U.S. Senate shows strong support for Ex-Im bank in test vote

WASHINGTON (Reuters) - The U.S. Senate expressed strong support of the U.S. Export-Import Bank on Wednesday in a test vote amid efforts by conservatives to close the export credit agency when its mandate expires at the end of the month.

The Senate voted 65-31 against setting aside an amendment to a defense bill that would renew Ex-Im's charter and implement some reforms to the 80-year-old trade bank.

While the amendment was subsequently withdrawn due to other hurdles, the vote suggests that a separate measure to keep Ex-Im open had more than enough support to beat back any blocking attempts and easily pass the Senate.

"This will be a signal to the markets that the Senate is in support of the bank," said Senator Lindsey Graham, a Republican from South Carolina, prior to the vote. He was a co-sponsor of the Ex-Im amendment, along with Republican Senator Mark Kirk and Democratic Senator Heidi Heitkamp.

A vocal group of conservative Republicans in both the Senate and House of Representatives want to close the bank because they believe it represents free-market interference by government bureaucrats, puts taxpayer funds at risk and promotes "crony capitalism" by subsidizing foreign sales by large corporations such as Boeing Co and General Electric Co.

Democrats and more moderate Republicans warn that closing Ex-Im will hurt U.S. exports and cost thousands of manufacturing jobs by giving an advantage to foreign governments that generously subsidize their own exports.

If Congress does not act by June 30, Ex-Im will have to stop lending and writing new trade guarantees.

But attaching Ex-Im to the National Defense Authorization bill now under consideration in the Senate is considered problematic because the two issues are not directly related. President Barack Obama also has threatened to veto the defense measure over funding levels and other issues.

Lawmakers and aides in both parties say that a more plausible scenario would be to attach the Ex-Im renewal to a transportation funding bill that will be considered in July. However, this would mean at least a short lapse in Ex-Im lending and may cause some deals to collapse.

Heitkamp called on Republican Senate leaders to allow a stand-alone vote on an Ex-Im measure.

"When you get this kind of support from the United States Senate, almost veto-proof support, maybe we ought to move the bill," Heitkamp said after the vote.

(Reporting by David Lawder and Krista Hughes; Editing by Sandra Maler and Lisa Shumaker)