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Export-Import Bank Issue Could Turn Wall Street Into Democrats

NEW YORK (TheStreet) -- Wall Street and Republicanism go together like peanut butter and jelly. It's been that way for over 150 years.

But the re-authorization of the Export-Import Bank, which has helped companies finance export deals since the Franklin D. Roosevelt administration, could push some to consider divorce. 

The bank says it supports 1.2 million jobs through its financing, most of which it says is made on behalf of small businesses that might otherwise be unable to do the deals.

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But some very big companies also use the bank such as Boeing (BA - Get Report), which Standard & Poor's recently warned could have its long-term credit rating downgraded if the bank is closed.  Shares in General Electric (GE) and Caterpillar (CAT) could also be impacted if the charter is not renewed.

Tea Party groups want to stop re-authorization of the bank, which they say replicates the work of the private sector and which Sen. Mike Lee, Republican of Utah, calls "crony capitalism." 

A recent article in an American Enterprise Institute publication by James DeLong offers a good summary. The headline is Why Voters Grew Tired of Cantor. The URL reads government-of-the-cronies-by-the-cronies-for-the-cronies.

Senate Democrats are trying to tie a short-term re-authorization of the bank to their version of a government funding bill, which would force House Republicans to close the government on Sept. 30, a month before the election, if they want to close the bank. 

There are some Democrats who oppose re-authorization, but most seem to see it as an opportunity to renew ties with Wall Street and other business interests. They think a government shutdown could make October very interesting, and I agree.

A who's who of Wall Street editorialists -- from The Wall Street Journal and Financial Times to The New York Times and Bloomberg -- have recently pounded the table for the bank. The U.S. Chamber of Commerce has also issued a call to re-authorize the bank. 

OpenSecrets.org reports that 27 companies and groups have lobbied this year for the bank including Delta Air Lines (DAL), Ford (F), Halliburton (HAL), Honeywell (HON - Get Report) and Raytheon (RTN).

The problem is these groups have no influence over the Tea Party Republicans who oppose the bank, and with new House Majority Leader Kevin McCarthy of California opposing re-authorization, some may face a hard choice.

The question becomes how these business groups will react if Republicans kill the goose they say lays golden eggs. Will they take it or will they open their wallets to Democrats and fight back? If they do decide to fight it may prove the most important political and economic story of 2014.

At the time of publication the author owned shares of BA and GE.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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