Obscure Ex-Im Bank becomes target of Bachmann, Republicans

The Export-Import Bank of the United States was once so non-controversial that whenever Congress had to vote to reauthorize the agency for another few years, it would pass unanimously.

Those days are gone. The bank, which backs American exports overseas by offering federal loan guarantees and insurance, is facing new scrutiny from Republicans, including Minnesota Rep. Michele Bachmann, who view it as little more than a subsidy for large, politically connected corporations.

With the bank's current authority set to expire in September, its future is uncertain. At a hearing Wednesday, Bachmann and others on the House Financial Services Committee renewed their effort to kill it.

"Who benefits?" asked committee chairman and Texas Republican Rep. Jeb Hensarling. "Overwhelmingly and indisputably, it's some of the largest, richest and most politically connected firms in the world."

The Ex-Im bank, he charged, is nothing more than another misguided government program.

Ex-Im's chairman shot back, arguing the agency is needed because American companies compete against foreign firms that get similar support from their governments.

"Countries like China and Russia frequently engage in market distorting financing that threatens U.S. workers and their jobs," Fred Hochberg told lawmakers.

That argument didn't sit well with Bachmann.

"To continue that logic means that nations of the world have to continue one-upmanship on subsidy," she said. "So it's subsidy versus subsidy and a complete rejection of the free market, and I don't think that's the direction we want to go."

One thing the bank probably won't do is add to the government's deficit.

The bank charges for its services and returns more than $1 billion to the Treasury every year.

According to the bank's statistics, 171 Minnesota companies have used its various programs since 2007, with exports valued at $2 billion.

The beneficiaries range from CHS, the giant agribusiness cooperative whose customers sometimes use Ex-Im bank financing, to smaller firms such as Turfco, a Blaine-based company that makes equipment for maintaining golf courses.

Turfco used a program that insured its overseas deals, so that if a buyer didn't pay up, the company would still get its money, said George Kinkead, Turfco's president and co-owner. It made it much easier to make deals in countries such as China, he added.

The debate over the Ex-Im Bank has exposed a deep rift within the Republican Party between those who want to support the business community and those who think the government should do less.

Business organizations such as the Chamber of Commerce are frantically lobbying members to save the bank. Conservative groups, such as the Club for Growth, are calling on members to shut its doors.

At the hearing, some Republicans, including Tennessee Rep. Stephen Fincher, worried about the kinds of conversations he'd have with voters if the bank closes: "Well, congressman, the only thing that you've done is you've gotten rid of an investment that was creating 1,000 jobs in our district and now I'm on unemployment and I don't have a job."

Missouri Republican Blaine Luetkemeyer dismissed the idea that the Ex-Im aid was a political handout.

"Crony capitalism is truly when you hand out favors to somebody else as a favor for them having done something for you," he said. "Yet the federal government helps with SBA loans. Is that crony capitalism? It helps with VA loans to help a veteran own a home. Is that crony capitalism?"

Democrats, including Minneapolis Rep. Keith Ellison, have vowed to mount an all out defense of the bank.

"It's just more evidence that these guys are hostile to the government and hostile to the services that it provides to regular people," he said of Ex-Im's opponents.

It seems that if the bank survives, big changes will likely be in store.

Turfco stopped using the Ex-Im Bank last year after it found insurance on the private market.

Kinkead says there's no way the company would have gotten that insurance when it first started exporting, so he's grateful for the bank's help. But he also says that once companies build their export business, maybe they don't need any more help from the government.

"It clearly is a subsidy and I kind of have the opinion that it's one of those things that for a starting operation, it is a big help," he said. "But perhaps at some point it has to taper off."