[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                     THE ROLE OF THE EXPORT-IMPORT

                      BANK IN U.S. COMPETITIVENESS

                            AND JOB CREATION

=======================================================================



                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                         INTERNATIONAL MONETARY

                            POLICY AND TRADE

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 10, 2011

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 112-15




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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                   SPENCER BACHUS, Alabama, Chairman

JEB HENSARLING, Texas, Vice          BARNEY FRANK, Massachusetts, 
    Chairman                             Ranking Member
PETER T. KING, New York              MAXINE WATERS, California
EDWARD R. ROYCE, California          CAROLYN B. MALONEY, New York
FRANK D. LUCAS, Oklahoma             LUIS V. GUTIERREZ, Illinois
RON PAUL, Texas                      NYDIA M. VELAZQUEZ, New York
DONALD A. MANZULLO, Illinois         MELVIN L. WATT, North Carolina
WALTER B. JONES, North Carolina      GARY L. ACKERMAN, New York
JUDY BIGGERT, Illinois               BRAD SHERMAN, California
GARY G. MILLER, California           GREGORY W. MEEKS, New York
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
SCOTT GARRETT, New Jersey            RUBEN HINOJOSA, Texas
RANDY NEUGEBAUER, Texas              WM. LACY CLAY, Missouri
PATRICK T. McHENRY, North Carolina   CAROLYN McCARTHY, New York
JOHN CAMPBELL, California            JOE BACA, California
MICHELE BACHMANN, Minnesota          STEPHEN F. LYNCH, Massachusetts
KENNY MARCHANT, Texas                BRAD MILLER, North Carolina
THADDEUS G. McCOTTER, Michigan       DAVID SCOTT, Georgia
KEVIN McCARTHY, California           AL GREEN, Texas
STEVAN PEARCE, New Mexico            EMANUEL CLEAVER, Missouri
BILL POSEY, Florida                  GWEN MOORE, Wisconsin
MICHAEL G. FITZPATRICK,              KEITH ELLISON, Minnesota
    Pennsylvania                     ED PERLMUTTER, Colorado
LYNN A. WESTMORELAND, Georgia        JOE DONNELLY, Indiana
BLAINE LUETKEMEYER, Missouri         ANDRE CARSON, Indiana
BILL HUIZENGA, Michigan              JAMES A. HIMES, Connecticut
SEAN P. DUFFY, Wisconsin             GARY C. PETERS, Michigan
NAN A. S. HAYWORTH, New York         JOHN C. CARNEY, Jr., Delaware
JAMES B. RENACCI, Ohio
ROBERT HURT, Virginia
ROBERT J. DOLD, Illinois
DAVID SCHWEIKERT, Arizona
MICHAEL G. GRIMM, New York
FRANCISCO ``QUICO'' CANSECO, Texas
STEVE STIVERS, Ohio

                   Larry C. Lavender, Chief of Staff
        Subcommittee on International Monetary Policy and Trade

                  GARY G. MILLER, California, Chairman

ROBERT J. DOLD, Illinois, Vice       CAROLYN McCARTHY, New York, 
    Chairman                             Ranking Member
RON PAUL, Texas                      GWEN MOORE, Wisconsin
DONALD A. MANZULLO, Illinois         ANDRE CARSON, Indiana
JOHN CAMPBELL, California            DAVID SCOTT, Georgia
MICHELE BACHMANN, Minnesota          ED PERLMUTTER, Colorado
THADDEUS G. McCOTTER, Michigan       JOE DONNELLY, Indiana
BILL HUIZENGA, Michigan


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    March 10, 2011...............................................     1
Appendix:
    March 10, 2011...............................................    29

                               WITNESSES
                        Thursday, March 10, 2011

Bhatia, Karan, Vice President and Senior Counsel, General 
  Electric.......................................................     5
Ickert, David, Vice President of Finance, Air Tractor, Inc.......     9
Law, Kevin S., President and Chief Executive Officer, Long Island 
  Association (LIA)..............................................    10
Scherer, Scott, Senior Vice President, Boeing Capital Corporation     7

                                APPENDIX

Prepared statements:
    Miller, Hon. Gary G..........................................    30
    Bhatia, Karan................................................    32
    Ickert, David................................................    37
    Law, Kevin...................................................    42
    Scherer, Scott...............................................    45

              Additional Material Submitted for the Record

Miller, Hon. Gary G.:
    Written statement of the Coalition for Employment through 
      Exports (CEE)..............................................    50
    Written statement of the National Association of 
      Manufacturers (NAM)........................................    56
    Written statement of USA Maritime............................    60


                     THE ROLE OF THE EXPORT-IMPORT



                      BANK IN U.S. COMPETITIVENESS



                            AND JOB CREATION

                              ----------                              


                        Thursday, March 10, 2011

             U.S. House of Representatives,
                      Subcommittee on International
                         Monetary Policy and Trade,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 2128, Rayburn House Office Building, Hon. Gary Miller 
[chairman of the subcommittee] presiding.
    Members present: Representatives Miller of California, 
Dold, Campbell, McCotter, Huizenga; McCarthy of New York, 
Moore, and Perlmutter.
    Chairman Miller of California. The hearing will come to 
order. Without objection, all members' opening statements will 
be made a part of the record.
    We have agreed to 10 minutes on each side, appropriately 
yielded if anybody else shows up; and if nobody does, panel, 
that is not unusual. We have Floor debate occurring right now, 
and many members have meetings in their offices. So when you 
are having a hearing like this it is not uncommon to have a low 
presence. Members will come in and out as need be.
    We would like to welcome you here today. This is the first 
hearing in the 112th Congress for the Subcommittee on 
International Monetary Policy and Trade. This is, I believe, a 
very important hearing. We are going to be talking about the 
Export-Import Bank reauthorization. Even Federal Reserve 
Chairman Bernanke said that we need to sustain a period of 
strong job creation to establish true economic recovery, and I 
believe this is a place we need to look to. How do we increase 
imports in this country and become competitive globally?
    The Export-Import Bank effectively deals with about 175 
countries. We have to ask, how can the banks better compete 
with foreign export credit agencies to ensure U.S. companies 
are not operating at a disadvantage against their foreign 
competitors.
    And if you look at the guidelines we use on how we loan, 
U.S. loans are made, has 15 percent or less foreign content to 
receive full financial transaction funding. The U.K. has 80 
percent or less foreign content. Canada will make a loan if it 
benefits the country in some way. Australia has 50 percent or 
less foreign content. France has 40 percent or less EU content 
or 30 percent or less non-EU content. Germany has 40 percent or 
less EU content or 30 percent or less Japan, Switzerland, or 
Norway content. Italy, they will make a loan if it benefits 
them in some way. And Japan has 50 percent or less content.
    So when you look at what the Export-Import Bank does, they 
have the most stringent requirement as far as content of any 
bank that applies these standards. Yet, we need to look at what 
the Bank does and how they can operate in a better way. Fiscal 
soundness has always been a priority for the Export-Import 
Bank. Can the Bank policies and programs ensure that the Bank 
continues to fund in a fiscally sound fashion?
    Since 1934, the Bank has had a default rate of about 1.5 
percent. In the last 10 years, though, it has had a default 
rate of less than 1 percent, which is significant in this 
economy. Last year alone, they returned $351 million back to 
the Federal Treasury. So this is an organization that actually 
makes money for the Federal Government, rather than costing the 
Federal Government money.
    The Bank does not compete against private capital. If 
private capital is available, they are the first to utilize 
that. If it is not available, then the Bank provides liquidity 
when other sources of capital are not available.
    Currently, they fund about 1.8 percent of all U.S. exports, 
not a tremendous percent, but it is a significant percent if 
you are the one wanting to export products and you need the 
money. Small businesses benefit tremendously from this. Eighty-
seven percent of all the loans made by the Export-Import Bank 
are to small businesses. It only represents 20 percent of the 
funding level, but it is the majority of the type of loans they 
make.
    Is the Bank equipped to handle increased volumes in terms 
of staff and administration capability is a question we need to 
deal with and have answers to. Can direct selling, automated 
underwriting, or wholesale instead of retail expedite the 
process? Does the Bank need to reserve some of its excess 
receipts to make technology and other investments?
    Now, currently, about--of the $100 billion allowed to be 
lent by Ex-IM Bank, only $57 billion has been lent. A 5 percent 
reserve has been set up for those. What is the Bank's level of 
support for specific infrastructures, industries, science 
technologies, IT firms, and the service industries? And how 
does the Bank content requirements hinder such support?
    I think we need to look specifically at, does the 
retirement of 85 percent impact the ability of the Bank to 
lend? Does it have an impact on industry and companies who want 
to participate in the program, yet don't have the ability to 
participate in the program because of the content requirement?
    There are a significant amount of issues we do need to look 
at. There are issues that we want to have answers that are 
going to be needed to be provided and many questions that you 
might have for us and we might have for you. But we need to 
look at the goals of the Export-Import Bank, the opportunity to 
provide more jobs in this country, the opportunity to become 
more competitive globally, how we go about doing that, and we 
need to dispel some of the concerns that some feel that the 
process of the Export-Import Bank is similar to a GSE and such.
    The portfolio of the Export-Import Bank is tremendously 
diverse. Their default rate is minimal compared to what you see 
in the private sector. And had the Export-Import Bank not have 
been there in the last few years, it would have been 
problematic for many businesses to be able to continue in 
business and to be able to export goods, because liquidity was 
not there in the banking industry.
    So those are issues I would like to have addressed today in 
the hearing, and I will now yield to the ranking member.
    Mrs. McCarthy of New York. Thank you, Chairman Miller; and 
I appreciate your words.
    Let me first begin by saying I look forward to serving with 
my colleagues and working in a bipartisan manner on the issues 
before us today, as well as other important issues this 
subcommittee will be addressing in the future.
    The last several reauthorizations of the Export-Import Bank 
that this committee addressed were the result of hard work done 
by members on both sides of the aisle with a degree of 
cooperation that allowed us to send a bipartisan bill to the 
House Floor. I am confident this subcommittee will once again 
produce a collective reauthorization bill that allows the 
Export-Import Bank to continue being a vital tool that moves 
the economy forward and does create jobs for our country.
    The global financial crisis has resulted in strained access 
to credit and fewer trade financing opportunities for American 
exporters. Through the financial crisis, the Export-Import Bank 
played a crucial role in assuring that export companies were 
able to continue operating, which maintained U.S. competition 
in the global economy. The work of the Bank was done at no cost 
to American taxpayers as the Bank is self-sustaining, funding 
its programs and administration costs from the fees paid by the 
returns of its investments.
    The Bank is also a key contributor to the implementation of 
the President's national export initiative to double exports by 
the year 2015. A key way to achieve that goal is to support 
small businesses, which are the engine of job and economic 
growth, in their efforts to broaden their consumer base through 
exports. To that point, the Export-Import Bank has made 
progress in outreach to small businesses. Just this year, they 
developed new products and improved existing products to better 
serve the needs of our small businesses.
    The Bank has made progress in other areas that were 
addressed through the 2006 reauthorization legislation. 
However, there is more work to be done; and, as Chairman Miller 
has said, there are questions to be answered. We want to make 
sure that whatever work that has to be done is done to ensure 
that the Bank continues to support economical growth and job 
creation, as well as the U.S. global export market.
    I look forward to hearing the testimony from each of 
today's witnesses. I thank the witnesses for being here, 
especially on such a gloomy, rainy day. Hopefully, you all made 
it here all right; and I thank you for being here.
    Thank you, Mr. Chairman.
    Chairman Miller of California. Thank you.
    Vice Chairman Dold is recognized for 2\1/2\ minutes.
    Mr. Dold. Thank you, Mr. Chairman; and I want to welcome 
and thank all of our witness for your time and attention to 
this, what is a very important issue, the Export-Import Bank.
    The Export-Import Bank is a very important institution that 
ensures a more level playing field in a global marketplace. It 
helps create jobs in a country based on exports to other 
countries, which is an important national objective that both 
parties and the Administration can agree on. And the Export-
Import Bank does this at zero cost to the American taxpayer. In 
fact, the American taxpayer clearly benefits by the Export-
Import Bank returning billions of dollars directly to the 
United States Treasury and by ensuring that more Americans are 
working in the private sector.
    I hope that we can all agree that a prompt reauthorization 
is both beneficial and necessary. We also need to consider 
several other issues, including credit limits, context rules, 
and how we might encourage the Administration to appoint new 
directors to fill imminent board vacancies as they come up.
    I look forward to each of your testimonies, and I look 
forward to working with you. I yield back.
    Chairman Miller of California. Mr. McCotter is recognized 
for 2\1/2\ minutes.
    Pass? Okay.
    I would now like to introduce the witnesses:
    Ambassador Karan Bhatia joined General Electric Company in 
2007 as vice president and senior counsel for international law 
and policy. At GE, he oversees the company's engagement in 
public policy issues with government around the world and works 
to expand its presence in global markets. In November 2005, he 
was confirmed by the Senate to serve as Deputy U.S. Trade 
Representative overseeing U.S. trade policy in Asia and Africa.
    It is good to have you here today.
    Mr. David Ickert is vice president of finance of Air 
Tractor, a small business located in Olney, Texas, population 
3,500, that manufactures agricultural and forestry firefighting 
aircraft. Mr. Ickert is a graduate of Olney High School and 
Midwestern State University. He has a bachelor's degree in 
accounting and is a certified public accountant.
    Welcome.
    Mr. Kevin Law. In 2010, Mr. Law became president and CEO of 
Long Island Associates, which is New York State's largest 
business organization. Previously, Mr. Law was president and 
CEO of Long Island Power Authority, the second-largest public 
utility in the country with over 1.1 million customers. Prior 
to approval as president and CEO, Mr. Law served as LIPA 
trustee and was appointed by Governor Eliot Spitzer as chairman 
of the board beginning in 2007.
    Mr. Scott Scherer is senior vice president of Strategic 
Regulation Policy at Boeing Capital Corporation. He is also a 
member of the Aviation Working Group, a not-for-profit legal 
entity which proactively engages with the U.S. Export-Import 
Bank and other export credit agencies to ensure availability of 
adequate and reasonably priced financing for developed 
customers and regions.
    Welcome. Each of you will have 5 minutes.
    Mr. Ambassador, you are recognized for 5 minutes.

 STATEMENT OF KARAN BHATIA, VICE PRESIDENT AND SENIOR COUNSEL, 
                        GENERAL ELECTRIC

    Mr. Bhatia. Thank you very much, Chairman Miller, Ranking 
Member McCarthy, and members of the subcommittee. Thank you for 
convening the hearing today on this very important topic.
    Sovereign-backed export finance has a fundamental and 
growing impact on international commerce and U.S. exports. In 
the competition for global markets, American companies and 
workers are increasingly competing with foreign companies armed 
with substantial, attractive government-backed export finance 
packages.
    In this highly competitive world, the U.S. Ex-Im Bank plays 
a critical role in supporting American exports and American 
jobs. GE, my company, provides a case in point. In 2010, Ex-Im 
helped finance $2.7 billion in GE sales to international 
markets, supporting more than $3.3 billion in U.S. exports. 
These were products ranging from heavy duty gas turbines to 
Saudi Arabia, to aircraft engines going to India, to MRI 
machines going to Brazil and Ghana. These export sales have 
helped support thousands of U.S. jobs in GE facilities from 
California to Michigan, from New York to Illinois, and from 
thousands of small and medium-sized enterprises and other 
suppliers in every State of the United States.
    Ex-Im is ably led and staffed by a team of dedicated, 
hardworking, and creative public servants. Their contributions 
go beyond merely supporting U.S. exports and jobs. Ex-Im, in 
fact, contributes to the U.S. Treasury, as the chairman noted, 
generating a surplus of several billion dollars over the past 
decade.
    But notwithstanding these efforts, Ex-Im unfortunately 
remains among the world's least competitive export credit 
agencies. Ex-Im dramatically trails other ECAs in total funds 
authorized. Canada, for instance, a country less than a tenth 
the size of the United States, has more than triple the amount 
of export financing as the Ex-Im Bank. Japan has more than 5 
times the amount, and China has an estimated 11 times. 
Moreover, Ex-Im is forced to labor under restrictions and 
processes that lessen its attractiveness and discourage many 
U.S. companies from accessing it. Ultimately, these constraints 
cost American exports and American jobs.
    To improve the effectiveness of the U.S. export finance 
system, we urge the Congress to focus on four priorities: 
first, reauthorization of Ex-Im with greater lending authority 
and streamlined congressional notification process; second, 
eliminating regulatory restrictions that weaken Ex-Im's 
competitiveness, vis-a-vis other ECAs; third, vesting Ex-IM 
with a mandate to defend strategic markets for the United 
States; and fourth, improving Ex-Im's accessibility. With your 
permission, I will talk briefly about each of these.
    First and foremost, we urge that Congress fully reauthorize 
Ex-Im for a period of 6 years. In addition, we would urge that 
Ex-Im's total liability cap be increased from $100 billion to 
$200 billion. And it bears emphasizing that this increase in 
liability authority does not mean a $100 billion increase in 
total government spending. In fact, if history holds true, 
greater lending authority will, in fact, only result in an 
increase in their surplus, their return to the U.S. Treasury.
    Second, for U.S. exporters to be globally competitive, we 
need Ex-Im to be as flexible and nimble as its global 
competitors. To that end, we would urge reform of three Ex-Im 
policies that diminish Ex-Im's flexibility and weaken its 
competitiveness:
    Cargo preference requirements, Ex-Im's national content 
requirements that the chairman alluded to in his openings 
remarks and the economic impact test. I have addressed all 
three of these bureaucratic obstacles to American business in 
my written statement, but in the interest of time, I will limit 
my oral comments just to the first point, cargo preference 
requirements.
    Under a long-standing requirement, almost any long-term 
export financed by Ex-Im must be transported on a U.S.-
registered vessel. Congress imposed this requirement in the 
pre-World War II era to help build a U.S. merchant marine 
fleet. But both U.S. strategic requirements and the global 
shipping market have dramatically changed since that period, 
and today, there is an extremely limited number of U.S.-flag 
``break bulk'' vessels in operation, and the result is 
transportation costs that are so high for transporting on those 
vessels as to nullify the benefits of Ex-Im financing.
    So, accordingly, we would urge that those cargo preference 
requirements be eliminated or, at the very least, that the 
additional costs imposed by those requirements be offset by the 
government.
    That was point number two.
    Point number three is, since the financial crisis, other 
governments have become far more aggressive and creative in 
using government-supported financing to win market share around 
the world. They are deploying more resources, using more forms 
of financing, and operating in areas where Ex-Im traditionally 
has had very little activity. Moreover, such foreign government 
financing is increasingly destined for projects in the United 
States.
    Historically, Ex-Im has matched foreign ECA financing 
offers that are outside the OECD framework only in rare 
situations and has refrained from financing projects in the 
United States all together. It has made very sparse use of its 
Tied Aid War Chest, and Ex-Im traditionally has had relatively 
little activity in regions of the world that may pose 
commercial risk but also present significant commercial and 
strategic opportunities, including portions of the Middle East 
and Africa.
    So, accordingly, we would urge that Ex-Im be directed to 
match financing offered by foreign governments competing abroad 
or in the U.S. home market where such financing is inconsistent 
with the OECD arrangement or where investment financing is 
being offered to win market share from U.S. competitors; that 
it make increased use of its Tied Aid War Chest; and that it 
facilitate specialized programs in countries or regions where 
the United States has a strong national interest, like Iraq, 
Afghanistan, and sub-Saharan Africa.
    Fourth and finally, Ex-Im remains underutilized by key 
sectors of the U.S. economy, including SMEs, manufacturing 
companies that have repeated exports of smaller value items--
so-called flow businesses--and services providers. There are 
multiple reasons for this, including Ex-Im's largely 
undifferentiated processes for both large and small 
transactions, its rules governing U.S. content, and its 
reluctance to take less than dominant positions--
    Chairman Miller of California. The gentleman will need to 
conclude.
    Mr. Bhatia. Thank you.
    To facilitate access by SMEs and flow businesses, Ex-Im 
should deputize more commercial banks, community and State 
banks and others, while setting appropriate transaction costs 
and fee-sharing arrangements to facilitate cooperation.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Bhatia can be found on page 
32 of the appendix.]
    Chairman Miller of California. Thank you, sir.
    Mr. Scott Scherer.

   STATEMENT OF SCOTT SCHERER, SENIOR VICE PRESIDENT, BOEING 
                      CAPITAL CORPORATION

    Mr. Scherer. Chairman Miller, Ranking Member McCarthy, and 
members of the subcommittee, I am Scott Scherer, senior vice 
president, Boeing Capital Corporation, the financing arm of 
Boeing company. Thank you for this opportunity to testify on 
this important topic.
    I have an opening statement and request that my full 
written testimony be placed in the record.
    Chairman Miller of California. It will all be placed in the 
record, without objection. Thank you.
    Mr. Scherer. On behalf of Boeing's 160,000 employees, 
22,000 small, medium and large U.S. suppliers to Boeing 
throughout all 50 States, and the 1.2 million people working in 
our domestic supply chain, I am here to voice our strong 
support for the reauthorization of the Export-Import Bank of 
the United States.
    At a time of great debate over the role of government in 
our society, Ex-Im Bank stands out as the government 
institution that works and that provides real value to our 
Nation. The Bank's financial instruments help American 
companies, their workers, and their suppliers compete in the 
global economy and, in so doing, increase American exports, 
create and preserve export-related jobs, help stabilize our 
economy during periods of tight credit, like the one we just 
experienced, and otherwise contribute to economic growth across 
the United States. And because the Bank charges exposure fees 
to its borrowers, it is not only self-sustaining but 
consistently earns a profit for U.S. taxpayers. It is a 
government program that helps lower the deficit, something I am 
sure you don't hear all that often.
    On the issue of global competitiveness, the Bank plays a 
critical role. In the aerospace business, our chief competitor, 
Airbus, has three European export credit agencies supporting 
its sales. What's more, the competitive landscape for our 
industry is about to get a lot more crowded. Companies in 
Canada, Brazil, China, and Russia are developing large 
commercial airplanes to compete against Boeing; and all of them 
have government export credit agencies to support them. Without 
Ex-Im, Boeing and its extensive U.S. supply chain would be at a 
significant disadvantage in a market we forecast to be worth 
$3.6 trillion over the next 20 years.
    On the issue of U.S. exports and the jobs they support, 
there is no question that Ex-Im helps drive U.S. exports. In 
Fiscal Year 2010, Ex-Im financing supported a record $34.4 
billion in U.S. exports; and in calendar year 2010, Ex-Im 
financial guarantees supported sales of 161 Boeing commercial 
airplanes, roughly a third of all Boeing deliveries that year.
    Commerce Department figures show that aerospace exports 
support more than 770,000 U.S. jobs; and the aerospace sector 
each year produces a trade surplus, $53 billion in 2010, 
according to the Aerospace Industries Association. Those job 
and trade surplus figures are the highest of any U.S. 
manufacturing industry.
    I mentioned that Ex-Im supported one-third of our airplane 
deliveries last year. That was a higher percentage than we have 
seen historically because of abnormally tight commercial credit 
markets, which brings me to my next point, and that is the 
Bank's vital role in helping to stabilize our economy in such 
economic conditions.
    Ex-Im Bank helped stem at least some of the bleeding 
brought on by the financial crisis by shoring up exports in 
very tough economic times, just as it was designed to do. Since 
1992, according to the Bank, Ex-Im has returned roughly $5 
billion to the U.S. Treasury.
    The Bank has a strong, diverse loan portfolio that presents 
little risk to the U.S. government and American taxpayers, 
particularly true for its portfolio of airplane loan 
guarantees. To date, the Bank rated default on commercial 
airplane loan guarantees as de minimus.
    Mr. Chairman, and members of the subcommittee, we have 
several recommendations for your consideration but will focus 
briefly on three of them.
    First, we recommend that you consider raising the cap on 
allowable financing by the Bank from the current level of $100 
billion.
    Second, we recommend you consider lowering the 85 percent 
domestic content requirement for Ex-Im loans and loan 
guarantees. This foreign content rule does not adequately take 
into account 21st Century supply chains, which are global in 
nature. This is an important competitive issue for U.S. 
exporters because U.S. domestic content is, far and away, the 
highest requirement among the world's export credit agencies.
    Finally, we urge the subcommittee to press for resolution 
of a looming issue, and that is the vacancies on the Bank's 
current board. Ex-Im Bank needs a quorum of three members to 
approve transactions; and unless these vacancies are filled 
soon, the Bank will not have a quorum come July, when only the 
chairman will remain in office.
    In conclusion, I want to reiterate how well the Bank serves 
the American public, helping U.S. companies, large and small, 
compete in the global economy, driving U.S. exports, creating 
good-paying jobs and economic growth and doing so with a net 
return to U.S. taxpayers.
    Boeing, the Coalition for Employment Through Exports, and 
many other companies look forward to working with the Congress 
to reauthorize the Bank.
    Again, thank you, Mr. Chairman.
    [The prepared statement of Mr. Scherer can be found on page 
45 of the appendix.]
    Chairman Miller of California. Thank you for your 
presentation.
    Mr. Ickert, you are recognized for 5 minutes.

   STATEMENT OF DAVID ICKERT, VICE PRESIDENT OF FINANCE, AIR 
                         TRACTOR, INC.

    Mr. Ickert. Chairman Miller, Ranking Member McCarthy, and 
members of the subcommittee, thank you for allowing me to 
participate today.
    I am David Ickert, vice president of finance with Air 
Tractor. We are the other aircraft manufacturer on today's 
panel; and we are located in Olney, Texas.
    I have submitted written testimony which responds to the 
questions that we had, so I won't be redundant and go over a 
lot of those points.
    I would like to speak today about the experiences Air 
Tractor has had with Ex-Im and job creation, and these are 
experiences of a small business. I will emphasize that what I 
am about to say has nothing to do specifically with Air Tractor 
but more to do with what is being replicated by small 
businesses all over this country and the potential of small 
business exporters in exporting and working with Ex-Im. I think 
there is tremendous potential and Ex-Im Bank is vital to that 
community to realize the job creation potential that exists 
there.
    Air Tractor is a small business engaged in the manufacture 
and sale of agricultural airplanes--crop dusters, if you will--
and forestry firefighting planes. We have been in business 
since 1972, and we are now 100 percent ESOP-owned. We have one 
location, in Olney, Texas. We employ approximately 225 people. 
Olney is a small rural town 100 miles west of Ft. Worth, and 
200 miles east of Lubbock, with an approximate population of 
3,000.
    In 1994, we decided that we needed to look beyond the U.S. 
borders for our market. At that time, we had about 10 percent 
of our sales moving in the export market. We knew we needed a 
medium-term product--loan product to sell our airplanes on the 
international market. So after much searching and research, we 
discovered a couple of key partners. One is a commercial bank 
that we are still working with today--the same officers who 
have been wonderful to help us and been patient with us to 
bring us along in this--and the Export-Import Bank of the 
United States. Those two partners have helped us move forward 
in our quest to try and expand our international market.
    Since 1995, we have now completed over 80 medium-term 
transactions with the Bank. That first transaction in 1995 was 
two firefighting planes in Spain. For the calendar year 2010, 
we have completed 20 medium-term transactions with the Bank; 
and during this same period, from 1995 to 2010, we have seen 
our percentage of annual new plane sales and units move from 10 
percent in 1995 to 56 percent in 2010. And this included 14 
different countries.
    As I said, we have done business with Ex-Im for 15 years 
and have completed those 80 medium-term transactions, 80-plus. 
To date, we have never submitted a medium-term claim to Ex-Im. 
They are there for that, but we have never done that. So Ex-Im 
has received our medium-term credit premiums through the years, 
but they have never had to pay a claim. That is good business 
for Ex-Im, and it is good business for Air Tractor.
    I want to speak just a little bit about Olney, Texas. It is 
my hometown. It is a great place to live, and it is a great 
place to work, and it is a great place to raise your kids. 
However, when one thinks of originating export transactions, a 
small west Texas town doesn't really come to mind. But I will 
remind you we have 225 employees; and at 56 percent, we have 
over 100 people in Olney, Texas, who today owe their jobs to 
exporting.
    As I have described it before, Olney is three red lights 
and a Dairy Queen; and the significance of this is that if we 
can create jobs on Main Street Olney through small business 
exporting, it can be done in small businesses from California 
to New York. If we can do it in Olney, Texas, we can do it all 
over this country.
    So what I would have to say to you today is, just for small 
business exporting, for job creation through exports, which has 
a tremendous potential in this country, we need Ex-Im, and we 
urge the reauthorization of Ex-Im.
    Thank you.
    [The prepared statement of Mr. Ickert can be found on page 
37 of the appendix.]
    Chairman Miller of California. Thank you.
    It appears that you employ a large percentage of the adult 
population in your community. That is very impressive.
    Mr. Ickert. That is a true statement, yes, sir.
    Chairman Miller of California. I like that. My dad was from 
Sweet Home, Oregon, population 4,200.
    Mr. Law, you are recognized for 5 minutes.

   STATEMENT OF KEVIN S. LAW, PRESIDENT AND CHIEF EXECUTIVE 
             OFFICER, LONG ISLAND ASSOCIATION (LIA)

    Mr. Law. Thank you, Chairman Miller, Vice Chairman Dold, 
Ranking Member Carolyn McCarthy, and subcommittee members for 
the opportunity today to come and speak to you regarding the 
Export-Import Bank of the United States.
    My name is Kevin Law, and I am the president and CEO of the 
Long Island Association. The LIA is the largest business 
organization in the State of New York. Our membership includes 
thousands of businesses, both large and small; and we employ 
hundreds of thousands of employees. The LIA has been in 
existence for over 80 years; and our mission is to lead and 
unify the region and strengthen Long Island as a place to live, 
work, and do business.
    Long Island, like the rest of the Nation, has suffered 
through the recent recession and has been plagued by falling 
home values, high unemployment, and businesses closing their 
doors. The Long Island economy is very much a small-business-
driven economy. We have over 3 million people. If Nassau and 
Suffolk counties were a State, we would be bigger than 18 
States; and we are located right outside the City of New York.
    But 90 percent of our businesses are companies that employ 
20 people or less, and it is estimated that our exports from 
Long Island are valued at over $10 billion. Increasing the 
export capabilities of the manufacturing sector of our economy 
would certainly be a boost to companies exploring new markets.
    The LIA supports the reauthorization of the Export-Import 
Bank. I would like to thank Fred Hochberg, the chairman and the 
president of the Export-Import Bank, for helping many Long 
Island companies over the past few years.
    But, unfortunately, and despite the assistance from the 
good folks at the Bank to date, many smaller companies are 
still not aware of the Ex-Im or the services that they provide. 
Too often, small business owners are too caught up in the day-
to-day aspects of running their businesses to take the time to 
explore new opportunities to grow their business; and simply 
they are just not aware of all the various programs that are 
offered. And then when they do become aware, they get inundated 
with the overwhelming amount of paperwork required by some of 
these programs.
    So as the committee considers the reauthorization for the 
Bank, we feel it is important for you to not only consider ways 
for the Bank to be made more accessible to small businesses but 
to also streamline the application process so more small 
businesses can take advantage of the opportunities to expand 
into international markets.
    Additionally, we feel there needs to be better cooperation 
between the various Federal agencies that play a role in the 
export economy. This includes the U.S. Department of Commerce, 
the Small Business Administration, and the Department of State; 
and perhaps you can better utilize the services of 
organizations like the Long Island Association to get that 
message out for the Federal Government. The government doesn't 
always have to do everything, and so utilize organizations like 
us to get the word out about the good programs like the 
programs that Ex-Im administers.
    We also think that technology might be better used for 
small businesses in the application process. We have seen a 
rapid movement towards the digital economy, and we ask that the 
application process for small businesses be streamlined. 
Because, if we do that, I think we make it easier for small 
businesses, and that will generate greater participation.
    The Ex-Im Bank's global access for small business forums 
are prime examples of how to start that process. The goal of 
this program is to reach 5,000 small businesses across the 
country, with 20 such forums being held this year alone. I am 
happy to be working with Congresswoman Carolyn McCarthy for a 
forum to be held on Long Island on April 11th, and we are 
marketing that event to our membership so they can take 
advantage of what the Ex-Im has to offer.
    The recent announcement of Ex-Im Bank for the Supply Chain 
Financing Initiative is going to be very helpful to small 
businesses that supply U.S.-based corporate operations. By 
supplying competitively priced working capital finance to 
suppliers of U.S. exporters, this program will lower the cost 
to these suppliers and thereby strengthen the supply chain.
    An additional benefit of the supply is that it allows 
suppliers to get paid faster and decreases the receivables on 
their balance sheets. This is another tool in the Federal tool 
kit that we feel can be helpful to many Long Island small 
businesses, as well as small businesses across the country, and 
we look forward to working with Ex-Im to take advantage of 
this.
    Another area that we feel the committee should take a 
closer look at is military and defense items. A large number of 
smaller businesses on Long Island are involved in the defense 
industry. As many of you know, Long Island is the cradle of 
aviation and has a proud history in the air and space industry. 
Many of the goods and services produced by the defense industry 
sector can have better export applications, and we feel that 
any exclusion from the programs for defense-related industries 
should be revisited and amended.
    The Long Island Association and Ex-Im have similar goals of 
trying to create jobs and to grow the economy. To this end, we 
look forward to working with the Bank and bringing its valuable 
services to the small businesses on Long Island. And we look 
forward to working with you as well so we can all improve the 
business climate for not only Long Island and the State of New 
York, but for our country.
    So, Mr. Chairman, thank you for the opportunity to make 
some of these suggestions to the committee; and I thank our 
Congresswoman, Carolyn McCarthy, for the opportunity to be here 
today.
    [The prepared statement of Mr. Law can be found on page 42 
of the appendix.]
    Chairman Miller of California. That is three plugs you got. 
That is pretty good.
    Some great issues were raised. One was cargo preference. 
The Bank's charter does not specifically mandate the U.S.-flag 
vessels in connection with Ex-Im. That jurisdiction is with the 
Transportation and Infrastructure Committee. It is not our 
jurisdiction. I have talked to Chairman Mica regarding this 
issue, so it is not something we would debate or discuss in 
this committee because we have no purview over that issue. That 
is a separate committee altogether.
    But you have brought some great issues up. You said that 
Ex-Im is the least competitive--or we are--with our global 
competitors. You talked about regulatory restrictions that are 
placed over your requirements that you have to comply with with 
them. And you talked about raising the lending authority from 
$100 billion to $200 billion. And content was another concern.
    One question I had was on the lending authority. They have 
authority for $100 billion, but they are only at about $75 
billion right now. So there is an additional $25 billion in 
lending authority available for them to use.
    The other content requirement is we require 15 percent not 
to exceed in foreign involvement. What changes would you like 
to see made in the content, for example? If that was modified 
in some fashion, would it change the way you are doing business 
as it applies to Ex-Im? Would you then modify the structure of 
your product where it did include a greater foreign content if 
we restructured that in some fashion?
    Mr. Bhatia. Mr. Chairman, I guess one way to think about 
the content issue is, how does it currently hurt us? Okay? How 
does it currently hurt American jobs? And I think it hurts us 
in probably three ways.
    So the first is there are some products that we manufacture 
that simply by the nature of the way the inputs come in we 
can't get up to that threshold. We are at maybe 65, 68 percent 
U.S. content. And as a result of that, Ex-Im financing, 
complete financing, is just not available to us. So we will not 
even apply in those cases.
    Chairman Miller of California. But it wouldn't change your 
normal product that had 85 percent. It wouldn't change that 
matrix for us, would it?
    Mr. Bhatia. No. On that point, no.
    But the second point to be made, I think, is, by virtue of 
having a very high U.S. content requirement, much higher than 
our foreign competitors, for instance, they are able to both 
produce goods at a--they are able to be more efficient in terms 
of how they manufacture the goods.
    And then the other issue is, remember, they are able to get 
full financing. Take the U.K., for example. Twenty-five 
percent, let's say, U.K. content. They are able to get 85 
percent financing for that. If we were to manufacture something 
with 60, 68 percent, we would only be able to get up to 68 
percent financing on that. So there is a cost difference, there 
is a financing difference, there is a pricing difference, and 
there is an availability difference.
    To get to your point about what would we recommend, I think 
what we would recommend, first and foremost, is that the U.S. 
content requirement be reduced to the OECD average, which, at 
the moment, the next highest to the United States is 50 
percent, and many are below that.
    Chairman Miller of California. So by us changing the 
standards, it wouldn't put you in a position where you would 
lower your percentage automatically?
    Mr. Bhatia. No. No. To the contrary. I think what it would 
allow us to do is seek export financing from the United States, 
be more competitive, be able to compete abroad, and retain the 
production out of the United States.
    Right now, to be competitive, we are having to manufacture 
and seek export financing from other institutions around the 
world. So, for instance, we could export--there is a wind 
turbine opportunity, let's say, to sell to Kenya. We can export 
from two places. We can export out of the United States, out of 
our Greenville, South Carolina, facility or we can export out 
of Germany and utilize German export financing.
    Chairman Miller of California. So if we changed them, you 
think it would increase American jobs.
    Mr. Bhatia. I can tell you it would increase American jobs.
    Chairman Miller of California. Mr. Scherer, how would you 
apply that to Boeing?
    Mr. Scherer. We believe--Boeing believes that the content 
requirement of 85 percent is too high. We believe that we could 
probably live with a number in the 70 range--70 percent range, 
probably, as we currently produce our airplanes.
    But, to Karan's point, he is right to the extent that we 
have increases in foreign content, we have to go outside. We 
have to obtain co-financing from other export credit agencies 
to ensure that we can fill the gap.
    But, again, this is a competitive world that we are in. We 
have--oftentimes, in order to be able to sell airplanes, we are 
required to make offset requirements. We have cases where we 
just don't--we just can't get to that 85 percent number.
    Having said that, 82 percent of all the jobs and our 
procurement is here in the United States. But we have some 
aircraft that are below the 85, and it is kind of an awkward 
situation that we have with our customers who, for example, are 
acquiring Boeing 737 aircraft which maybe has an 82 percent 
content and we say, sorry, we can only give you 82 percent, not 
85 percent. But when they buy their Airbus airplane, which has, 
frankly, a lot of U.S. content in it, they can still get 85 
percent financing.
    Chairman Miller of California. So it is putting you at a 
disadvantage with competitors.
    Mr. Scherer. It is putting us at a disadvantage, yes.
    Chairman Miller of California. Mr. Ickert, I would like to 
hear if the small guy you said you are has an opinion on that.
    Mr. Ickert. We have a unique situation. It impacts us, 
also.
    Now there is a work-around, if you will, in our situation. 
Most everything that we have is U.S. content and materials in 
our aircraft, except for the engine. The engine comes out of 
Canada. Luckily, Ex-Im and EDC have a co-finance agreement that 
allows us--they process--we process through Ex-Im, Ex-Im sends 
it on to EDC, and EDC picks up their part of the coverage.
    Chairman Miller of California. So you have an out that they 
don't.
    Mr. Ickert. That is exactly right. Yes, sir. We have an 
out.
    Chairman Miller of California. If it wasn't for that, how 
would it impact you?
    Mr. Ickert. If I did not have the out, it would impact us 
dramatically. We couldn't use Ex-Im financing because that 
engine--
    Chairman Miller of California. It would have a dramatic 
impact on your business personally.
    Mr. Ickert. That engine runs about 35 to 40 percent of our 
value. So I couldn't access Ex-Im without the co-finance 
agreement.
    Chairman Miller of California. Mr. Law, do you have a 
comment on that?
    Okay. I have gone over my time. Mrs. McCarthy is recognized 
for 5 minutes.
    Mrs. McCarthy of New York. Thank you, Mr. Chairman; and, 
again, I thank everybody for their testimony.
    Mr. Law, we understand and we know that the Long Island 
Association is the largest association for small businesses and 
medium-sized businesses on Long Island and New York State. When 
you talk about how to expand it, is that something that should 
be put into the reauthorization? Is that something that we 
should be encouraging associations to basically say that we 
should be growing the advertisement part?
    I went to you about--what, 2 months ago, I guess--because I 
wanted to have an educational event for our small businesses on 
exporting. So I knew to go to you mainly because of the work 
that we have worked together on through the association. But 
how do you get that message out into other areas? Mr. Ickert 
basically found a small lender. How would you see something 
like that being set up?
    Mr. Law. I think organizations like the Long Island 
Association that exist throughout the country could be helpful 
to the Federal Government in promoting your programs. I think 
sometimes--and I have been in and out of the public sector and 
the private sector and sometimes--I remember my tours with the 
public sector. You get so close to it and you think everybody 
is aware of everything that you are doing, and they are not. 
Because people are out there working really hard and long to 
run their businesses, and they don't see everything or perhaps 
they don't pay attention to everything.
    So I think organizations like ours, where we are maybe on 
the street with them more often, we could be educating them 
about the opportunities for these programs. And so I think 
there are roles for organizations like ours to play with Ex-Im, 
the Small Business Administration, and the Department of 
Commerce to help get the good programs that you and this 
committee authorized and to help get that word out there. So I 
think organizations like ours could help the Federal Government 
get that word out.
    Mrs. McCarthy of New York. Thank you.
    Mr. Ickert, when you were speaking, you said you get your 
engines from Canada. And I am just curious. Is that because 
that is the best engine for the particular planes that you 
make, or was it a better price or--
    Mr. Ickert. For the engine, for the plane that we produce, 
it is the best engine to match up with the airframe that we 
produce.
    Mrs. McCarthy of New York. Okay. That is fair. I was just 
curious about that.
    We talk about large corporations, but yet we are still 
talking about small businesses here, and certainly we have 
probably two of the largest corporations in this country, and 
yet small businesses are a very large part of your success in 
business. And I was just wondering if you could explain that 
and go a little bit deeper on the 85 percent content. Would 
that have any adverse effect on any of our businesses here in 
this country?
    Either one of you or both of you?
    Mr. Bhatia. I will go first, Congresswoman.
    To your first point, small businesses are absolutely 
essential. Small American businesses, small and medium-sized 
businesses are absolutely essential to our ability to produce 
the goods that we need to be able to compete around the world.
    We have a supply chain of tens of thousands of American 
SMEs, and one way we like to think of ourselves at GE is 
actually as the platform for SMEs to export around the world. 
Many of our suppliers only can access these far-flung markets 
around the world by basically supplying goods and services into 
an entity like GE and being able to sell around the world. So 
we see ourselves as very much tied to SMEs, small businesses, 
our suppliers.
    As to your second point, again, I go back to my comments to 
the chairman. I think that high content requirements at the 
levels that we have them preclude us from being able to access 
critical Ex-Im financing to allow us to compete in 
international markets and thereby are preventing us, slowing us 
down from creating more jobs for SMEs for our own employees. So 
I guess that is my response.
    Mrs. McCarthy of New York. Mr. Scherer?
    Mr. Scherer. I would echo much of what Mr. Bhatia 
indicated.
    We have some brochures here that we would be happy to leave 
with you that we refer to as our invisible exporters.
    But as I had indicated in my oral testimony, we have 22,000 
suppliers in the Boeing company and 2,200 of those are small 
business suppliers to the Boeing commercial airplane company. 
Clearly, while we are a ``large'' company, we need to be 
mindful of the fact that we are 160,000 individuals, a lot of 
different types of people--scientists, engineers, mechanics, 
machinists, and our suppliers who help build these very 
technologically advanced airplanes.
    But, we have to have export credit support that is 
competitive; and to the extent that we don't, it is going to 
inhibit our ability to compete effectively.
    Mrs. McCarthy of New York. Thank you. My time is up.
    Chairman Miller of California. Thank you.
    Vice Chairman Dold is recognized for 5 minutes.
    Mr. Dold. Thank you, Mr. Chairman; and, again, I want to 
thank you all for coming this afternoon and for coming with 
some suggestions.
    And if I can just go right to Ambassador Bhatia, in a 
recent GE transaction to sell, I think, locomotives to 
Pakistan, the Ex-Im Bank matched financing terms that was 
provided, I think, by China. And I was just wondering, how did 
the transaction actually play out? Can you give me an idea of 
whether you think this is a model for future transactions going 
forward?
    Mr. Bhatia. Thanks, Congressman.
    Yes, this is an opportunity that actually remains still 
playing out. So Pakistan is in desperate need of new 
locomotives.
    I would note, as an aside, it is not only an export 
opportunity for us, but it is also an opportunity to strengthen 
Pakistan's economy, allow goods and cargo to flow more 
effectively, thereby strengthening the economy and hopefully 
addressing some of the other challenges that exist in that 
country.
    We went in to bid on it. A Chinese company came in, backed 
by extremely aggressive concessionary financing; and the 
Pakistani government effectively said to us, if you can't match 
that, you are not going to be selected; you are not going to be 
competing.
    We went to Ex-Im, and Ex-Im--and I should note that China 
is outside of the OECD which prescribes certain rules. So we 
went to Ex-Im. Ex-Im stepped forward with an offer to match 
what China was doing. As a result of that, we were selected.
    Now, there are some legal processes going on in Pakistan 
today. The tender is going to be reissued, and we trust and 
hope that Ex-Im will step back up with support again. We are 
confident that at the end of the day, with Ex-Im's support, we 
will win that bid.
    Mr. Dold. If I can just follow up, also, you talked before 
about the content requirement and how if that was dropped down, 
you would like to see it down to be an average, I am guessing, 
probably around 50 percent. We see Mr. Scherer saying that they 
would be able to live with something around 70 percent. Is 
there some sort of a marrying in between, or is that something 
we are just going to have to kind of take a better look at?
    Mr. Bhatia. I think we would say we would like to see Ex-Im 
become globally competitive. To be globally competitive, we 
think we need to get those contents requirements down to 
roughly what the OECD average is. If it were to be done in 
certain steps, perhaps going down to 70 and then moving forward 
to an OECD average, I think that would be something that we 
would be grateful for.
    Mr. Dold. And obviously making Ex-Im more globally 
competitive you said absolutely was going to be able to create 
American jobs which, obviously, from your corporation, that 
would be one way to do it.
    You also highlighted some other regulatory burdens that 
were going to be impacting you and I assume the rest of you as 
well. Can you talk to me for a second about the economic impact 
test? Is that costing you jobs here in the United States right 
now or can you shed a little bit more light on that?
    Mr. Bhatia. Sure. The economic impact test, Congressman, is 
a basic principle, is a requirement that Ex-Im puts in place 
which basically results in Ex-Im being unwilling to lend to 
projects where the export, the U.S. export, could result in 
augmenting or strengthening the production of a foreign product 
that may come back into the United States in some form and 
potentially compete with a U.S. product.
    The problem with this is what it ends up doing is creating 
a very complex, very politicized, and ultimately, we think, 
unproductive equation whereby large exports, potential exports 
that would potentially support thousands of U.S. jobs abroad 
end up not happening because Ex-Im financing is unavailable 
because there may be a very small number of foreign products 
that would come back into the United States. So, from our 
perspective, that is simply a balance of the benefits test, and 
we think it should weigh in favor of the maximum number of U.S. 
jobs.
    Mr. Dold. Thank you.
    Mr. Ickert, if I can--I just have a very short period of 
time. How many countries do you currently export to right now?
    Mr. Ickert. In 2010, we exported to 14 different countries 
during that calendar year. If you add--I have not sat down and 
added them together, but 20 plus. But 14 in 2010.
    Mr. Dold. And were any private entities, private financing 
options available to you, or was Ex-Im basically your only 
financing option?
    Mr. Ickert. Some of those countries were cash deals, so we 
didn't have to access financing. Our customers in those 
countries did. Where we have accessed Ex-Im, in most of those 
cases we had no private opportunity for financing; and without 
Ex-Im participation those sales would not have been made.
    Mr. Dold. Great. Thank you.
    And I didn't want to let the time go without at least 
bringing the hometown company Boeing into this. You have 
outlined a couple of items here in terms of your priorities. 
And I see my time is up. Can you just give me, out of your list 
of three here, what is your top priority? What is the one thing 
if we could get it done that you would want to see happen here 
from the committee?
    Mr. Scherer. The main thing is to get the Bank 
reauthorized, obviously.
    There is an emerging issue I would like to raise, because 
Ex-Im Bank does a phenomenal job on the international front. 
The transportation division team there, the work they have 
done, what they have been able to do with respect to the surge 
in demand to support transactions during the financial crisis 
has been unparalleled. But what I am concerned about is a 
situation now.
    We just negotiated a new aircraft sector understanding 
under the auspices of the OECD which governs the rules of 
export credit, and there is a provision in there dealing with 
the home market. And there is a home market restriction that 
has operated pretty well between Boeing and Airbus whereby the 
U.S., France, Germany, and the U.K. don't finance in each 
others' markets or in their own markets. However, with Brazil 
and Canada coming into the new aircraft sector understanding, 
and now with Canada producing the new C series aircraft, which 
competes head to head against the Boeing 737 family of 
aircraft, as well as the Airbus A320 family, the Export 
Development Corporation of Canada will be providing export 
credit financing support into the United States.
    Our understanding is that, when agreement has been made, 
the United States could have C series matching. However, we do 
not currently have a policy response to match. And that is 
something I think that is critical, that we find a way to 
ensure that should happen.
    Chairman Miller of California. We are having discussions 
with Treasury right now on that issue for you.
    Mr. Scherer. Thank you.
    Mr. Dold. Thank you all.
    Chairman Miller of California. Also, vacancies on the board 
were mentioned. We are working with our colleagues on 
appropriate letters encouraging that those vacancies be filled.
    Mr. Perlmutter is recognized for 5 minutes.
    Is he gone?
    Gwen Moore, you are recognized for 5 minutes. You moved up.
    Ms. Moore. Thank you so much. I am so sorry that I missed a 
lot of the testimony of this distinguished panel. So if I ask 
questions that have already been addressed in your testimony or 
other places, please forgive me for that.
    I was really interested in a further discussion of the 
national content requirements. What might you all say about the 
revision of the national content requirements perhaps 
contributing to a greater trade imbalance if we were to revise 
this? Not only with content in terms of those percentages but 
in terms of products and services and to provide services to 
some of the CAFTA countries. What argument would we be able to 
make that this wouldn't contribute to an already onerous trade 
imbalance?
    Mr. Bhatia. Congresswoman, I am happy to take a stab at 
that.
    Let me sort of give you a very concrete, tangible example 
perhaps. We produce steam turbines out of our facility in 
Schenectady, New York. These are substantial exports for the 
United States when we can export them, multi-million dollar 
exports. Each turbine supports hundreds of U.S. jobs.
    Right now, those steam turbines, by virtue of the nature of 
the inputs into it, even if we maximize our U.S. content into 
it, we probably get up to 68, 69 percent. So the maximum 
financing we can get from Ex-Im Bank for that would be 68, 69 
percent. The remainder of that either has to be found in the 
private markets or has to be found from the buyer themselves.
    Ms. Moore. I am sorry, just because the other 31 percent of 
the components are from other countries?
    Mr. Bhatia. They could be raw materials that we don't have 
in this country. They can be things that are specialized, 
produced somewhere else. This is highly sophisticated 
production, so it involves a global supply chain.
    Ms. Moore. Why would you also object to the economic impact 
test? Maybe we could revise that so there could be an 
explanation that rubber or whatever is not available in this 
country, nobody grows it, and that is why the content is lower. 
Why do you then object to the economic impact test, say let 
those levels rise? Just simply explain why it doesn't meet 
those thresholds.
    Mr. Bhatia. I think, in some ways, they are comparable. In 
both cases, by virtue of the requirements that are put into 
place, we discourage--we preclude U.S. companies from accessing 
Ex-Im financing. It is vital for us to be competitive abroad. 
Because our competitors, be they from China or from other 
countries around the world, have their government export 
financing come into play.
    So whether it is content requirements that only limit our 
ability to access a certain amount of financing or make it 
unqualified altogether, or economic impact tests that may 
prevent us from accessing the financing altogether, that is the 
reason.
    Ms. Moore. I wouldn't want to get into a race to the bottom 
on that.
    Can I ask you one other question and maybe the other folks?
    It is hard not to notice that we have the largest 
corporations here, Boeing and GE, and I am really happy about 
the economic activity in Wisconsin with GE. But how do you meet 
the small business requirements? How do small businesses, say 
in Wisconsin or anywhere else, really import from the Export-
Import Bank, small businesses, and to what extent do any of the 
credit unions or small banks get an opportunity to facilitate 
export-import banking, identifying customers and so on?
    Mr. Ickert. Congresswoman, I will take a shot at that from 
the standpoint, as I pointed out, I am from Olney, Texas, 
population 3,000. We use the Export-Import Bank extensively for 
medium-term transactions. I have probably used it for over 80 
transactions over our history, and that supports--in 2010, we 
had over 56 percent of our product being sold outside of the 
United States. So that supports 100 jobs in Olney, Texas. That 
may not sound like a lot, but when you replicate that across 
this country, the potential is tremendous. And through the 
Export-Import Bank small businesses can do that, and we can 
replicate that. I think that is why it is very important that 
we look to the small business activity of the Bank. It 
contributes in Olney, Texas.
    Ms. Moore. Thank you. I yield back.
    Chairman Miller of California. Just to clarify, the banks--
Export-Import does not compete against private banks. They are 
not allowed to. If there is a private bank available, they have 
to use their funds first. They only step in if those private 
dollars are not available. That is why we had the small 
business guy here to testify to that.
    Mr. McCotter, you are recognized for 5 minutes.
    Mr. McCotter. Thank you, Mr. Chairman.
    First, I just want to make sure it is the jurisdiction of 
the Transportation Committee to deal with cargo preference. Was 
that your statement earlier? Just nod.
    Chairman Miller of California. I was conversing.
    Mr. McCotter. You made the statement earlier that the 
Transportation Committee would deal with the issue of cargo 
preference, not us.
    Chairman Miller of California. Mr. Mica and I talked about 
that. It is their jurisdiction, not our jurisdiction.
    Mr. McCotter. I appreciate that. I just wanted to be clear.
    I suppose, Mr. Bhatia, let me ask you, or perhaps Mr. 
Scherer from Boeing, if you lowered the domestic content 
requirement--let's just be theoretical about this. If lowering 
is good, isn't eliminating it altogether even better? Wouldn't 
you make even more money doing that?
    Mr. Scherer. It is an interesting question. I certainly 
wouldn't propose that. It would sort of give rise to the 
reason--what is the purpose? What is the reason? There has to 
be a content reason. There has to be something that is going to 
support the industry domiciled in a particular country. It 
would seem to make the most sense.
    I think what we have here is a situation of unintended 
consequences, though, of having content levels so high that in 
fact it causes us to be uncompetitive.
    Mr. McCotter. And then the number, the percentage that you 
believe is the optimal percentage for the next 6 years, or 
however long it may be reauthorized. You are asking for the 
change from ``X'' to ``Y.'' The ``Y'' that you are proposing is 
now the optimal number for domestic content percentage.
    Mr. Scherer. This is something we can discuss in terms of 
what the appropriate number would be. I do recall in my history 
of working at the Boeing company that one time back in the 
early and mid-1980s, the content requirement was 97 percent; 
and it was--trust me--a huge problem.
    Mr. McCotter. If I can, on that point, I can understand 
that. Because growing up around Detroit in the 1980s, we used 
to have a whole lot more manufacturing than we do now, and the 
number was put down, I suppose, as a result of that. I am sure 
it had no contributory effect to that.
    My question then is not when you take not the major company 
but, say, the small-scale suppliers and the contract for those 
inputs into the eventual product are outsourced, is that not a 
cost-benefit determination by the corporation to do that?
    Mr. Scherer. Absolutely.
    Mr. McCotter. Then would not the decision whether to have 
the right domestic content in your product you seek Export-
Import financing for be a cost-benefit analysis as well that 
would be put into I think a consideration of whether the 
smaller suppliers are outsourced or not for the higher figure?
    Mr. Scherer. Certainly.
    Mr. McCotter. But if we lower it, that would lower the 
cost-benefit analysis and potentially lead it to a greater 
favor on the scale towards more offshore sources of components 
for our products.
    Mr. Scherer. Not necessarily.
    Mr. McCotter. It would. Whether you decide to follow it or 
whether it has a maximal impact on the decision, it will have 
some relationship to the cost-benefit analysis, because it will 
be easier to do it with a lower requirement.
    Mr. Scherer. I would submit that the--look, the Chinese 
right now are building a new airplane.
    Mr. McCotter. The Communist Chinese, yes, I know.
    Mr. Scherer. And they are sourcing a lot of their 
components for that aircraft in the United States. But the U.S. 
Ex-Im Bank isn't going to be supporting the financing of that 
aircraft. It is going to be the Chinese Export-Import Bank.
    Mr. McCotter. It is a mercantilist predatory trading 
partner with which we run a massive deficit. I am aware of 
that.
    I am concerned now with what is in front of us. Would it 
not make it easier to seek outside components from offshore if 
we lower that requirement, or at least within the cost-benefit 
analysis?
    Mr. Scherer. As far as the Boeing company is concerned, I 
don't think so, and the reason for that is because of the terms 
of the aircraft sector understanding. Under the issue from a 
pure cost perspective, the Ex-Im Bank financing is not 
subsidized. It is very close to market terms. So, from a cost 
perspective, no.
    The issue for us is availability of the financing and 
ensuring that we have a comprehensive and competitive financing 
package to ensure that we have a level playing field. We are 
competing against Airbus. We are going to be competing against 
the CSeries aircraft, the Bombardier, and so on.
    Mr. McCotter. I appreciate that from Boeing, anyway.
    I know my time is up. I have just one last question.
    Mr. Bhatia, under your number one recommendations--I want 
to see if I have this in a nutshell, because this place is a 
nuthouse--you want more liability, you want to be able to incur 
more liability by raising the cap, and you want to report less, 
which will be less congressional oversight, right?
    Mr. Bhatia. I think what I would say, on your first point, 
yes. I think there should be more liability authorized, because 
the Bank is running up against the cap. As far as less 
congressional oversight, no, I would not say that, Congressman. 
I would say that at the moment that number has not been revised 
for years, potentially decades, to adjust for inflation.
    Mr. McCotter. With the chairman's indulgence, without 
objection, let me follow up.
    It says, in addition, we are raising the statutory 
threshold for congressional notification from $100 million to 
$400 million and adjust for inflation, so that you would be 
required less--
    Mr. Bhatia. For notifications, yes, absolutely. What I 
meant was the committee would obviously continue to have 
jurisdiction, just less notification. Yes.
    Chairman Miller of California. We will have a second round 
of questions now. We have plenty of time.
    Just so I clearly understand, there is nothing in Ex-Im 
Bank's charter that restricts them to 85 percent. This is a 
self-imposed number that they use, so it is their discretion if 
they choose to use it. But they don't choose to use it.
    What would your opinion be if we encouraged some form of a 
waiver application you could use to Ex-Im, that under 
circumstances where there was no other course than to use ``X'' 
amount of foreign materials or whatever within a product, that 
you could receive a waiver for that? How would that work?
    Like you said on the 737, you can't get it above 82 
percent. If you could justify that. Or going to 60 percent. 
Would that be workable for you in your industries?
    Mr. Bhatia. I think I would say, Mr. Chairman, I think it 
would depend heavily on what the pattern of dealing was, right, 
what the expectation was.
    The reality is, we go into deals sort of having a sense of 
what the financing package may be, and if our competitors are 
going into deals and saying we know we can get you 85 percent, 
right, we have ``X'' percent local content. If it depends upon 
a waiver process that inevitably in the course of things gets, 
you know, tugs of war and political influence, that becomes 
very difficult for businesses to go in and be credible on.
    Chairman Miller of California. When the Bank is assessing 
risk and those kind of factors, what paperwork does the Bank 
require for you to provide for them to assess that risk and 
what level of engagement is there for you and the Bank?
    Mr. Bhatia. They certainly evaluate them. There is an 
entire application process that goes where they would look at 
the commercial risk and the flow of funds and so forth. There 
is also a risk-analysis process that it undertakes with respect 
to the country at issue.
    So I don't know--does that answer your question?
    Chairman Miller of California. In your judgment, what could 
Ex-Im Bank do to support and encourage more exports but not do 
it in a fashion that encourages you to use a higher percentage 
of outside products within your manufacturing? I guess Mr. 
McCotter has a concern. If we do something to reduce standards, 
is it going to encourage you that maybe there is a cheaper way 
to produce your product using more foreign goods but you know 
you could still qualify? Is there some way we could circumvent 
that?
    Mr. Bhatia. To get to Congressman McCotter's issue, yes, 
the reality is that if you lower the foreign content, if you 
lower the U.S. content standards, you are going to enable and 
permit U.S. companies to source globally in a more efficient 
manner. But the consequence of that is going to be more U.S. 
exports. The consequence across the board will be more U.S. 
exports; and, as a result, you are going to have dramatically 
more U.S. jobs created.
    Chairman Miller of California. You are saying, even if you 
used a higher content, the jobs in this country would increase?
    Mr. Bhatia. Would increase, yes. The reality is that Ex-Im 
is so limited, it is so marginalized effectively in terms of 
international ECAs right now, by virtue of its content 
requirements, cargo requirements, a variety of these other 
requirements, that we don't have a tool. When we are competing 
with the Chinese, when we are competing with the Brazilians, 
when we are competing around the world to try and create U.S. 
exports and U.S. jobs, it is simply not a viable tool. So what 
we are saying is bring it into line with the OECD average, with 
the OECD requirements, thereby giving U.S. businesses and 
workers a chance to compete internationally.
    Chairman Miller of California. Let's assume for a question 
point that we did something like that, and let's make an 
assumption that we increased it to $200 billion rather than 
$100 billion. What benefit would that be to American workers 
and jobs?
    Mr. Bhatia. Going from $100 to $200 billion?
    Chairman Miller of California. And modifying the--
    Mr. Bhatia. I can't extrapolate. I can just give you our 
examples.
    Chairman Miller of California. Would it increase your 
ability to manufacture?
    Mr. Bhatia. Last year, to take as an example--let me give 
you two examples. Our gas turbine power plant in Greenville, 
South Carolina, a very large facility, 85 percent of our 
products exported out of Greenville was for global markets, was 
for international markets. Out of our aircraft engine facility 
in Ohio, the number was somewhere between 78 and 80 percent of 
production was for exports. But U.S. jobs are being sustained 
by international markets. That is the reality, and that is what 
we are seeing happening going forward.
    Chairman Miller of California. Increasing the leverage they 
could have as far as loans would not impact American jobs?
    Mr. Bhatia. No. I see this being key to us being able to 
sustain U.S. economic growth and U.S. job growth.
    Chairman Miller of California. Mr. Scherer, would you 
agree?
    Mr. Scherer. I would agree 100 percent, and I would like to 
give an example.
    Aircraft in particular are very high-value capital goods, 
and over 80 percent of the aircraft that we produce are 
exported outside the United States. And many countries--many 
governments and countries, they are looking at their trade 
balance as well, they are looking at their acquisitions, they 
are looking at their jobs programs and saying, look, if we are 
going to spend $2 billion on a fleet of Boeing airplanes, then 
we want you to source some of that work in our country. We want 
you to buy some components and parts and so forth from us.
    They tell this to the other competitors, such as Airbus, 
and it gets to a point where it is a serious competitive issue 
for us. And if we don't, if we aren't able to address 
appropriately the jobs issue for a particular customer, we are 
not going to win the business. And in fact, we have lost 
transactions because we weren't prepared to go as far as a 
particular customer wanted us to go. This is the business 
reality out there.
    I guess the point I would make is 70 percent of something 
is better than 100 percent of nothing.
    Chairman Miller of California. If you give me something in 
writing based on what your assumptions are today that would be 
more specific, I would appreciate that.
    Ranking Member McCarthy, you are recognized for 5 minutes.
    Mrs. McCarthy of New York. Thank you.
    Mr. Law, I want to come back to you on small businesses and 
what we can do with them. I believe in your testimony you had 
talked about some of the smaller companies saying that to apply 
for the Export Bank, it was too complicated, they didn't have 
the time. Do you have any other recommendations that you might 
think the committee should be thinking about as we go through 
reauthorization?
    Mr. Law. I think the ideas of having the forums are a 
terrific idea. I think, again, utilizing business 
organizations, chambers of commerce to get that information out 
to the small businesses is a key. And anything we could do to 
streamline the application and do it all on the Internet, Ex-
Im's Internet, I think would be worthwhile and encourage 
participation in the program.
    Mrs. McCarthy of New York. I think somewhere in your 
testimony, which I kind of found interesting, was that maybe 
there may be a possibility through the Bank, they would have 
people dealing just with first-time applicants.
    I know, Mr. Ickert, you work exclusively with the Bank so 
you know how the forms go and everything right now. But for 
many people who have never done this before and which we are 
going to encourage to increase, would having someone who just 
specializes in people applying for the first time, would that 
help the small businesses? Do you think that would have helped 
you when you first applied?
    Mr. Ickert. Yes, ma'am, I do. I think also looking at 
first-time users of the Bank as to whether they are successful 
or not successful, the Bank being able to follow up and see 
what frustrations may have been there, to better understand, 
decide from the small business to address procedures that could 
address those later.
    But there are difficulties. They are difficult. And I found 
that having a bank that has been very helpful to me--as I said 
in my testimony, they have been very patient with me. Ex-Im 
Bank has been very patient with me. It requires some patience 
for new, first-time users. It is not necessarily a user 
friendly--it is not bad, but it has gotten better in the last 
few years, but it is still a daunting process.
    Mrs. McCarthy of New York. That is something we will work 
on.
    Mr. Law, do you have anything to add to that?
    Mr. Law. No. I would agree with what Mr. Ickert said. I 
think Ex-Im has a lot of terrific people working there, and 
they do try to be helpful, but, like with any organization, 
there are always things you can improve upon. That is one idea.
    Mrs. McCarthy of New York. Thank you, Mr. Chairman.
    Chairman Miller of California. Mr. McCotter, you are 
recognized for 5 minutes.
    Mr. McCotter. Thanks. Just very quickly.
    Again, I just want to be clear. I think you kind of hit it 
when you talked to the chairman. When you lower that content 
requirement, your contention is that even if there is 
outsourcing of jobs here in the United States and the cost of 
the social safety net, the upheaval in their lives, somehow 
there will still be a net increase in jobs for the United 
States. Right?
    Mr. Bhatia. Yes.
    Mr. McCotter. Because it is a global economy and we have to 
find the cheapest supply lines, right?
    Mr. Bhatia. Right.
    Mr. McCotter. So wouldn't zero domestic content then 
maximize American jobs under the Export-Import Bank's mission?
    Mr. Bhatia. It is actually interesting you raise this, 
Congressman, because Canada actually has that. So Canada 
doesn't have a domestic content requirement. Rather, it has a 
national interest test requirement, which in some ways is a 
little bit more of a sophisticated way of looking at this, 
particularly in the modern era.
    Now, content matters to Canada, I have no doubt, production 
matters in Canada, jobs matter in Canada, but it is a question 
of is an 85 percent hard line test creating or discouraging the 
creation of local jobs?
    Just to give you a very concrete example, I go back--I 
think I may have mentioned it before--wind turbines, right? So 
if we need to depend upon--if there is an export market and we 
need to have sovereign financing to qualify for the export of 
that, we have the choice of shipping out of the United States 
or the choice of shipping out of Germany. We manufacture them 
there. We manufacture them here. We create jobs in both places.
    If U.S. export content is set at 85 percent, we can't 
access full Ex-Im funding. So we will source them out of 
Germany. We will create the jobs there. We would prefer to do 
it, obviously, in the United States, but we would end up doing 
it out of Germany if Ex-Im is uncompetitive.
    Mr. McCotter. Or it could be viewed that we are rewarding 
the initial decision to outsource the jobs and we would like to 
change the requirement so that we can still have the financing 
in place.
    Mr. Bhatia. It is a global market today, and we are 
competing against people all over the world.
    Mr. McCotter. One last question. I appreciate the tenuous 
nature of the global supply chain. I am also fascinated by how 
every generation in history makes that same argument that the 
strategic needs have changed. It is a globally interrogated 
economy. I am sure the Phoenicians thought the same and maybe 
the Athenian city state, too.
    But my last thing was something you said that was very 
fascinating to me, Mr. Scherer, when you talked about how when 
you do deals with other countries they may demand that they 
have domestic industries taken care of.
    I don't expect a response, but I would just like that to be 
clear to people. Because when my Republican colleagues 
especially talk about free trade, I want them to know that, no, 
there is negotiated trade in this world today, because if we 
had free trade, the United States would be just fine.
    Thank you.
    Chairman Miller of California. Ms. Moore is recognized for 
5 minutes.
    Ms. Moore. Thank you, Mr. Chairman.
    Mr. Bhatia, I want to turn my attention again to your 
testimony regarding eliminating the cargo preference 
requirements. The argument that you make is that this was done 
during an era where there was a desire to build a U.S. merchant 
marine fleet.
    I am wondering, if we were to eliminate this requirement, 
would that in fact lead to some insecurity with respect to the 
chain of custody of contents of these barrels, other security 
problems with regard to pirates, or various war components that 
are being shipped being able to be intervened? Do the marine 
vessels have sort of a military presence that would be able to 
be matched by the Export-Import Bank's expansion of their 
fleets?
    Mr. Bhatia. Thank you, Congresswoman.
    No, I think we do ship products that are not financed by 
Ex-Im on non-U.S.-registered vessels. Obviously, we use global 
vessels and haven't had issues that I am aware of with respect 
to security of those products. I think this is--from our 
perspective, this is a little bit of the vestige of a previous 
era.
    Ms. Moore. So what is shipped on the merchant marine ships 
that is not shipped on other cargo?
    Mr. Bhatia. Goods that Ex-Im finances, right? So if Ex-Im 
finances an export, I can actually give you a very concrete--
    Ms. Moore. Does it matter if there are military components?
    Mr. Bhatia. No. No. It has nothing to do with the 
components we are exporting. It has to do solely with the fact 
there is Ex-Im financing for us that requires us to ship it on 
U.S. vessels.
    Ms. Moore. I am sorry. If we are exporting--
    Mr. Bhatia. Let me give you maybe a concrete example.
    Wind turbines. We had an opportunity to sell wind turbines 
in Kenya. If we had used U.S. Ex-Im financing for that, we 
would have had to put those blades, these big blades that go on 
wind turbines, on U.S.-bottomed boats. The cost of using those 
U.S. boats was so high, it was actually 19 percent of the 
overall value of the contract--
    Ms. Moore. I am sorry. I don't understand. Why were you 
required to put them on the merchant marine boat?
    Mr. Bhatia. Because that is standing Ex-Im policy.
    Ms. Moore. Is it because it is something that can be 
militarized?
    Mr. Bhatia. No, it has no relationship to that. It is just 
simply a standing requirement.
    Chairman Miller of California. If the gentlewoman will 
yield, it is not Ex-Im's policy. It is maritime policy, which 
is a completely different committee. So it is nothing to do 
with Ex-Im. It is just the policy they have to comply with.
    Ms. Moore. Reclaiming my time, I was wondering, you say 
that we should match financing offered by foreign governments 
competing abroad where such financing is inconsistent with the 
OECD arrangement. I am wondering, would this run us into any 
problems with the WTO or providing these subsidies? What sort 
of market disruption would it provide for us to provide funding 
to the Ex-Im Bank to make it more competitive with places like 
China?
    Mr. Bhatia. I am glad you raised that. I think it is a very 
important point.
    Certainly, GE would in no way support WTO-inconsistent 
practices by U.S. Ex-Im or anybody else. The OECD framework is 
basically outside of the WTO. It sets a set of standards that 
the OECD member economies have agreed to. China and other major 
economies are actually outside the OECD framework. So all we 
are saying, Congresswoman, is suggesting that the Ex-Im Bank be 
in that situation able to match the non-OECD funding to be able 
to level the playing field.
    Ms. Moore. I have 30 more seconds, so let me ask you, is 
there any prohibition in your charter against actually 
marketing to small businesses that may not know that they can 
access your programming? It seems to be a disconnect that I am 
hearing from Mr. Law and people like that about people's 
ability to realize that you are there. Is there any prohibition 
against your advertising, marketing to small businesses about 
the availability of the Export-Import--
    Mr. Bhatia. As a private sector representative, I don't 
know of anything that precludes Ex-Im from doing that, 
Congresswoman.
    Ms. Moore. Do they do it? What is the scope of their 
outreach? Mr. Law?
    Mr. Law. They certainly have developed small centers in 
communities throughout the country, not that many, and they 
definitely have established some and a Web site, and they do 
then coordination with the SBA as well. My suggestion was that 
they should use organizations like ours, because our members 
are looking to us for information, and we could help get that 
information to them.
    Ms. Moore. Thank you for your indulgence, Mr. Chairman.
    Chairman Miller of California. Thank you.
    There are a couple of things I would like to read in the 
record so we can try to clear this issue up.
    First of all, cargo preference programs are administered by 
the United States Maritime Association, an agency within the 
Department of Transportation, wholly outside of our 
jurisdiction. And if you look at PR 17, it is the sense of 
Congress that any loans made by an instrument of the United 
States Government to foster the exporting of agricultural or 
other produces shall provide that the produce may be 
transported only on a vessel of the United States, unless as to 
many or all other products the Secretary of Transportation 
after investigation certifies the instrumentality of the 
vessels of the United States are not available in sufficient 
numbers.
    So, we have no control. I do understand your concerns, and 
others. But, for the record, when we are debating this issue, 
it is not something that we can control. The Transportation 
Committee will deal with that. I have talked to Chairman Mica 
about the concerns.
    Ms. Moore. Mr. Chairman, just to continue this colloquy for 
a second, this was their testimony, so I couldn't help but be 
curious about it.
    Chairman Miller of California. I understand. I wanted to 
make sure there was no confusion out there.
    Without objection, I would like to submit for the record 
the statements of the following organizations: USA Maritime; 
the Coalition of Employment Through Exports; and the National 
Association of Manufacturers.
    The Chair notes that some members may have additional 
questions for this panel which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 30 days for members to submit written question to these 
witnesses and to place their responses in the record.
    This hearing is adjourned. Thank you, witnesses.
    [Whereupon, at 3:30 p.m., the hearing was adjourned.]


                            A P P E N D I X



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