President of the U.S. Export-Import Bank Fred Hochberg speaks during an interview with Reuters in Nigeria’s capital Abuja October 19, 2011.
Credit: Reuters/Afolabi Sotunde
WASHINGTON |
WASHINGTON (Reuters) – A conservative free-market political group on Tuesday stepped up its effort to shut down the Export-Import Bank, less than a year after Congress voted to renew the bank’s charter.
The Club for Growth urged Senate Republican Leader Mitch McConnell to block the nomination of Fred Hochberg to lead the bank for another four years and to block two other nominations that President Barack Obama has not made yet.
The Ex-Im bank provides loans, guarantees and other financing to help manufacturers such as Boeing (BA.N), General Electric (GE.N) and Caterpillar (CAT.N) export their goods.
Club for Growth President Chris Chocola called the bank “a slush fund for market-distorting subsidies that pick winners and losers in the private sector.”
“Senator McConnell should demand a plan to wind down the Export-Import Bank and not enable it to continue to hand out massive amounts of corporate welfare benefiting a few select industries,” Chocola said in a statement.
Club for Growth led an unsuccessful effort last year to shut down the nearly 80-year-old bank when the charter was up for renewal, forcing the Chamber of Commerce and the National Association of Manufacturers to rally to the bank’s defense.
Congress kept Ex-Im on a short lease by only renewing the charter through September 2014 but also voted to gradually raise its lending cap by 40 percent to $ 140 billion.
The terms of Hochberg, who is chairman of the board and president of the bank, and two other of the bank’s five board members expired in January, although the bank’s charter allows them to serve an additional six months.
Barney Keller, a Club for Growth spokesman, said the group’s new strategy is to try to deny the bank an operating quorum by blocking Hochberg and other nominations.
“It’s our understanding if the bank doesn’t have a quorum, it can’t make loans,” Keller said.
McConnell’s office did not immediately respond to a request for comment on Club for Growth’s stance. Last year, he voted against renewing the bank’s charter, giving the group hope he will join them in their effort to cripple the bank.
Business groups plan to send a letter this week urging the Senate to act quickly on Hochberg’s nomination, said Christopher Wenk, senior director for international policy at theChamber of Commerce.
“It’s unfortunate that people are coming out swinging on this right now because we just went through this battle last year,” Wenk said. “Ex-Im obviously plays a vital role for exporters. Not just big companies, but medium- and small-sized companies in particular depend on Ex-Im financing.”
Daniel Reilly, Ex-Im’s senior vice president for communications, said shutting down the bank “would amount to unilateral disarmament” because foreign export credit agencies will not stop their support their companies.
“The Export Import Bank is a self-sustaining agency that supported over 255,000 American jobs last year, while delivering $ 1.1 billion to the Treasury. Eighty-eight percent of all transactions last year benefited small businesses,” he said.
The Senate Banking Committee has not yet announced a date for a hearing on Hochberg’s nomination.
(Reporting by Doug Palmer; Editing by Cynthia Osterman)
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Group steps up effort to shut down Export-Import bank
