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Republican senators appear divided over whether to oppose a Democratic plan to attach the reauthorization of a federal agency that supports U.S. exports to a bill that would seek to spur greater access to capital by small firms.
Sen. Richard Shelby (R., Ala.), the top Republican on the Senate Banking Committee, said that he supported a four-year renewal of the U.S. Export-Import Bank, and would have no problem if that reauthorization was added to the small business capital bill.
Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor Tuesday morning that he wanted to add the bank's reauthorization to that bill.
"The business community thinks it's extremely important," Reid said. "It is important to other segments of our industrial base. It's an important piece of legislation and I hope that we can add that to the small business jobs bill."
The underlying legislation would include a number of initiatives aimed at facilitating greater access to capital by start-ups and other small firms. It would lift some of the regulatory red tape that some believe impedes smaller firms from attracting outside investors.
A version of that bill passed the House last week by a wide bipartisan margin, and it had been expected to be taken up by the Senate shortly.
The banking panel unanimously approved the four-year renewal of the Export-Import bank's mandate in September. The extension would increase the cap on the bank's financing activities to $140 billion from $100 billion over that period.
The bank provides loan guarantees and insurance and some limited direct subsidies to foreign companies that buy American exports. Most other wealthy nations have a similar entity that supports exports by their manufacturing companies.
Sen. Mike Johanns (R., Neb.), another GOP member of the Senate Banking Committee, and Sen. Rob Portman (R., Ohio) also said that they would support adding an extension of the bank's authority to the small business bill.
But two other Republicans, Sens. Jim DeMint (R., S.C.) and Pat Toomey (R., Pa.), said they opposed renewing the bank's current mandate at all, and favored getting the federal government out of the business of providing support for U.S. exports. They said they liked the idea of attaching a renewal of the bank's authority to steps to wind it down in the coming years. Some House Republicans, led by House Majority Leader Eric Cantor (R., Va.), have backed that approach recently.
"The Export-Import bank is an example of government involvement where we don't need it," DeMint said. "The markets will work, the banks will lend the money and frankly most of the companies that use it have a better balance sheet than we do."
Both DeMint and Toomey are backed by the tea party movement, which places doubts about the size and scope of the federal government at the core of its philosophy.
Perhaps reflecting the division among its rank-and-file members, Senate Republican leadership largely remained silent on what changes they would like to see made to the Export-Import bank's authority.
Instead, sticking to a parliamentary procedural argument, they have argued that tying its renewal to the small business capital bill could unnecessarily slow down the passage of a popular piece of legislation that both parties see as a job-creation measure.
Sen. John Thune (R., S.D.), a member of the GOP leadership team, said the question of whether the bank's mandate should be extended was an "issue for another day."
Sen. Richard Durbin (D., Ill.) said Democratic leadership hadn't decided whether to hold a stand-alone vote on the bank's reauthorization, or whether to add it to the underlying small capital legislation and then hold a vote on the entire package.
The difference is significant as the first approach wouldn't necessarily kill the entire bill if Republicans were to defeat the bid to renew the bank's authority.
Durbin said he thought Republicans would struggle to explain to the American people why they had voted against the federal government helping companies like Caterpillar Inc. (CAT) and Boeing Co. (BA) compete in the global marketplace.
The assistant majority leader said that Democrats were working on a package of investor protections that could also be added to the underlying small capital access bill to address concerns that the legislation could make it easier for firms to conceal accounting fraud.
A spokesman for the Securities and Exchange Commission said that Mary Shapiro, the agency's chairman, is concerned that "portions of the legislation either unnecessarily eliminate important investor protections or are not balanced with sufficient safeguards."
-By Corey Boles, Dow Jones Newswires; 202-862-6601; email@example.com
(Andrew Ackerman contributed to this article.)