WASHINGTON The Senate voted on Tuesday to renew the U.S. Export-Import Bank's charter through September 2014 and raise its lending cap to $140 billion, overcoming objections from conservative Republicans who wanted to shut the bank down.
The bill now goes to President Barack Obama, who said he would sign it and praised lawmakers from both parties for coming together to pass the bill.
"This important step will help American businesses create jobs here at home and sell their products around the world - all at no cost to taxpayers," Obama said in a statement.
The Senate voted 78-20 to approve the bill, just a few weeks before the bank's charter expires on May 31. Bank officials also warned they were close to reaching their current $100 billion lending cap because of record demand in recent years.
Twenty-seven of the Senate's Republicans voted for the renewal and 19 against. The House of Representatives passed the same bill last week by a vote of 330-93. All of the 'no' votes in that chamber were Republican.
Senate Majority Leader Harry Reid, a Nevada Democrat, said the nearly 80-year-old government bank is needed to compete with other government export credit agencies around the world.
"We can't afford to give an inch to our global competitors. Canada, France and India already provide seven times the assistance for exporters that America does. China and Brazil provide 10 times the support," Reid said.
Ex-Im provides direct loans and other financing assistance to help U.S. exporters make foreign sales.
U.S. aircraft manufacturer Boeing is the bank's biggest beneficiary, and other top clients include Caterpillar, General Electric and KBR.
Last year, the bank authorized more than $32 billion in financing to support $40.6 billion in exports from more than 3,600 U.S. companies. It estimates that activity supported about 290,000 export-related jobs.
The Senate action allows "the bank to continue financing U.S. exports to meet foreign competition and fill the void when commercial funding is unavailable," Ex-Im President Fred Hochberg said in a statement.
What has usually been a routine reauthorization of the bank became much more complicated this year due partly to concerns raised by the conservative Tea Party wing of the Republican party.
Many Republicans elected in 2010 see the bank as unnecessary government interference in the private market, even though the bulk of the party still supports the bank.
"The government shouldn't be picking winners and losers. We need to end the corporate welfare that distorts the market and feeds crony capitalism," Senator Mike Lee, a Utah Republican, said during Senate debate.
"The corporations that largely benefit from the Ex-Im Bank should have no trouble marshalling their resources to compete in today's economy. If they are struggling, then they are most likely not deserving of taxpayer help," Lee said.
Conservative groups, such as Club for Growth, also questioned the need for the bank and raised concern about potential taxpayer losses as its loan volume swells.
Bank defenders say it is conservatively run and has earned $3.7 billion in profits for taxpayers since 2005.
Business groups such as the U.S. Chamber of Commerce and National Association of Manufacturers lobbied hard for the bank.
Against that backdrop, House Republican leader Eric Cantor and second-ranking House Democrat Steny Hoyer struck a deal earlier this month to renew Ex-Im's charter until September 2014.
That deal, reflected in the bill approved last week by the House and on Tuesday by the Senate, immediately increases the bank's lending cap to $120 billion through September.
It increases the cap to $140 billion in equal installments over the following two years, as long as loan defaults remain below 2 percent and the bank meets other conditions.
The bill also addresses a complaint from Delta Air Lines that it has been hurt by the bank's lending to foreign competitors such as Air India at interest rates lower than the carrier could get for itself.
The bill directs the U.S. Treasury Department to pursue trade talks aimed at reducing and then eliminating government export subsidies.
The legislation also requires the bank to give interested parties an opportunity to comment on any transaction over $100 million to try to ensure that U.S. companies are not placed at a competitive disadvantage by a particular sale.
(Editing by Dan Grebler and Cynthia Osterman)