This is going to be interesting…
Incoming House Majority Leader Kevin McCarthy on Sunday said he would not support reauthorizing the charter of the Export-Import Bank of the United States once it expires in September, a shift that brings wide political and economic ramifications.
Mr. McCarthy’s comments, made during an appearance on Fox News Sunday, clarified what had previously been a more ambiguous view about the U.S. trade agency, which was created 80 years ago and guarantees loans made to help U.S. companies export their goods, among other things.
Mr. McCarthy’s predecessor as majority leader, Rep. Eric Cantor (R., Va.), helped rescue the Export-Import Bank in 2012 when some conservatives said they wanted the agency to stop backing loans. Mr. Cantor helped steer a reauthorization through Congress despite the objection of some conservatives. Mr. McCarthy of California supported the agency’s reauthorization in 2012, but on Sunday said the agency should no longer be backing new loans.
Asked if he would allow the Export-Import Bank’s charter to expire, Mr. McCarthy replied, “Yes, because it’s something that the private sector can be able to do.”
He added, “One of the biggest problems with government is they go and take hard-earned money so others do things the private sector can do. That’s what the Ex-Im Bank does.”
The comments bolster the position of House Financial Services Committee Chairman Jeb Hensarling (R., Texas), who has called the Export-Import Bank “crony capitalism” and said it should expire. The development, however, could be seen as a blow to a number of U.S. manufacturers, particularly Boeing Co., as the government backs a significant number of its sales to foreign airlines.
The U.S. Chamber of Commerce, the National Association of Manufacturers, and a number of companies were planning this week to launch a public relations effort to gin up support for reauthorizing the Export-Import Bank’s charter, but they will face an uphill battle given Mr. McCarthy’s new position.
“This is an all-hands-on-deck effort right now because we are really at a very critical time given the bank’s charter expires at the end of September,” said Christopher Wenk, senior director of international policy at the U.S. Chamber of Commerce.