Leaders of the US House of Representatives said on Friday they reached a bipartisan deal to reauthorize the US Export-Import Bank through Sept. 30, 2014, and gradually increase its lending cap to US$140 billion from the current US$100 billion.
The deal, negotiated by Republican House Majority Leader Eric Cantor and Democratic House Minority Whip Steny Hoyer came just weeks before the bank’s temporary charter was set to expire.
The nearly 80-year-old government bank provides direct loans and credit guarantees to help US exporters make sales in oversea markets that private lenders consider too risky. Boeing Co is the bank’s biggest customer and many other US manufacturers also rely on its services.
Bank officials have warned that without a rise in the ceiling, they could soon reach the current lending cap of US$100 billion, forcing them to stop supporting US exports.
Efforts to renew the Export-Import Bank’s charter, which expires on May 31, had run into objections from conservative Republicans, who say it is unnecessary government interference in the market. Delta Air Lines had raised concerns, saying it had been hurt by low-interest loans by the bank to foreign carriers.
The Senate must also approve reauthorization, but the House agreement increase chances a bill reauthorizing the bank will be on US President Barack Obama’s desk before the bank’s charter expires later this month.
Last year, the Senate Banking Committee unanimously passed an alternative bill, which was supported by the Obama administration and would have reauthorized the bank for four years while raising the lending cap to US$140 billion in one step.
Republicans and business groups praised the House deal.
“Action on this agreement is necessary to promote American exports and remove a threat to the creation of American jobs,” Republican Speaker of the House John Boehner said in a statement urging all House members to support the package.
The National Association of Manufacturers, which has backed reauthorization in the past, said the move would boost job growth.
“Leaders on both sides of the political aisle came together today to prevent the unilateral economic disarmament of the US on the issue of export financing,” the group said.
The Chamber of Commerce and the Business Roundtable also issued statements praising the deal.
The plan raises the bank’s lending cap to US$120 billion through the end of the current fiscal year in September and allows it to rise to US$140 billion in equal increments over the next two years, as long as the bank maintains a default rate of less than 2 percent.