Export-Import Bank Reauthorization Update

It is a busy time right now in the Export-Import Bank reauthorization battle. Rep. Maxine Waters (D-CA) introduced a new bill to reauthorize the Export-Import Bank for the next 10 years. It would attempt to improve Ex-Im’s image not by reforming the agency, but by changing its name. Her bill for the proposed Export Finance Agency was marked up in committee on Tuesday, but is unlikely to pass. Ex-Im’s charter is currently set to expire on November 21, when the current Continuing Resolution (CR) ends.

Waters’ bill ran into bipartisan opposition. Republicans such as Rep. Patrick McHenry (R-NC) want Ex-Im reauthorization to be tough on China. He cosponsored a previous version of the bill that contained such language. Its removal in the new version caused him to withdraw his support, and to call the bill “weak sauce.”

Some Democrats such as Rep. Denny Heck (D-WA), worry that the tough-on-China language would limit Boeing’s ability to get Ex-Im financing. China is Ex-Im’s largest foreign beneficiary, and state-owned Air China, a Boeing customer, is Ex-Im’s single largest foreign client. Boeing is one of Heck’s constituents.

Other Democrats, including Rep. Rashida Tlaib (D-MI) and Aryanna Pressly (D-MA), oppose Ex-Im financing being used for fossil fuel projects. Pemex, Mexico’s state-owned oil company, is another major Ex-Im client.

Neither party seems much interested in critiques against Ex-Im’s cronyism, corruption, and ineffectiveness.

What are the likely next steps for Ex-Im? The Waters bill could possibly pass the Democratic House, but not the GOP Senate. A similarly awful Ex-Im bill from Sens. Kyrsten Sinema (D-AZ) and Kevin Cramer (R-ND) similarly lacks traction. Meanwhile, Congress has more pressing matters on its plate. Besides the impeachment investigation taking up much of leadership’s attention, a new CR needs to pass by November 21 to avoid another federal shutdown. Congress is out of session until November 12, making for a tight time frame. Neither the Waters bill nor the Sinema-Cramer bill will likely be able to go through the full legislative process by then.

That means Ex-Im will likely get a short-term extension in the new CR, similar to what happened in September. Though both parties want to reauthorize Ex-Im, they currently disagree too much on the particulars to fold a full reauthorization bill into a must-pass CR. Neither party sees any advantage in a shutdown, so where possible they’ll keep anything controversial out of the CR to keep the process smooth. Simply continuing Ex-Im’s funding as-is for a short time will give Congress some time to hash over details and pass a full reauthorization bill before the new CR expires.

The Sinema-Cramer bill is a reformless disaster. The Waters renaming bill is no better. Both bills would extend Ex-Im for another 10 years, increase its portfolio cap to $175 billion, and end its board quorum requirement for funding projects over $10 million in size. Absent a new, better bill, the best feasible option for Ex-Im reform is to amend whatever legislation that reaches the floor with substantive reforms to limit Ex-Im’s cronyism, internal corruption, and dealings with shady governments. Several ideas are in my recent paper. Moreover, not all of them require Congressional action. There is much Ex-Im can do internally to improve its business model, and there is much the White House can do if it is interested in reform. The best policy, of course, is to close Ex-Im.

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