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House lawmakers approved a three-year reauthorization of a federal agency that provides assistance to U.S. firms selling generally big-ticket goods abroad, and that had found itself thrust into the limelight of a congressional fight over concerns over the size and scope of the federal government.
The U.S. Export-Import Bank helps U.S. manufacturers sell products to overseas customers by providing loan guarantees and some forms of limited insurance to ease those foreign buyers' ability to buy American products.
Its biggest customers are large U.S. exporters particularly firms like Boeing Co. (BA), Caterpillar Inc. (CAT), General Electric Co. (GE) and Honeywell International (HON).
The bank's authorization was renewed through fiscal year 2014 with an increase in its financing cap to $140 billion from its current $100 billion during that period. The increase in its financing ceiling is structured to go up gradually and only if the bank maintains a default rate of less than 2% on the financing assistance it provides.
Rep. Gary Miller (R., Calif.), one of the authors of the legislation extending the bank's mandate, said in a floor debate before the vote that the bank's current default rate was less than 1.5%.
Senate Majority Leader Harry Reid (D., Nev.) said this week that he intended to bring up the House legislation. A Democratic leadership aide said the Senate could move on the bill as soon as later Wednesday, but cautioned that depended on the level of opposition among Senate Republicans.
Typically the Export-Import bank has been renewed on autopilot with little attention paid to it. Although the 330-93 House vote was ultimately a strong endorsement of continuing its mandate, it came after two months of wrangling over the role the bank plays in promoting U.S. exports.
Some conservative Republicans had expressed concern both about what they saw as interference by the federal government in private markets, and about the potential cost to the taxpayer.
But Democratic and Republican defenders of the bank have argued that it has never cost the taxpayer a single dime, and in fact has consistently returned a modest profit to the Treasury. They further argued that every major foreign trading partner of the U.S. operates a similar entity that helps domestic exporters, leaving American exporters at a disadvantage if it failed to continue the bank.
An agreement was reached last week between House Majority Leader Eric Cantor (R., Va.) and Minority Whip Steny Hoyer (D., Md.) that paved the way for the legislation to come to the floor this week.
Cantor said that while he was "no fan of government subsidies" he believed the bill "brings strong necessary reforms" to the bank, while ensuring the U.S. didn't "unilaterally disarm" and stop providing financing assistance to the country's exporters.
Hoyer said the bank supported 300,000 U.S. manufacturing jobs and was integral to the country remaining competitive internationally.
To mollify conservative critics, the legislation includes directions to the Obama administration that it must initiate negotiations with foreign trading partners--primarily the European Union--about winding down assistance to exporters. The Treasury secretary would be instructed to report back to Congress annually until this goal is accomplished. But this language doesn't limit the bank's activities in the absence of such an international agreement.
It does require more transparency about the bank's activities by submitting business plans to Congress.
In the Senate, tea-party-backed Republican lawmakers are demanding the right to hold votes seeking to amend the legislation reauthorizing the bank, and have threatened to hold up a vote on final passage until they get their way.
Leadership aides of both parties have said an agreement is likely to be reached to allow some votes to occur followed by the expected final approval of the bill in the coming days.
-By Corey Boles, Dow Jones Newswires; 202-862-6601; firstname.lastname@example.org