With Bank Teetering, a Bet on the G.O.P. Backfires
Big business groups like the Chamber of Commerce spent millions of dollars in 2010 to elect Republican candidates running for the House. The return on investment has not always met expectations.
Even though money for major road and bridge projects is set to run out this weekend, House Republican leaders have struggled all week to round up the votes from recalcitrant conservatives simply to extend it for 90 or even 60 days. A longer-term transportation bill that contractors and the chamber say is vital to the recovery of the construction industry appears hopelessly stalled over costs.
At the same time, House conservatives are pressing to allow the U.S. Export-Import Bank, which has financed business exports since the Depression, to run out of lending authority within weeks. The bank faces the very real possibility of shutting its doors completely by the end of May, when its legal authorization expires.
And a host of routine business tax breaks — from wind energy subsidies to research and development tax credits — cannot be passed because Republican insistence that they be paid for with spending cuts.
Business groups that worked hard to install a Republican majority in the House equated Republican control with a business-friendly environment. But the majority is first and foremost a conservative political force, and on key issues, its ideology is not always aligned with commercial interests that helped finance election victories.
“Free market is not always the same as pro-business,” said Barney Keller, spokesman for the conservative political action committee Club for Growth.
There could be real-world consequences to the conservative rebellion. The 90-day extension of the highway trust fund that House Republican leaders say they will pass this week in lieu of a broad highway bill would keep existing projects moving for now. But business groups say few new government-funded infrastructure projects can get under way without longer-range certainty about federal backing.
“The majority of the work is supposed to go out in spring and get done by the fall,” said Jeff Shoaf, senior executive director of government affairs at the Associated General Contractors, a group that donated $1 million to candidates in 2010, 80 percent of that to Republicans. “Instead of spending 60 or 70 percent of their budgets, they’re going to cut back to 50 or 40 percent to make sure they have some cash in the fall.”
Exports have been one of the bright spots of the fragile recovery, but without Export-Import Bank financing, companies large and small could find themselves struggling to complete contracts with overseas buyers. Those buyers will likely turn to foreign competitors whose governments have more robust versions of the bank, businesspeople say.
“There’s not a bank in the United States that’s going to loan money to that customer of mine in Argentina to buy my airplane,” said David Ickert, vice president of finance at Air Tractor, which makes crop-dusting and firefighting airplanes in Olney, Tex. “There is not a free-market system that operates like that. It does not exist. We need the Ex-Im Bank, period.”
Like so much else in Congress these days, it is not that simple.