Export-Import Bank deal reached
Negotiations between Majority Leader Eric Cantor, R-Va., and Minority Whip Steny Hoyer, R-Md., set the stage for a House vote next week on extending the Export-Import Bank's authority to lend money to finance export sales, used extensively by Boeing.
Republican and Democratic House leaders agreed late Friday on legislation to extend the U.S. Export-Import Bank's authority for three years and raise its lending limit to $140 billion by 2014.
The agreement, after negotiations between Majority Leader Eric Cantor, R-Va., and Minority Whip Steny Hoyer, D-Md., sets the stage for a House vote next week on extending the bank's authority to lend money to finance export sales, used extensively by Boeing.
"Other nations are aggressively supporting their businesses' exports, making it more important than ever that U.S. manufacturers can secure the financing they need to make certain their products can compete in foreign markets," Hoyer said in a statement Friday night.
The showdown over the bank pitted manufacturers and business groups, which say the bank is vital for job creation and a key part of President Obama's efforts to double exports by the end of 2014, against those who argue it meddles in markets and doesn't adequately consider the impact on domestic industries.
Officials project the bank will reach its $100 billion lending cap by month's end, requiring action by Congress before then. The bill would raise the limit to $120 billion for the rest of the current fiscal year ending Sept. 30, to $130 billion in 2013 and $140 billion in 2014 if the bank meets some conditions.
Laena Fallon, spokeswoman for Cantor, said the House will vote on the legislation next week when Congress returns from a one-week recess.
Delta is leading a group of domestic carriers challenging Export-Import's lending practices in a lawsuit. They say foreign carriers are unfairly subsidized by U.S. loan guarantees to purchase aircraft from Boeing.
Foreign carriers have expanded their capacity by 12 percent on U.S. routes, leading some domestic carriers to reduce their routes, the group says.
Trebor Banstetter, a Delta spokesman, didn't immediately respond to requests for a comment.
To address concerns raised by Delta Air Lines and other U.S. carriers, the measure would order the Treasury secretary to pursue negotiations with foreign countries to reduce and cut government export subsidies for aircraft and eventually end them for all products, according to a summary of the measure.
The Export-Import Bank in 2011 provided a record $33 billion in export finance, with almost 90 percent of the transactions benefiting U.S. small businesses, Chairman Fred Hochberg said last month at the bank's annual conference.
The agency's financing has generated $1.9 billion in revenue for the U.S. Treasury within the last five years, Hochberg said. The bank says it finances about 2 percent of all U.S. exports, with the remainder paid for by the private sector.
The Obama administration supported raising the limit to $140 billion by the end of the 2014 fiscal year. In a letter to Congress, the administration estimated the bank may need a lending cap of as much as $159 billion by the end of fiscal 2015.
The U.S. Chamber of Commerce, the nation's largest business group, urged Congress to pass the bill to reauthorize the bank. Other countries are providing up to $1 trillion in export finance, dwarfing the Export-Import Bank.
"Failure to reauthorize Ex-Im would amount to unilateral disarmament and cost tens of thousands of American jobs," Tom Donohue, the chamber's president, said in a statement.
Manufacturers, including Boeing, had supported extending the bank's authority and raising its lending cap.
Jay Timmons, president of the National Association of Manufacturers, also praised the agreement. "We urge all members of the House to support this jobs legislation, and we hope the Senate will also move forward quickly," he said in a statement Friday.
Tim Neale, a Boeing spokesman in Washington, said he hadn't seen the agreement and had no immediate comment.