Republican Party Divided Over Export-Import Bank Amidst Lingering Uncertainty

Strategic Insights -

As the reauthorization of the Export-Import Bank comes up for a vote, the Republican Party is deeply divided over its role in the economy. Senator Lindsey Graham, a South Carolina Republican and presidential candidate, supports the bank, citing its importance to the state's economy and the jobs it supports. However, his colleague, Representative Mick Mulvaney, opposes the bank, arguing that it is an example of corporate welfare and that taxpayers should not be liable for potential bailouts.

Key Takeaways:

  • Senator Lindsey Graham has taken a lead in Congress to reauthorize the 81-year-old Export-Import Bank, created during the Depression as a lender of last resort for American exporters and their foreign customers.
  • Opponents, including Representative Mick Mulvaney, argue that the bank is an example of corporate welfare and that taxpayers should not be liable for potential bailouts.
  • The bank supports jobs in South Carolina, particularly in the state's largest employers, Boeing and General Electric.
  • Nearly all Republican leaders of Congress and its relevant committees are opposed to reauthorizing the bank, including former supporters like Mitch McConnell and Richard C. Shelby.
  • The House's banking committee chairman, Representative Jeb Hensarling, has called the debate a defining one for Republicans, questioning whether the party stands for free enterprise interests or business interests.
  • The Democratic frontrunner, Hillary Rodham Clinton, has stated her support for the bank, saying she would like to "put the Ex-Im Bank on steroids."
  • The American bank has returned $6.9 billion to taxpayers over the last 20 years from fees, premiums, and interest.

Statistics:

  • 90% of the bank's clients are small businesses.
  • 7 out of 10 airplanes sold by Boeing are sold with Ex-Im Bank help.
  • The Ex-Im Bank has emitted $6.9 billion to taxpayers over the past 20 years through fees, premiums, and interest.
  • The bank provides financing to over 90% of its products, including Turkey, Bangladesh, India, and Ethiopia.

Sources:

  • [1] By Jackie Calmes, Greenville, S.C. – South Carolinians know something about civil wars, but the latest one within the Republican Party over the federal Export-Import Bank has a couple of the state's Republican brothers in Congress battling each other (New York Times, [date of publishing not specified])
  • [2] Id.
  • [3] Id.