The fight pits the second-biggest U.S. air carrier against the nation's largest exporter and is a fresh challenge to the export financing agency, which will have to shut down at the end of May unless there is congressional action.

Delta's demands, which Eximbank supporters say could hobble the bank's operations, add to the difficulties the Obama administration faces in keeping the doors open at the nearly 80-year-old government institution.

Republicans in House of Representatives already are chafing because of the bank's use of taxpayer-backed loans to finance exports, worried about the potential for loan defaults. Last week, a top Republican floated a draft bill that would only renew the charter until June 1, 2013, while raising the bank's credit ceiling to $113 billion from $100 billion.

That's well short of the four-year renewal and $140 billion credit ceiling sought by the White House and a bipartisan compromise last year that would push the cap to $135 billion.

After back-to-back years of record lending, the Eximbank is already bumping up against its $100 billion credit cap and may have to stop making loans before its extension expires.

Eximbank President Fred Hochberg, at news conference on Wednesday with Senate Democrats, told reporters on Wednesday that a one-year renewal was not long enough for exporters to be able to make plans.

"You can't build an economy to last, build products to last 12 months at a time," Hochberg said, adding that export projects already in the pipeline could quickly take the bank well past a $113 billion cap. "The amount's the wrong amount and the time is not the time businesses need."

HOPE FOR DEAL THIS MONTH

With Congress scheduled to be on recess the first two weeks of April, Boeing and other Eximbank supporters hope a deal on a four-year renewal can be struck by the end of March.

Senate Majority Leader Harry Reid, a Nevada Democrat, said Boeing President Jim McNerney has pressed for quick action.

Heeding that call, Reid plans for the Senate to vote soon on an amendment by Senator Maria Cantwell that would renew the bank's charter through 2015 and raise its credit cap to $140 billion. Cantwell is from Washington state, where most of Boeing's production is based.

Delta, which has both domestic and international flights, says it is hurt by Eximbank financing that allows foreign carriers such as Air India or Dubai-based Emirates Airline EMIRA.UL to buy Boeing planes at lower interest rates than the Atlanta-based airline can get in the commercial market.

The Air Transport Association of America, which represents Delta and other U.S. airlines, sued in November to block $3.4 billion in Eximbank loan guarantees for the sale of 30 Boeing aircraft to Air India. The court denied an initial injunction and the case is pending.

Ben Hirst, general counsel for Delta, said the airline's ultimate aim is to eliminate all export financing for wide-body jets, such as Boeing's 777 and Airbus' A380, which are the type used on long international flights.

MARKET RATES

"We don't see why there can't be talks (between the United States and the European Union) that eliminate financing for wide-body aircraft in international transportation. So we're asking Congress to adopt that as an objective," Hirst said.

But Cantwell, whose state has more than 100,000 aerospace manufacturing workers, said the United States already has led an international effort to make government financing of aircraft more market-based.

"Part of the complaints that Delta has is about some notion about market rates," she said. "Well, there's an agreement that will take effect in January of 2013 that answers that."

In addition, "these companies that are complaining (about Eximbank financing) are also taking advantage of right now of the same programs in Canada. For example, Delta buying Bombardier regional jets under the same (government export credit financing) program," Cantwell said.

U.S. government and industry officials say the dispute is complicating efforts to renew the agency's charter.

The House Republican draft bill, which one administration official called a "non-starter," addresses Delta's concerns on several fronts and also requires increased reporting by Eximbank on any loan defaults that might occur.

It directs the White House to initiate international negotiations to "substantially reduce export credit financing" for large air carrier aircraft. It also urges a broader negotiation to eliminate all subsidized export credit financing.

In addition, the bill would require Eximbank to consider the "potentially adverse effects" on companies like Delta on loans or credit guarantees to foreign carriers.

An Obama administration official, speaking on condition of anonymity, said Delta's hope for an agreement to end government export financing for large aircraft was "utopian" because European governments have told the United States they are determined to continue such loans for Airbus.

If Washington does not provide similar loans, Boeing will simply lose sales to its European competitor, the official said.

But Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, agreed with Delta's argument that the only reason one side provides export financing for aircraft is because the other side does.

"That is pretty much correct," Hufbauer said. "I think there is a bargain to be made there."

(The story corrects dateline to March 14, corrects to $140 billion from $135 billion in paragraph 11)

(Reporting by Doug Palmer)

• A Permanent Economic Emergency