* Boeing is Eximbank’s biggest customer
* Delta says hurt by Eximbank loans to foreign carriers
By Doug Palmer
WASHINGTON, April 17 (Reuters) – A bipartisan deal to keep
the U.S. Export-Import Bank operating past the end of May
appears to be in reach despite concerns raised by conservative
Republicans and Delta Air Lines that have blocked action so far,
a top Democratic senator said on Tuesday.
“I am feeling more and more confident that this ill-advised
effort to block the Eximbank has run its course and is about to
run out of gas. I think we can have a deal sooner rather than
later,” Senator Charles Schumer said at Senate Banking Committee
hearing on the bank’s future.
The nearly 80-year-old government bank provides direct loans
and credit guarantees to help U.S. exporters make sales in
markets that private lenders consider too risky to operate on
their own. Boeing Co is the bank’s biggest customer, and
many other U.S. manufacturers also rely on its services.
“Last year, the bank supported almost $33 billion in export
financing and helped support 290,000 American jobs,” Senate
Banking Committee Chairman Tim Johnson said. “It’s important to
note that the bank does this at no cost to taxpayers, charging
interest and fees to cover all of its expenses.”
Efforts to renew Eximbank’s charter, due to expire on May
31, have run into objections from conservative Republicans who
say it is unnecessary government interference in the market.
Delta Air Lines has raised concerns, saying it has been
hurt by low-interest Eximbank loans to foreign carriers.
China, Canada, France, Brazil and other countries have
similar government export credit agencies.
Bank supporters such as the U.S. Chamber of Commerce and THE
National Association of Manufacturers have said the institution
is conservatively run, has experienced very few defaults and
makes money for the government.
President Barack Obama has touted it as a key to his
administration’s goal of doubling exports.
ALTERNATIVE PLAN
The bank has historically had bipartisan support and last
September the Senate Banking Committee unanimously passed a bill
to renew the bank’s charter to 2015 and raise its lending
authority to $140 billion, from $100 billion currently.
However, that bill failed to clear the full Senate and an
alternative plan in the House of Representatives, crafted by
Majority Leader Eric Cantor, would renew the bank’s charter for
only a year and raise the cap to just $113 billion.
The stand-off has threatened to put the Eximbank out of
business at a time when the Obama administration and U.S.
business groups are saying foreign export credit agencies are
moving aggressively to support their countries’ exports.
Schumer, the Senate’s No. 3 Democrat, said he sensed the
situation was beginning to change. “In recent days, Leader
Cantor has appeared more eager to negotiate a solution with
Democrats as a way out. Also, my office has recently been in
touch with Delta … At this point, my impression is they are
scaling back their demands so that a resolution may not be far
off,” Schumer said.
Delta welcomed Schumer’s involvement but denied in a
statement that it had changed its position on the need for more
transparency in Eximbank’s operation and “an analysis of its
impact on U.S. airline employees when it guarantees widebody
aircraft loans for foreign carriers.”
The Atlanta-based carrier also said it still wants the U.S.
government to press for an agreement with European export credit
agencies to end government-backed loans for widebody aircraft
used primarily on long international flights.
A business group lobbyist who asked not to be named said
Cantor and Representative Steny Hoyer, the House’s No. 2
Democrat, have been in talks, raising hopes of a deal.
Senator Richard Shelby, the senior Republican on the Senate
Banking Committee, said the bill passed by the panel last
September already contained “several important reforms that will
make the bank more accountable.”
It includes provisions requiring Eximbank to publicly
disclose more details on transactions valued at more than $100
million before its board can approve them and to publish a
strategic plan outlining its objectives.
It also requires the U.S. Government Accountability Office
to study Eximbank’s risk management practices to determine if
they pose any risk to American taxpayers.
“I believe that this study could also provide the basis for
enacting further reforms of Exim’s operations and accounting
practices,” Shelby said.
