Shrugging off a revolt from fiscally conservative Republican backbenchers, the House on Wednesday pushed through a last-minute bill to reauthorize the U.S. Export-Import Bank, which supports American companies that do business in foreign countries. The bank's current charter expires May 31.
Some congressional Republicans, backed by outside groups such as the Club for Growth, have opposed efforts to reauthorize the bank, threatening the existence of the 77-year-old independent federal agency. Major business groups such as the U.S. Chamber of Commerce had lobbied heavily to keep the Ex-Im Bank in business.
House Majority Leader Eric Cantor, Virginia Republican, on Friday struck a last-minute deal with Democrats to raise the bank's lending cap through Sept. 30, 2014, to $140 billion, from $100 billion currently, adding new language to address concerns about potential defaults.
"This is about making sure we can sell American all over the globe," said Rep. Robert J. Dold, Illinois Republican. "It's something that I think is vital, something that I think all of our colleagues should be supporting."
"We can either stand in the way of America's ongoing recovery," added Rep. Carolyn McCarthy, New York Democrat, "or speed it up."
But Rep. Tom McClintock, California Republican, said past Ex-Im Bank beneficiaries included bankrupt, scandal-plagued companies such as solar-panel maker Solyndra and energy company Enron.
"Legitimate companies have plenty of access to private capital," he added. "They don't need these subsidies."
The House passed the measure with vote of 330-93, with all 93 "no" votes coming from Republicans. The measure was considered under an expedited House procedure that required supporters to win a two-thirds majority to pass.
The Senate is expected to approve the reauthorization in the next few days. Senate Majority Leader Harry Reid of Nevada promised earlier this week that his chamber would vote on the bill soon after the House approves it. It has wide support from Democrats.
Senate Republicans blocked an earlier vote on a similar measure, but now seem more receptive to it and have recently eased their opposition to the bank's reauthorization.
The Obama administration, which has a goal of doubling U.S. exports by 2014, has voiced support for the bill, and the president is expected to sign it soon after the Senate approves it.
The bank's primary mission is to provide financing for U.S. exporters, in particular to markets where private bank loans are not available at competitive rates. Borrowers range from small businesses to giant corporations such as airplane manufacturer Boeing.
Under the House bill, the Treasury Department will be directed to hold multilateral negotiations with foreign countries that have similar banks to reduce or end all export subsidies. The Ex-Im Bank will also be required to maintain a default rate below 2 percent or risk losing future funding.
Supporters of the bill say this won't be a problem because the bank already is below that rate. In fact, the bank generally turns a profit. In 2011, the bank generated $700 million in revenues from fees charged for its loan guarantees. It brought in a total of $3.4 billion between 2006 and 2010.
The Ex-Im Bank sparked an internal battle among Republicans, some of whom have supported reauthorization while others opposed it.
Traditionally, Republicans have backed the Ex-Im Bank, which has strong support from the U.S. Chamber of Commerce, the National Association of Manufacturers, and even the AFL-CIO.
Supporters argue the bank keeps American companies competitive overseas by offering loans and credit guarantees to international customers who otherwise could not afford to buy American products. Countries such as China, Germany, Brazil and France offer even more export financing to prop up their companies, supporters argue.
"In a perfect world, perhaps we wouldn't have to do this," said Rep. John Campbell, California Republican. "But, you know what, in a perfect world we wouldn't have to have airport security."
But the Club for Growth, in a statement after the vote, said the result "provides a great contrast between "pro-business" lawmakers (who support subsidies and bailouts) and "pro-free market" lawmakers (who oppose subsidies and bailouts)."
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