A bill to raise the Export-Import Bank’s lending cap 40 percent by 2014 will pass the U.S. House today, lawmakers of both parties predict, although Republican leaders aren’t formally urging members to support it.
House Speaker John Boehner endorsed the measure. Still, many Republicans oppose it, saying the bank distorts free markets by subsidizing loans for export sales. The legislation, H.R. 2072, was negotiated by Majority Leader Eric Cantor, a Virginia Republican, and second-ranking Democrat Steny Hoyer of Maryland.
“The Democrats will be overwhelmingly for it,” Hoyer told reporters yesterday. “This a part of trying to create and keep jobs in America. This is an effort to try to grow our exports. This is an issue supported overwhelmingly by the business community.”
The proposal would raise the bank’s lending limit to $120 billion immediately, $130 billion in 2013 and $140 billion by the end of the 2014 fiscal year. The bank will reach its $100 billion lending cap by the end of this month unless Congress acts, bank officials have said.
The vote will be conducted through an expedited procedure requiring a two-thirds majority for passage. Republicans control the House with 292 members to 190 Democrats and three vacant seats. If all members vote, the bill will need 289 votes to pass under the streamlined procedure.
Hoyer told reporters he hasn’t received assurance from Cantor that Republicans will have enough votes for passage. “My presumption is Mr. Cantor made an agreement that he believes he can pass,” Hoyer said.
The Export-Import Bank, created during the 1930s in President Franklin D. Roosevelt’s administration, provides loan guarantees, insurance and loans for foreign purchases of U.S. goods and services.
In an editorial published yesterday, the Wall Street Journal urged Republicans to defeat the measure to show they are “serious about trimming the size of government.” The newspaper said the loan subsidies amount to “job creation, French style.”
After Hoyer and Cantor completed negotiations on May 4, Boehner issued a statement saying that extending the bank’s lending authority is “necessary to promote American exports and remove a threat to the creation of American jobs.”
‘Feeling Pretty Good’
“We’re feeling pretty good about it,” Washington Representative Cathy McMorris Rodgers, vice chairwoman of the House Republican Conference, said in an interview yesterday. Rodgers said House leaders aren’t pressing individual lawmakers on the issue because they are concentrating on budget legislation awaiting House action later this week.
Oklahoma Republican Tom Cole predicted enough members of his party would support the measure. Cole, a member of the House Republican vote-counting team, said party leaders were “confident enough to put it out there” under the fast-track procedure. “One way or another it will pass,” he said in an interview.
The bill is opposed by the Club for Growth and Heritage for Action, groups that favor lower taxes and smaller government. They say the Export-Import Bank provides unfair lending subsidies that distort free-market competition.
Leaders of the Democratic-controlled Senate said they would seek quick action on the legislation after it passes the House.
Senator Jim DeMint, a South Carolina Republican who opposes the bank, said he will insist that the Congressional Budget Office conduct an analysis “of the real cost based on the real risk” of the measure. He said he may push for a vote on an amendment to phase the bank out of existence.
Critics of the bank dispute its leaders’ statement that it had a $3.7 billion profit in the last seven years. DeMint and other opponents say the bank wouldn’t be profitable if market-risk costs were taken into account.
Arizona Republican David Schweikert said he would vote against it because “it’s contrary to my personal finance philosophy.”
The measure would require Treasury Secretary Timothy Geithner to initiate talks with other governments on eliminating export loan subsidies for aircraft.
Delta Air Lines Inc. (DAL), based in Atlanta, has said the bank undercuts U.S. airlines by giving foreign carriers better credit terms to purchase wide-bodied jets.
Kevin Brady, a Texas Republican, said he would vote for the measure because it “hits the balance between ‘don’t unilaterally disarm’ in a way that costs us jobs, but we need to reform the bank.”
“It’s time to tackle the Export-Import Bank,” he said.
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