Leaders of the US House of Representatives said they reached a bipartisan deal to fund the US Export-Import Bank until September 30, 2014, and gradually increase its lending cap to USD$140 billion from the current USD$100 billion.
The deal, negotiated by Republican House Majority Leader Eric Cantor and Democratic House Minority Whip Steny Hoyer came just weeks before the bank's temporary charter was set to expire.
The nearly 80-year-old government bank provides direct loans and credit guarantees to help US exporters make sales in overseas markets that private lenders consider too risky. Boeing is the bank's biggest customer and many other US manufacturers also rely on its services.
Bank officials have warned that without a rise in the ceiling, they could soon reach the current lending cap of USD$100 billion, forcing them to stop supporting US exports.
Efforts to renew the Export-Import Bank's charter, which expires at the end of May, had run into objections from conservative Republicans, who say it is unnecessary government interference in the market. Delta Air Lines had raised concerns, saying it had been hurt by low-interest Exim Bank loans to foreign carriers.
The Senate must also approve reauthorisation, but the House agreement increases the chances a bill will be on President Barack Obama's desk before the bank's charter expires.
Last year, the Senate Banking Committee unanimously passed an alternative bill, which was supported by the Obama administration and would have reauthorised the bank for four years while raising the lending cap to USD$140 billion in one step.
Republicans and business groups praised the House deal.
"Action on this agreement is necessary to promote American exports and remove a threat to the creation of American jobs," Republican Speaker of the House John Boehner said in a statement urging all House members to support the package.
The National Association of Manufacturers, which has backed reauthorisation in the past, said the move would boost job growth.
"Leaders on both sides of the political aisle came together today to prevent the unilateral economic disarmament of the United States on the issue of export financing," the group said.
The Chamber of Commerce and the Business Roundtable also issued statements praising the deal.
The bill, in a nod to Delta's demands, directs the US Treasury Department to initiate and pursue multilateral negotiations for the purpose of reducing and then eliminating government export subsidies for aircraft and ultimately ending all government export subsidies. It requires the Treasury secretary to report annually on progress in those talks until export subsidies are eliminated.
The bill also requires the bank to give interested parties the opportunity to comment on any transaction over USD$100 million in a bid to ensure US companies are not put at a competitive disadvantage by a particular sale. Delta complained it has been hurt by the bank's lending to some foreign carriers such as Air India.