Export-Import Bank reauthorization passes in Senate

Reauthorization of the Export-Import Bank has become a quite contentious battle, splitting some members of both parties who think that the bank is akin to providing corporate welfare. While the Senate passed Export-Import Bank Reauthorization 64-29 on Monday, it does not appear the legislation will be picked up in the House until after the summer recess.

The Ex-Im provides loans to foreign buyers of U.S. manufactured goods and insurance to U.S. exporters as a means of encouraging trade. Over 87% of this assistance goes to well-known conglomerates such as GE, Caterpillar, and Boeing and is credited with keeping safe some 164,000 jobs tied directly to exporting.

The battle has become so heated as to cause Republican presidential candidate Sen. Ted Cruz to call Senate Majority leader Mitch McConnell a liar, earning himself a Sunday full of rebukes for the rare personal attack. The comments echoed very closely what Cruz said at the CNBC/Institutional Investor Delivering Alpha conference back on July 16 when asked about whether Republican leadership was corrupt or could be trusted to do the things they have been asked to do by their constituents:

So this marks the third time Cruz has officially called out Republican leadership as corrupt, the first time being back in June when he changed his vote on ObamaTrade, citing corrupt back room dealing.

Like ObamaTrade, there is a narrow bipartisan coalition that find their interests aligned:

The modern opposition to EX-IM can be traced back to the Tea Party wave of 2010 and the rise of anti-government conservatism that has gripped Capitol Hill since. Many conservative Republicans see EX-IM as engaging in “crony capitalism,” meaning that the government is picking winners and losers by deciding what companies get loans, are insured, etc.

It also coincides with the rise of strong outside conservative groups such as Heritage Action, Club For Growth, Americans for Prosperity and other organizations backed by the Koch Brothers.

Opponents of EX-IM have attracted some prominent and vocal supporters eager to tap into the Tea Party energy and to not upset the outside conservative groups. Republican presidential candidates Sen. Ted Cruz of Texas and former Florida Gov. Jeb Bush as well as House Majority Leader Kevin McCarthy, R-California, all oppose the bank.

On the left, some like Democratic presidential candidate Vermont Senator Bernie Sanders say that EX-IM subsidizes large corporate interests that turn around and ship jobs overseas. Sanders wants to eliminate EX-IM and send funds to small businesses only.