| Updated 1/13/2012 2:10 AM ET |
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By Aamer Madhani, USA TODAY
WASHINGTON - U.S. exporters and major airline carriers are fighting over reauthorization of a federal trade bank that plays a key role in President Obama's jobs plan, according to industry insiders and congressional records.
House Republican leaders, pushed by the major U.S. airlines, delayed a long-term reauthorization of the Export-Import Bank and a decision on whether to increase the bank's lending cap to $135 billion from the current limit of $100 billion before lawmakers headed home last month.
The bank, which guarantees loans from U.S. banks to foreign businesses that then buy U.S.-made products, approved $32.7 billion in loans last year but is quickly edging toward hitting its cap. The bank, which was founded in 1934 and returns a modest amount of revenue to the Treasury, has been praised by Obama as a vital tool to his goal of doubling U.S. exports by 2015.
Officials from top exporting companies — including Boeing's James McNerney and General Electric's Jeffrey Immelt — warned House leaders in a letter last month that failure to increase the lending cap could lead to the loss of thousands of U.S. jobs.
"The bank's work is at risk of grinding to a halt," said John Murphy, vice president of international affairs at the U.S. Chamber of Commerce, adding that the bank is on track to max out in April or May.
Airlines for America (AFA), the trade association that represents the leading U.S. air carriers, insists that Congress make fundamental changes to how the bank operates as part of any increase in the lending cap. The group argues that the bank finances loans to foreign carriers at favorable terms unavailable to domestic carriers, putting U.S. airlines at a competitive disadvantage.
Steve Lott, a spokesman for AFA, said the group wants Congress to make any increase in the bank's loan ceiling contingent on increasing transparency of aircraft financing transactions and a prohibition on loan guarantees for foreign airlines with investment grade credit ratings that would allow them to secure financing without the bank's help.
"We're pro-Boeing; we're in support of the president's initiative to double exports … but we're concerned with any market distortion that creates an unleveled playing field," Lott said.
In the past decade, the bank has provided more than $52 billion in loan guarantees to buy Boeing aircraft, Airlines for America says. Foreign airlines took delivery of 792 wide-body aircraft, compared with 189 for U.S. airlines, AFA says.
AFA also recently sued to stop the bank from delivering $1.3 billion in loan guarantees to Air India to buy Boeing aircraft. A federal judge in Washington is expected to rule today on a request to block the guarantees while he considers the legal challenge.
Boeing's backers say that such rule changes would help foreign competitors, such as Airbus, the European aircraft manufacturer.
"Our argument is that if you undermine the credibility and competitiveness of Ex-Im, you're not going to help the American carriers, you're going to help Airbus," said John Hardy, president of a Coalition for Employment through Exports, which counts Boeing as a member.
The Obama administration supports expanding the cap. Last month, the president touted the bank for playing a critical role in a multibillion-dollar deal for Indonesia's Lion Air to buy 230 Boeing jets. And earlier this week at a White House conference on "insourcing" American jobs, the White House hailed a $636 million direct loan from the Ex-Im Bank to finance the sale by Siemens Energy of gas and steam turbines to be installed in Saudi Arabia. The Siemens project will support 825 jobs in North Carolina.
Reauthorizing the bank and expanding its lending cap is an administration priority, and "we will continue to work closely with Congress to get this done," White House spokeswoman Amy Brundage said.
Both sides have put up big lobbying efforts to make their case to Congress.
Delta hired lobbyists with ties to top Democrats and Republicans. Airlines for America relied on lobbying firms with ties to the Obama and George W. Bush administrations. Boeing used eight outside firms — in addition to their own in-house lobbyists — to lobby on Ex-Im reauthorization in the third quarter of 2011, according to disclosure forms.
The GOP-led House and Democrat-led Senate passed bills increasing the bank's lending limit last fall, but the reauthorization was not included in the spending bill passed before the holiday recess. House Republicans have held up passage of a combined bill as airlines have boosted their lobbying.
House Speaker John Boehner's spokesman, Brendan Buck, did not respond to a request for comment; House GOP leader Eric Cantor was overseas and could not be reached, spokeswoman Laena Fallon said.
Rich Michalski, an International Machinists and Aerospace Workers Union vice president, blamed GOP leadership for delaying in the extension of the cap.
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