There’s a little known bank run by the federal government that just expired. It supports billions of dollars in economic activity across the commonwealth.
You likely haven’t heard of the Export Import Bank, but it’s been at the center of a fierce debate dividing tea party conservatives and more moderate Republicans. David Brat was swept into office after defeating former House Majority Leader Eric Cantor in the G-O-P primary. Brat likens the bank to the federal lenders Fannie Mae and Freddie Mac, which came running to Congress for a bailout during the economic downturn in 2008.
“So the main issue is the losses when it folds and it will eventually like Fanny and Freddy did. Who’s going to backstop it? And the answer is the taxpayer. So if you have a few year run where you’re solvent, that’s fine. But when it goes insolvent, the taxpayer’s on the hook.”
The bank claims it supports more than one hundred and twenty businesses across the commonwealth that export more than two billion dollars in goods. But Brat says just because other countries prop up their exporters doesn’t mean the U-S should do the same.
“Our trade strategy should deal with that and we’re getting rolled. We are getting rolled by China and Russia and the Middle East. We’re still the world’s lone superpower and all that should be structured as if we’re the superpower and it’s not. It should be more simple.”
Other Republicans disagree. Virginia Congressman Scott Rigell says he doesn’t understand why many in his party have reversed their positions in the past few years and now want to destroy the bank.
“I truly, as a fiscal conservative myself and one committed to reducing the overall size and scope of the Federal Government, I really do not understand the near fixation of many within my own party on its elimination. I’ve examined it carefully and the merits of it far out exceed any of the concerns I’ve heard expressed.”
The bank removed officials last year over allegations they received bribes in order to finance contracts with federal money. Rigell and other supporters still want to see the bank’s charter tweaked.
“Well there’s transparency. There was an officer that would have to be installed to increase transparency, more rigorous accounting requirements. And just the assurance that only the minimum is being done but what needs to be done to keep American companies competitive.”
But Democrats argue the tea party is steering the Republican Party in the wrong direction and hurting U-S businesses in the process. Virginia Democratic Congressman Bobby Scott says the conservative argument against the bank is nonsensical.
“Well you know, it works. It’s good for business. The entire business community is for it because it’s good for business. So I mean you can stick some silly label on it as justification for a no vote. If that’s what they have to do to vote no but it makes no sense. The businesses benefit. The workers benefit. The economy benefits and the Bank makes a profit and sends a check to the Treasury every year.”
And northern Virginia Congressman Gerry Connolly says the G-O-P is playing with fire. “I mean huge amounts of small businesses benefit from Ex-Im and without which, they have no ability to compete or protect themselves in global markets. And in today’s day and age, if you’re in business, it’s very hard for you not to be playing in the international marketplace.”
But Congressman Brat and other Republicans are cheering now that the bank’s charter has lapsed. “So on first blush, it’s hard to explain why it’s bad to the average person. But on second pass, if it’s such a good deal, why isn’t it offered to everybody? Second, if it’s a moneymaker, then privatize it.”
G-O-P leaders are expected to include the reauthorization of the bank in a bill to fund roads and bridges, but even that bills future is in doubt – which has business owners across the commonwealth worried.