WASHINGTON, Dec 2 (Reuters) - The U.S. Export-Import Bank, which helps big exporters such as Boeing and Caterpillar make foreign sales, might have to stop operations unless Congress raises its $100 billion “exposure cap,” U.S. government and business officials said on Friday.
Current law limits the amount of credit exposure the bank can hold to $100 billion. In recent years, the bank has been funding new projects faster than old loans have been repaid.
“If we don’t get an increase in the exposure cap, we will reach our limit in the next few months at the current pace of operation,” Phil Cogan, a spokesman for Ex-Im, told Reuters.
John Hardy, president of the Coalition for Employment through Exports, told reporters he hoped Congress would raise the cap as part of an omnibus spending bill lawmakers are trying to pass in coming weeks.
“We’re literally talking a matter of days at this point before this matter is addressed,” Hardy said, but added it was difficult to predict what Congress would do.
Cogan said it was unclear whether legislation to reauthorize the bank and lift the exposure cap would be included in the omnibus bill.
Ex-Im provides direct loans and loan guarantees to support U.S. exports. The global financial crisis increased demand for its loans and guarantees as other sources of financing were squeezed.
The bank is also playing a big role in helping President Barack Obama’s administration meet its goal of doubling exports by the end of 2014.
Ex-Im approved more than $32 billion in total authorizations in the 2011 fiscal year, blowing past the previous record of $24.5 billion in 2010.
The bank earned a profit of about $700 million on its fiscal 2011 operation and historically has a default rate of less than 2 percent, which it has been able to cover out of the revenues it collects, Cogan said.
The bank’s latest reauthorization expired on Sept. 30, but it has been kept operating as part of a continuing resolution to fund government programs through Dec. 16.
A bill in the House of Representatives would raise the exposure cap to $160 billion over the next four years, while a similar bill in the Senate put the limit at $140 billion.
But in the aftermath of the fierce summer debate over raising the debt ceiling, conservative Republicans have pushed for a cap of less than $140 billion.