WASHINGTON—The Export-Import Bank, caught in a dispute between factions in the Republican Party, is mounting a push to try to prove its worth to the nation’s economy before its charter expires just weeks ahead of this fall’s elections.
The debate over the federal agency, which supports loans to overseas companies to help them buy U.S. exports, splits the party’s business-friendly faction from those who criticize the bank as inappropriate government interference in the market.
Already, the bank’s chairman has embarked on dozens of trips across the nation as the institution faces a battle over reauthorizing its charter. The goal: to promote the bank’s ability to help makers of products ranging from airplanes to bulldozers sell their goods abroad. Meanwhile, the bank sends every governor, senator and House member monthly letters detailing what loans and guarantees have been made that aid their district.
Two years ago, the bank faced intense opposition from conservative lawmakers after decades of bipartisan support. It secured reauthorization only after months of wrangling and the help of the leadership of the GOP-led House.
This time around, the House committee that will consider the legislation is headed by one of those conservatives, Rep. Jeb Hensarling (R., Texas). He voted against reauthorizing the bank in 2012 and said in June that “many taxpayers feel that it is indeed time to exit the Ex-Im.”
For the GOP, the issue is likely to be an unwelcome reminder of lingering divisions within the party.
In hopes of avoiding such fights, House Republican leaders took pains to avoid issues that divide their ranks, opting this year not to tackle an immigration overhaul and pushed off the next federal debt-ceiling increase until early 2015. But the simmering dispute over the bank signals that Republicans are unlikely to fully elude intraparty warring that could siphon attention away from their election-year messages.
Aware of the coming fight, the bank’s supporters are ramping up their efforts, both behind the scenes and in public, to win support for reauthorizing the institution and setting its lending cap. In 2012, lawmakers raised its lending limit to $140 billion from $100 billion.
In fiscal 2013, the bank authorized $27 billion to support an estimated $37.4 billion in U.S. export sales, and sent $1.057 billion to the U.S. Treasury, money it earned from interest and fees it charged its customers.
The bank’s chairman, Fred Hochberg, has taken more than 40 road trips since 2011 to tout the bank’s role in fostering sales of exports. Last week, he flew to Gulfstream Aerospace Corp.’s Savannah, Ga., headquarters and posed for pictures to promote a $300 million loan guaranteed by the bank late last year to help finance the sale of eight Gulfstream business jets to a company in China.
The bank, which dates to 1934, borrows money from the Treasury Department and pays interest on the funds to the Treasury. It then lends that money out and charges a higher interest rate, plus a fee, that generate its revenue. It technically has been self-sustaining since fiscal 2008, though Congress provides funding for the bank’s Office of Inspector General and sets the bank’s lending limit.
“I’m not a dreamy-eyed public policy person who wants to give money away. I like to get paid,” Mr. Hochberg, former president of catalog retailer Lillian Vernon Corp., said in an interview, noting the bank’s contributions have helped reduce the federal deficit.
But the bank’s very success has raised questions among some Republicans, who think much of its work would be better handled by private companies.
“Advocates of it say it never costs anything and so that sometimes begs the question: Do you need the federal backstop there?” said Rep. Scott Garrett (R., N.J.).
Mr. Hochberg said the agency’s role is to fill in gaps where the market has shied away, keeping U.S. companies competitive with foreign businesses that benefit from similar help at home.
Some Republicans are unmoved.
“If other countries want to make bad economic decisions, they’re free to—it’ll benefit the U.S.,” said Rep. Justin Amash (R., Mich.), who has introduced legislation with Sen. Mike Lee (R., Utah) to eliminate the bank over three years.
With an eye on the political calendar, industry groups that back the bank are escalating their efforts. The National Association of Manufacturers and U.S. Chamber of Commerce have been briefing lawmakers on the agency’s impact. Marion Blakey, chief executive of the Aerospace Industries Association, said her group has focused on many of the 93 House Republicans who voted against the 2012 reauthorization.
But Mr. Hensarling, chairman of the House Financial Services Committee, looms large in the debate.
Last June, Mr. Hensarling said the bank’s portfolio exposed taxpayers to too much risk, citing the government bailout of mortgage giants Fannie Mae and Freddie Mac as cautionary examples. Mr. Hensarling said in an interview this week that his position hasn’t changed, but added that he had “an open mind” to proposals from a small group of Republicans on his panel examining the bank.
Some House Republicans have said they might be willing to reauthorize the bank if new constraints are imposed or changes made to increase its accountability to Congress.
Democrats question whether GOP-backed changes to the bank could win their party’s support as well as that of Mr. Hensarling.
“What remains to be seen is whether what he would accept would cripple the Export-Import Bank or set it on a death spiral,” said Rep. Denny Heck (D., Wash.), a member of the financial panel.
Outside groups influential among House Republicans, including Heritage Action for America and Club for Growth, oppose the bank’s reauthorization, and lawmakers also have heard from businesses that have expressed concerns.
At the invitation of Rep. Mick Mulvaney (R., S.C.), representatives of Delta Air Lines Inc. came to speak with about 30 Republicans late last year to give “a real-world example of how the bank harmed them,” the lawmaker said. Boeing Co. is the bank’s top beneficiary and Delta has said the agency’s aid in helping Air India purchase Boeing aircraft has made it harder for Delta to compete with the foreign airline.
“The U.S. Export-Import Bank has no business subsidizing foreign airlines that are perfectly able to finance their aircraft purchases in the private market without government assistance,” Delta spokesman Trebor Banstetter said Thursday.
Reauthorization is likely to be a less controversial issue in the Democratic-controlled Senate, where the Banking Committee’s top Republican, Sen. Mike Crapo of Idaho, said this week he supports extending the bank’s charter. He said the bank “provides significant advantages to American businesses.”
Mr. Crapo added that he talks regularly with Mr. Hensarling. It isn’t clear yet whether the House or Senate will go first on a reauthorization vote.
Write to Kristina Peterson at email@example.com