ADMINISTRATION LIKELY TO PROPOSE LIMITED BUDGET FOR EX-IM BANK

ADMINISTRATION LIKELY TO PROPOSE LIMITED BUDGET FOR EX-IM BANK

The Reagan administration is expected to let the Export-Import Bank's capital continue to decline.

The administration is not expected to propose more than about $700 million for Ex-Im Bank's fiscal 1989 direct lending program, and it will not ask Congress to extend Ex-Im Bank's war chest, a special fund to counter foreign export subsidies.Industry representatives say they will be disappointed if the administration follows such policy lines, particularly because U.S. exporters are in growing need of Ex-Im Bank financing.

Foreign demand for U.S. exports is growing, says Will Berry, vice president of the National Foreign Trade Council, and U.S. commercial banks, he says, are clearly moving out of the export finance business.

Ex-Im Bank reportedly projects that demand for its direct credits in fiscal 1989 could approach $1.5 billion, about double the lending authority the administration is expected to propose to Congress.

Philosophically, the Reagan administration has consistently favored a limited role for Ex-Im Bank. It also cites budgetary constraints in justifying relatively small lending ceilings for the agency.

U.S. exporter groups, such as the Washington-based Committee for Employment through Exports, are likely to appeal to Congress to help fortify Ex-Im Bank.

Bruce Talley, the committee's director, said he would favor a $1 billion lending authorization for Ex-Im Bank in fiscal 1989.

Meanwhile, the committee and other U.S. business groups seem likely to support legislation about to be introduced by Sen. John Heinz, R-Pa., to bolster the bank's capital. Ex-Im Bank reserves have been steadily falling

because of past interest rate differentials.

Sen. Heinz would ease Ex-Im Bank's repayments to the Federal Financing Bank, appropriate explicit subsidy funds for Ex-Im Bank, and extend for two more years, through September 1990, the agency's $200 million war chest.

Exporters also may get help from Rep. Robert Garcia, D-N.Y., who has set a House Banking subcommittee hearing Feb. 25 on Ex-Im Bank's future. John Bohn Jr., the Ex-Im Bank chairman, who apparently feels that Ex-Im Bank's capital base must be strengthened, is slated to testify.

Rep. Garcia probably will decide after the hearing whether to sponsor legislation similar to Sen. Heinz', aides say.