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 Their focus on the Overseas Private Investment Corp (OPIC) is the
latest phase of a new strategy by conservatives in Congress to pick
off agencies one at a time in their quest to shrink government and
promote free markets.
Like Ex-Im, whose charter expired on June 30 after Republicans
blocked its renewal, the most vulnerable agencies and programs are
those that die unless reauthorized and that can be labeled by
conservatives as offering handouts to politically well connected
corporate interests.
OPIC was created in 1969 during the administration of Richard Nixon
as a "soft power" tool to extend U.S. influence in the developing
world by funneling private sector money to core infrastructure
projects.
Similarly to Ex-Im, it borrows from the U.S. Treasury at low rates
and offers loans and loan guarantees for foreign projects. It also
insures investors against political risks in unstable regions such
as Africa and the Middle East and makes direct investments in
private equity funds in these areas.
Even though it operates on a smaller scale and avoids wealthy
countries, OPIC has drawn similar complaints as Ex-Im - that it
provides "corporate welfare" and is a "slush fund."
 And unless Congress acts, its authority will run out by Sept. 30.
The timing for OPIC's renewal coincides with a much larger fight
over federal funding that could lead to another government shutdown
as the new fiscal year starts on Oct. 1.
"Where do we go next now? My guess is it's OPIC," said Mick
Mulvaney, a conservative Republican from South Carolina who had
opposed efforts to renew Ex-Im's charter.
NEW TARGETS
OPIC may be the first of many new targets for conservatives who
tasted at least temporary success in blocking Ex-Im's renewal. Sugar
subsidies, which they say keep prices artificially high, are high on
many of their lists, as is federal support for ethanol fuel
production.
The Small Business Administration, whose mission is to support small
Main Street firms, is a target for some conservatives. The agency's
main loan guarantee program is expected to run out of funds before
Sept. 30 due to strong demand and some Democrats are seeking more.
"We should be looking at special-interest help and certainly OPIC
isn't outside of that," said Republican Representative Dana
Rohrabacher, an Ex-Im Bank opponent. "It's a subsidy to major
corporations."
OPIC made just under $3 billion in new financing, insurance and
investment commitments last year, compared to $20.5 billion for
Ex-Im.
Ex-Im helps companies sell U.S.-produced goods and services largely
worldwide. It drew the ire of conservatives because of its
government backstop benefits to a handful of prosperous industrial
giants, including Boeing Co, General Electric Co and Caterpillar
Inc..
OPIC targets poor emerging market countries for critical
infrastructure and does not necessarily require U.S. procurement if
the project significantly involves American investors.
Among OPIC approvals this year are a $250 million direct loan for
2,500 cellular towers to be built across Myanmar by a consortium led
by U.S.-based investment firms Texas Pacific Group and Tillman
Global Holdings.
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Ghana-based Amandi Energy Ltd secured a $250 million OPIC loan
guarantee for a 250 megawatt power plant that will use U.S.-made
General Electric gas turbines.
Representative Eliot Engel, the top Democrat on the House Foreign
Affairs Committee, which has jurisdiction over OPIC, is bracing for
an onslaught against the agency.
"Of course I'm concerned," Engel said. "OPIC and Ex-Im have always
been Republican priorities, and now they've done a flip. It's the
private sector supporting U.S. foreign policy with its own funds,
which is everything that conservatives should want."
Republican Ed Royce, who chairs the panel and is a past critic of
OPIC, declined to comment on the agency's future.
Before attacking OPIC, conservative Republicans say they need to
complete their victory over Ex-Im. Democrats and moderate
Republicans aim to attach legislation to revive the trade bank to a
transportation funding bill this month, after many export companies
warned of job losses due to the bank's demise.
All but one of the declared and expected Republican presidential
candidates have said they favor closing Ex-Im, an 81-year-old
institution that Congress once routinely reauthorized by voice vote.
Outside conservative groups that helped elevate the Ex-Im issue to
national prominence, including Club for Growth and Heritage Action,
are already positioning OPIC as a target and drawing parallels to
the trade bank.
"The similarities between OPIC and Ex-Im are chilling. Two
government agencies that focus on artificially propping up U.S.
companies," said Veronique de Rugy, a senior research fellow at
George Mason University's Mercatus research center who frequently
testifies before Congress against Ex-Im and other business subsidy
programs.
Building a coalition against OPIC could be more difficult than
against Ex-Im, however, because of its smaller size and focus on
needy countries.
"It's a cousin to the Ex-Im Bank, but the people who benefit from
OPIC typically do not have the same kind of balance sheets that
would benefit from Ex-Im," said Representative Mark Meadows, a
founding member of the conservative Freedom Caucus, who said he
would vote to renew OPIC.
(Reporting by David Lawder; Editing by Kevin Drawbaugh and Stuart
Grudgings)
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