

“We must confirm these nominees to ensure that the Export-Import Bank is once again fully operational.”

The federal credit agency has become a political target of the Koch brothers, who are among the Republican Party’s biggest donors. A coalition of 18 advocacy groups led by the Koch-funded nonprofit Americans for Prosperity issued a letter to Congress on May 2, urging lawmakers to oppose the re-authorization of the bank, which is set to expire in September.

“The Ex-Im Bank, as it is informally known, administers corporate welfare loan programs that grant unfair advantages to a few domestic companies at the expense of many others, all the while putting billions of taxpayer dollars at risk and fostering a danger of internal corruption that has too often materialized,” the letter stated.

Over the past several years, the bank has also become a top target for conservative Republicans, who have urged reforms at the bank.

“I’m going to oppose all the nominees today because we’re going ahead and putting the cart before the horse,” Sen. Pat Toomey (R-Pa.) said May 7 on the Senate floor.

“The Ex-Im Bank unreformed is an example of crony capitalism that puts us taxpayers at risk and subsidizes some pretty unsavory characters,” he said.

At the Ex-Im’s annual conference in March, White House trade adviser Peter Navarro criticized lawmakers for creating a “needless conundrum.”

“It’s time for Congress to end its delaying tactics and get on the side of America’s farmers, ranchers, manufacturers, and workers,” he said.