The Senate shot down an amendment to reauthorize the U.S. Export-Import (Ex-Im) Bank Tuesday, handing a setback to Boeing in a lobbying battle against one of its own customers, Delta Air Lines.
The Ex-Im reauthorization, put forward as an amendment to a jobs bill passed by the House, was rejected in a 55-44 vote.
Senate Minority Leader Mitch McConnell (R-Ky.) urged Republicans to oppose cloture on the measure, saying it would stall the overall jobs package. He said the Senate could reauthorize the bank later in a standalone bill.
“If we add the Ex-Im Bank, we will only delay passage of a bipartisan jobs bill,” McConnell said on the floor.
Senate Majority Leader Harry Reid (D-Nev.) countered that time was short and the chamber had too much on its plate to wait on reauthorizing the bank. The Ex-Im Bank’s charter expires on May 31.
“We have a number of very important issues that we have to deal with and even though I believe in the Ex-Im program, it's going to drop to the bottom of the calendar because we have things that we have to do,” Reid said.
"Go ahead, my friends," Reid said. "You picked a fight where there is not a necessary fight, but you may be surprised how this weighs up. I say no more ... have at it. Vote 'no' on Ex-Im Bank."
Boeing, one of the largest Ex-Im loan recipients, was a big supporter of the bill that was co-sponsored by senators from both parties, including Republican Sens. Lindsey Graham (R-S.C.) and Richard Shelby (R-Ala.). Prominent business groups like the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers also backed the amendment, but a number of conservative groups opposed it, arguing Ex-Im amounts to corporate welfare.
After the vote, Boeing vowed to continue pressing for the bank’s reauthorization.
“We will continue to work with the broader business community, and parties on both sides of the aisle, to see the Bank reauthorized before America is disadvantaged in global competitions,” Boeing said in a statement. “Last year, Ex-Im facilitated about $40 billion in exports by American companies — large and small — and supported nearly 300,000 jobs. Reauthorizing the Bank and increasing its ability to support U.S. exports is essential to U.S. economic growth and jobs.”
Delta and Boeing are squaring off over the Ex-Im proposal, which would increase the bank’s loan cap from $100 billion to $140 billion. The Senate amendment would have kept the bank up and running for another four years.
Delta asked senators to reject the Ex-Im amendment ahead of Tuesday’s vote.
“The Export Import Bank (Ex-Im) finances our foreign airline competitors at below-market interest rates; has caused the loss of thousands of airline jobs; ignores its statutory duty to consider the effects of its financings on American companies and workers; and operates in secrecy,” Delta said in the letter, which was also signed by the Air Line Pilots Association and the Allied Pilots Association.
The airline argues the bank’s loans allow foreign competitors to buy airplanes at cheaper prices and thus offer lower fares to customers, squeezing U.S. companies in the process.
The debate over the Ex-Im Bank’s role in the airline industry has also reached the courts. Airlines for America (A4A), the industry’s trade group, and Delta are suing the bank for loan guarantees it made to Air India to help it buy Boeing airplanes.
An A4A spokesman said the group was expecting a court decision on the lawsuit in May or June this year.
Delta is also a Boeing customer, having announced last August that it planned to buy 100 of the company’s airplanes.
While Delta argues that Ex-Im Bank kills U.S. jobs, the bank’s supporters say reauthorizing it would boost the economy.
In a letter Thursday to senators, Bruce Josten, the Chamber’s executive vice president for government affairs, said the bank is a critical loan provider.
“While the vast majority of trade finance today is provided by commercial banks, Ex-Im plays an important role covering gaps in financing for U.S. exports where commercial financing is unavailable or faces competition from foreign export credit agencies. In FY 2011, Ex-Im supported export sales that sustained nearly 300,000 U.S. jobs at 3,600 companies,” Josten wrote in the letter.
The Chamber lobbyist also said the powerful business group would consider scoring votes on the amendment.
GOP-leaning trade associations like the Chamber backed the reauthorization, but conservative activist groups were adamantly opposed.
“The Export-Import Bank's actions are nothing more than market-distorting subsidies that pick winners and losers in the private sector. Market forces should dictate trade flows, not bureaucrats and politicians,” the Club for Growth said in a key vote alert to lawmakers opposing the bank’s reauthorization.
Heritage Action for America also opposed reauthorization of the bank and promised to score votes on the amendment.
House Majority Leader Eric Cantor (R-Va.) put forward a different plan for the Ex-Im Bank that would authorize a loan-cap limit of $113 billion for one year. Cantor’s plan would also require the president to seek an end to all export financing through international negotiations.
On Monday, Cantor said adding the Ex-Im Bank reauthorization to the jobs bill was a partisan move and could derail the larger bill, which Republicans have touted as a job creator.
— Erik Wasson and Josiah Ryan contributed.