May 16 (Bloomberg) -- The U.S. Senate voted to reauthorize the Export-Import Bank for three years and increase its lending authority 40 percent by 2014, clearing the measure for President Barack Obama’s signature.
The 78-20 vote yesterday follows passage of the measure by the House last week. The bill, H.R. 2072, would raise the bank’s lending limit to $140 billion. The Export-Import Bank may reach its current limit of $100 billion by May 31 without the reauthorization.
“This bank helps American companies sell their products overseas and hire workers here at home,” Senate Majority Leader Harry Reid, a Nevada Democrat, said on the Senate floor. “Reauthorizing this important legislation is the kind of consensus proposal that shouldn’t result in any kind of a partisan fight.”
The 78-year-old bank provides loan guarantees, insurance and loans to help buyers purchase U.S. exports. Last year it approved a record $32.7 billion in financing, with more than $6 billion supporting small-business exports, according to a bank fact sheet. About $11 billion of the financing benefited large commercial sales of Boeing Co.-manufactured aircraft, it said.
The vote ended a months-long fight for survival for the bank, which became part of a Tea Party-fueled dispute over government aid to business. After a multimillion-dollar lobbying campaign, a May 4 deal averted the expiration of the bank’s charter, set for May 31.
“This important step will help American businesses create jobs here at home and sell their products around the world -- all at no cost to taxpayers,” Obama said in a statement praising Senate passage of the measure.
Voting against the measure were 19 Republicans and Vermont Senator Bernie Sanders, an independent who caucuses with the Democrats.
A May 4 compromise between House Majority Leader Eric Cantor, a Virginia Republican, and Democratic Whip Steny Hoyer of Maryland allowed the House to pass the measure May 9 by a 330-93 vote. It 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.
“A failure to reauthorize the Export-Import Bank would have put American exporters at a steep disadvantage to their international competitors and put at risk nearly 300,000 American jobs,” Senator Tim Johnson, a South Dakota Democrat who is chairman of the Banking, Housing and Urban Affairs Committee, said in a statement. “I’m glad reasonable minds came together to pass this commonsense bipartisan bill that supports so many jobs across the nation.”
The debate over the Export-Import Bank pitted U.S. airlines, small-government groups and Tea Party Republicans against Obama’s administration, the U.S. Chamber of Commerce and Chicago-based Boeing.
Businesses were facing uncertainty about the future of the lender, and the Senate vote “takes a lot of doubt out on the part of exporters and their customers,” Fred P. Hochberg, the Ex-Im Bank’s chairman, said in an interview. The business community that supported reauthorization “made their voices heard on Capitol Hill,” Hochberg said.
Senators yesterday rejected a group of Republican amendments, including a proposal by Tea Party-backed Utah Senator Mike Lee that would have phased the bank out of existence and barred new loans as of June 1, 2013. Under an agreement reached yesterday, each amendment needed 60 votes for adoption.
“We need to end the corporate welfare that distorts the market and supports crony capitalism,” Lee said on the Senate floor. “What’s best for American businesses is getting the federal government out of their way.”
In the House, 93 Republicans -- more than one-third of the party’s members in that chamber -- voted against reauthorizing the bank’s charter.
A group of U.S. carriers led by Atlanta-based Delta Air Lines Inc. sued the bank in November, contending that its financing for non-U.S. competitors, such as Air India Ltd., may harm domestic industries.
Delta spokesman Trebor Banstetter said that the legislation represents a “step toward much-needed reforms.” The company said the measure “requires the bank to hear the views of adversely affected U.S. companies before it acts” and that it “directs the administration to seek an end to the government-backed financing of large-cabin aircraft sales through international negotiations.”
‘Out of Control’
Two groups that support smaller government and lower taxes, Heritage Action and the Club for Growth, have urged lawmakers to oppose the measure.
“The size of government is out of control,” Club for Growth President Chris Chocola said in an interview last month. “Any reauthorization is going to expose the taxpayers” to default.
Heritage Action’s communications director, Dan Holler, said in a telephone interview that Congress’s move to renew the bank’s charter represents “a missed opportunity for Republicans” to eliminate a government entity and make the case that Obama’s policies promote “crony capitalism.”
Washington-based industry groups supporting renewal of the lender’s charter include the U.S. Chamber of Commerce and the National Association of Manufacturers, both of which count U.S. exporters among their members.
The Export-Import Bank “is one of the only tools manufacturers in the United States have to counter hundreds of billions of dollars in export financing that foreign governments offer to their exporters,” the National Association of Manufacturers said in a letter to senators.
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