May 9 (Bloomberg) -- The U.S. House passed legislation to increase the Export-Import Bank’s lending authority 40 percent by 2014, boosting President Barack Obama’s efforts to create manufacturing jobs by doubling exports in the next two years.
The measure, passed on a 330-93 vote, will go to the Democratic-controlled Senate, where Majority Leader Harry Reid said he plans to seek quick action on the measure. The legislation was supported by 183 Democrats and 147 Republicans. Republicans cast all 93 votes against the measure.
Without action by Congress, the Export-Import Bank will reach its $100 billion lending cap by month’s end. The measure, H.R. 2072, would raise the lending limit to $120 billion this year, to $130 billion in 2013 and to $140 billion by the end of the 2014 fiscal year.
Voicing concerns of many fellow Republicans, Majority Leader Eric Cantor said he was “no fan of government subsidies” because “export subsidies distort the free market and global trade.” The Virginia lawmaker said that “in a perfect world, the Export-Import Bank” and its overseas counterparts “would not exist.”
Still, Cantor said closing the Export-Import Bank “amounts to unilateral disarmament” that would hurt U.S. businesses and workers.
Some Republicans call the Export-Import Bank a form of corporate welfare that distorts the market by giving loan subsidies to customers of exporters such as Boeing Co., based in Chicago.
California Republican Tom McClintock, the sole speaker against the bill during floor debate, said the bank “dragoons American taxpayers into subsidizing loans to foreign companies by making it cheaper for them to buy products from politically favored American companies.”
Since 2007 almost half of the bank’s loan guarantees helped “that plucky little upstart called Boeing,” McClintock said. “Legitimate companies have plenty of access to private capital. They don’t need these subsidies, and the illegitimate ones should not be propped up with the hard-earned dollars of working, taxpaying Americans.”
Two groups that support smaller government and lower taxes, Heritage Action and the Club for Growth, urged lawmakers to oppose the measure and said their vote on the issue would affect their legislative rating.
Delta Air Lines Inc., which has sued the Export-Import Bank over its lending practices, won a concession in the measure requiring the Treasury secretary to start negotiations with other governments to end aircraft export subsidies.
The company called the measure “a good first step toward much-needed reforms” of the bank, according to an e-mailed statement.
“We look forward to working with Congress and the Administration on continued Ex-Im reforms that further reduce -- and, ultimately, eliminate -- the unintended harmful consequences of its presence in the market,” Trebor Banstetter, a Delta spokesman, said in the statement.
Delta, based in Atlanta, says non-U.S. carriers have received favorable credit terms to purchase wide-bodied jets from Boeing, thereby putting Delta at a competitive disadvantage.
Manufacturers such as Boeing support the measure along with the U.S. Chamber of Commerce and the National Association of Manufacturers.
Washington Democrat Norm Dicks, long a supporter of Boeing, said not renewing the bank’s lending authority would be “an absolute disaster for the economy.”
Quoting from the bank’s annual report, Dicks said it financed $32.7 billion worth of exports in 2011, supporting 288,000 U.S. jobs.
The compromise bill, negotiated by Cantor and second-ranking House Democrat Steny Hoyer of Maryland, also would bar the bank from making loans that would rank behind those of other creditors in a bankruptcy filing. That stems from a $10.3 million loan guarantee to the failed solar-panel maker Solyndra LLC.
In a statement, Fred Hochberg, the bank’s chairman, said the legislation “provides much-needed certainty and predictability to U.S. exporters and their workers.”
The legislation will help advance “a key component” of Obama’s initiative “aimed at doubling exports,” Hochberg said. U.S. exports reached a record $2.1 trillion last year, a 34 percent increase from 2009, Hochberg said.
New York Senator Charles Schumer, the third-ranking Democrat, predicted yesterday there would be “broad support” in the Senate.
A group of 25 Republican senators, led by South Carolina Senator Lindsey Graham, also have voiced support for reauthorizing the bank in a March 26 letter.
Still, Jim DeMint, South Carolina’s other Republican senator, said in an interview that he will demand floor debate on the measure and may offer an amendment to phase out the bank.
“There needs to be a phase-out or a sunset, and there needs to be some real reforms,” DeMint said in an interview. He said he was disappointed the House measure doesn’t require an analysis of the bank’s effect on U.S. jobs.
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