Republicans in the US Senate have voted against attempts to extend the lending capacity of the US Export-Import Bank (US Exim) on 20 March.

Supporters of the agency hoped to secure a four–year extension of the bank’s charter as well as an increase in its lending capacity to US$140bn.

In an attempt to get the reauthorisation of the bank passed, the bill was to be tapped on to a small business capital bill also being voted on by the senate. However, such moves were blocked by Republicans with the senate failing to get the required 60 votes needed to add the bill to the larger piece of legislation.

The bank’s charter runs out by the end of May, and officials at the bank warn that it could hit its current US$100bn financing cap in a few weeks time unless an extension is granted.

Fred Hochberg, chairman of the bank, believes the senate’s failure to pass the reauthorisation of the bank is a “setback for American workers who produce the high-quality goods and services that are in demand around the world”.

“Delays in renewing the charter threaten over 1,000 export-related jobs that are supported every workday by US Ex-Im financing. Not reauthorising the bank places American companies at a serious disadvantage against their foreign competitors,” he argues.

“We are already hearing that some customers of US exporters are considering switching their purchases to foreign companies due to the uncertain availability of future Ex-Im Bank financing.”

The Obama administration has heralded US Exim as a vital tool to help the country double US exports by the end of 2014. The president himself has recently talked of the need for US Exim support to keep US exports competitive in the global marketplace.

Addressing the Senate floor on March 20, Democratic Senator Harry Reid argued that the reauthorisation of US Exim should receive bipartisan support given that it is helps maintain and create US jobs.

“The Ex-Im Bank is one of those proposals we shouldn’t have to argue over. But true to form, Republicans in the house are once again spoiling for a fight where there shouldn’t be one,” he told the senate.

Republicans justified the blocking of the bill by arguing that they should be allowed to make amendments to the legislation.
Senator Lindsey Graham led the Republicans against the bill, and despite publicly airing his support for the extension of US Exim’s mandate, he told senate: “What is a bad idea is not to let anyone on the Republican side offer one amendment to this bill. Some of the ideas to reform the Ex-Im Bank I would agree to. I think any organisation…can be made better.”

Some Republicans however are fundamentally opposed the principal of US Exim, arguing that export finance is a form of “corporate welfare”.