Supporters of the Export-Import Bank were frustrated this week when a chance to reauthorize its charter fell victim to internecine squabbling on Capitol Hill. But even if Congress had breathed new life into the 80-year old institution, the bank itself would have been paralyzed by its own inaction.
As of last week, only two of the five seats on the Export-Import Bank’s board of directors are occupied. The bank’s charter requires a quorum of three votes to approve any transaction over $10 million.
Filling the other seats requires the cooperation of Senate Banking Committee Chairman Richard Shelby (R-Ala.), who has said the Export-Import Bank “has outlived its usefulness and should be allowed to expire.” He has little incentive to help restore the board’s ability to function.
The tenures of two directors ended on July 20 under a rule that allows them to stay on the panel for up to six months past their term’s expiration, leaving only President Fred P. Hochberg and Vice Chair Wanda Felton. President Barack Obama nominated another director, Patricia M. Loui, to a second term in March, though her nomination has languished before the Senate Banking Committee for months.
The bank’s charter allows a maximum of three directors from one party, spokeswoman Dolline Hatchett said in an email. Bank directors are subject to Senate confirmation, though like Federal Election Commission members, they are usually voted on in pairs of one Democrat and one Republican, said Stephen Myrow, a former chief of staff at the bank. That means Loui is unlikely to get a vote until a Republican candidate is also put forward.
But a Republican nominee might not be on the horizon anytime soon, even if lawmakers promptly resuscitate the bank upon their return to the Capitol in September.
Myrow, who is now the managing partner at Beacon Policy Advisors in Washington, said that traditionally the most senior member of the Senate Banking Committee selects nominees to the board for the party that’s not occupying the White House.
That puts the decision in the hands of Shelby, who could stall Loui’s confirmation process simply by refusing to name a Republican counterpart. In that case, even if lawmakers revive the agency later this year, its board would effectively be hamstrung from financing major projects for the likes of Boeing or Caterpillar, which benefit when overseas corporations borrow to buy American products.
Spokespeople for Shelby and Senate Majority Leader Mitch McConnell (R-Ky.) did not respond to requests for comment.
The more immediate problem for Export-Import Bank advocates is that the agency’s charter expired at the end of June.
Lawmakers who back the bank had hoped to attach a reauthorization measure to a long-term extension of the Highway Trust Fund the Senate has been working on all week. But House Republicans refused to take up the Senate’s 1,000-page version of the bill, opting instead for a shorter, three-month extension.
The Senate is expected to pass its multi-year bill Thursday, with an amendment authored by Sen. Mark Kirk (R-Ill.) to reauthorize the bank. They are also likely to pass the three-month patch, which does not include any mention of the bank.
The temporary patch leaves bank proponents without a plan until at least the end of September, when the next series of must-pass measures — this time legislation to keep the government funded beyond Sept. 30 — come up for a vote.
Still, Myrow thinks that the Export-Import Bank will return later this year.
“I do think it will get re-upped,” he said. “There are multiple must-pass bills coming up once Congress returns from recess.”