[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
THE ROLE OF THE EXPORT-IMPORT (EX-IM) BANK
OF THE UNITED STATES AMID
INTENSIVELY ECONOMIC COMPETITION
WITH CHINA
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY, ILLICIT FINANCE,
AND INTERNATIONAL FINANCIAL INSTITUTIONS
of the
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
JUNE 27, 2024
__________
Serial No. 118-99
Printed for the use of the Committee on Financial Services
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
56-625 PDF WASHINGTON : 2026
HOUSE COMMITTEE ON FINANCIAL SERVICES
PATRICK McHENRY, North Carolina, Chairman
FRENCH HILL, Arkansas, Vice MAXINE WATERS, California, Ranking
Chairman Member
FRANK D. LUCAS, Oklahoma SYLVIA R. GARCIA, Texas, Vice
PETE SESSIONS, Texas Ranking Member
BILL POSEY, Florida NYDIA M. VELAZQUEZ, New York
BLAINE LUETKEMEYER, Missouri BRAD SHERMAN, California
BILL HUIZENGA, Michigan GREGORY W. MEEKS, New York
ANN WAGNER, Missouri DAVID SCOTT, Georgia
ANDY BARR, Kentucky STEPHEN F. LYNCH, Massachusetts
ROGER WILLIAMS, Texas AL GREEN, Texas
TOM EMMER, Minnesota EMANUEL CLEAVER, Missouri
BARRY LOUDERMILK, Georgia JAMES A. HIMES, Connecticut
ALEXANDER X. MOONEY, West Virginia BILL FOSTER, Illinois
WARREN DAVIDSON, Ohio JOYCE BEATTY, Ohio
JOHN W. ROSE, Tennessee JUAN VARGAS, California
BRYAN STEIL, Wisconsin JOSH GOTTHEIMER, New Jersey
WILLIAM R. TIMMONS, IV, South VICENTE GONZALEZ, Texas
Carolina SEAN CASTEN, Illinois
RALPH NORMAN, South Carolina AYANNA PRESSLEY, Massachusetts
DANIEL MEUSER, Pennsylvania STEVEN HORSFORD, Nevada
SCOTT FITZGERALD, Wisconsin RASHIDA TLAIB, Michigan
ANDREW R. GARBARINO, New York RITCHIE TORRES, New York
YOUNG KIM, California NIKEMA WILLIAMS, Georgia
BYRON DONALDS, Florida WILEY NICKEL, North Carolina
MIKE FLOOD, Nebraska BRITTANY PETTERSEN, Colorado
MICHAEL LAWLER, New York
ZACHARY NUNN, Iowa
MONICA DE LA CRUZ, Texas
ERIN HOUCHIN, Indiana
ANDREW OGLES, Tennessee
Matthew Hoffmann, Staff Director
------
SUBCOMMITTEE ON NATIONAL SECURITY, ILLICIT FINANCE, AND INTERNATIONAL
FINANCIAL INSTITUTIONS
BLAINE LUETKEMEYER, Missouri, Chairman
YOUNG KIM, California, Vice JOYCE BEATTY, Ohio, Ranking Member
Chairwoman BRITTANY PETTERSEN, Colorado, Vice
ANDY BARR, Kentucky Ranking Member
ROGER WILLIAMS, Texas VICENTE GONZALEZ, Texas
BARRY LOUDERMILK, Georgia WILEY NICKEL, North Carolina
DANIEL MEUSER, Pennsylvania BILL FOSTER, Illinois
ZACHARY NUNN, Iowa JUAN VARGAS, California
MONICA DE LA CRUZ, Texas JOSH GOTTHEIMER, New Jersey
ANDREW OGLES, Tennessee
C O N T E N T S
----------
Thursday, June 27, 2024
OPENING STATEMENTS
Page
Hon. Blaine Luetkemeyer, Chairman of the Subcommittee on National
Security, Illicit Finance, and International Financial
Institutions, a U.S. Representative from Missouri.............. 1
Hon. Joyce Beatty, Ranking Member of the Subcommittee on National
Security, Illicit Finance, and International Financial
Institutions, a U.S. Representative from Ohio.................. 3
WITNESSES
Hon. Reta Jo Lewis, President and Chair of the Board of
Directors, Export-Import Bank of the United States............. 5
Prepared Statement........................................... 7
APPENDIX
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
RESPONSES TO QUESTIONS FOR THE RECORD
Written responses to questions for the record from Hon. Reta Jo
Lewis
Representative Kim Young..................................... 32
Representative Joyce Beatty.................................. 36
Representative Maxine Waters................................. 37
Representative Roger Williams................................ 39
LEGISLATION
H.R.------, the ``Nuclear Energy Assistance Trust Fund Act of
2024''......................................................... 40
H.R.------, the ``BRAVE Burma Act''.............................. 46
H.R.------, the ``Securing Europe's Energy Security Act of 2024'' 53
THE ROLE OF THE EXPORT-IMPORT (EX-IM) BANK
OF THE UNITED STATES AMID
INTENSIVELY ECONOMIC COMPETITION
WITH CHINA
----------
Thursday, June 27, 2024
U.S. House of Representatives,
Subcommittee on National Security,
Illicit Finance, and International
Financial Institutions,
Committee on Financial Services,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:01 a.m., in
room 2128, Rayburn House Office Building, Hon. Blaine
Luetkemeyer [chairman of the subcommittee] presiding.
Present: Representatives Luetkemeyer, Barr, Williams of
Texas, Loudermilk, Meuser, Kim, Nunn, Beatty, Gonzalez, Nickel,
Foster, Vargas, and Gottheimer.
Chairman Luetkemeyer. The Subcommittee on National
Security, Illicit Finance, and International Financial
Institutions will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
This hearing is entitled, ``The Role of the Export-Import
(EX-IM) Bank of the United States Amid Intensifying Economic
Competition with China.''
Without objection, all members will have 5 legislative days
within which to submit extraneous materials to the chair for
inclusion in the record.
I recognize myself for 5 minutes to give an opening
statement.
OPENING STATEMENT OF HON. BLAINE LUETKEMEYER, CHAIRMAN OF THE
SUBCOMMITTEE ON NATIONAL SECURITY, ILLICIT FINANCE, AND
INTERNATIONAL FINANCIAL INSTITUTIONS, A U.S. REPRESENTATIVE
FROM MISSOURI
From the outset of the 118th Congress, my top priority as
chairman of the subcommittee has been addressing what I believe
to be the biggest threat not only to the United States security
but also a global security. That threat is the bid for global
economic domination posed by Communist China.
Unlike the United States, the Chinese Communist Party (CCP)
does not subscribe to the rules-based order that has governed
trade and export credit financing for nearly a century. The CCP
demonstrates daily that it plays by its own rules and will do
anything to gain footholds in strategic sectors vital to
security.
China's highly aggressive actions in export credit
financing blend beyond economic advancement and are clearly an
effort to enhance its global power and economic might. It is
critical the United States compete and win in this arena
against China. An important tool for doing so is the topic of
today's hearing, Export-Import Bank United States, or Eximbank.
It has been 5 years since this committee last held a
hearing on Eximbank, leading up to its most recent
reauthorization in 2019. It has been 9 years since the sitting
chair of the Bank testified before us in 2015. So we are glad
to welcome the current chair, the president of Eximbank, Ms.
Reta Jo Lewis, testifying before us today.
Thank you. We appreciate your attendance, and I look
forward to your testimony here.
Eximbank was established during the Great Depression, and
over the decade since, has helped to support exports of U.S.
goods and services in cases where the private sector is
unwilling or unable to provide financing. Through direct loans,
loan guarantees, insurance, and an innovative reinsurance risk-
sharing program, the Bank boosts American small businesses and
exporters, creating or sustaining tens of thousands of American
jobs across the country.
Eximbank's ability to manage risks successfully is why it
is one of the rare government-run entities that actually makes
a profit for American taxpayers and has sent approximately $9
billion back to U.S. Treasury for debt reduction since 1992.
To orient the Bank directly--to orient the Bank to directly
combat the economic threat of Communist China, as part of its
2019 reauthorization, Congress directed Eximbank to establish
the China and Transformational Exports Program, or CTEP.
However, 5 years in, although it seems this program is having
some impact, there is much more to do that I think it could do.
I have always viewed Eximbank as having a vital role in the
United States' ability to promote global economic leadership.
We saw the harm when Eximbank's charter lapsed between 2015
and 2019, leading to a significant increase of projects being
funded by foreign export credit agencies, and those jobs went
to foreign companies and workers.
There is enormous opportunity in restoring and bolstering
America's position as a global energy superpower. Eximbank's
charter rightfully requires that it consider deals based on
banking criteria and not political considerations such as
whether an industry is disfavored as hydrocarbons are by the
current administration.
To your credit, Chair Lewis, on your watch, Eximbank
approved hydrocarbon projects in Indonesia and Bahrain.
Unfortunately, the green ideologues criticized you for doing
so.
Despite those correct decisions, there must be enormous
political pressure to ignore your charter by applying a green
filter to transactions. That is why it is so worrying to this
committee that major projects, particularly the enormous
natural gas projects in Mozambique, have been delayed and
remain unfunded by Eximbank, leaving tens of thousands of
American jobs waiting.
Similarly, nuclear power is an area where America needs to
restore its role as a global leader, and Eximbank could help do
that.
These areas and other areas, I believe, Eximbank can help
ensure a level playing field in our globally geoeconomic
competition with China but for the Bank to play that role, it
must be managed competently. That is why my colleagues and I
were concerned by a recent inspector general report that cited
significant challenges to Eximbank surrounding organizational
culture, employee morale, and high attrition rates.
In the Office of Personnel Management's (OPM's) Federal
Employee Viewpoint Survey, Eximbank plummeted from 12th place
in 2021 to dead last among 30 small Federal agencies for Best
Places to Work in the Federal Government.
So, Chair Lewis, I hope to hear from you today just exactly
what you and the rest of Eximbank leadership are going to do to
address these alarming trends. I appreciate your willingness to
come before this committee and tell us about some of Eximbank's
successes, also tell us how you and us can work better together
to be able to make Eximbank a better place to work and a better
functional agency. We look forward to your testimony.
With that, the chair recognizes the ranking member of the
subcommittee, the gentlewoman from Ohio, Mrs. Beatty, for 4
minutes for an opening statement.
OPENING STATEMENT OF HON. JOYCE BEATTY, RANKING MEMBER OF THE
SUBCOMMITTEE ON NATIONAL SECURITY, ILLICIT FINANCE, AND
INTERNATIONAL FINANCIAL INSTITUTIONS, A U.S. REPRESENTATIVE
FROM OHIO
Mrs. Beatty. Good morning and thank you, Mr. Chairman, for
holding this hearing. Thank you to our witness, president and
chair of Eximbank, Reta Joe Lewis, for appearing here today to
discuss the role of the United States Export-Import Bank,
particularly with respect to competition with China.
This year, Eximbank celebrates, as we have just heard from
our chair, 90 years of carrying out its mission to create
economic opportunity for the United States companies and
workers. So we are excited to hear from you and I join my
chairman in saying we are excited to hear how we can work
together. So thank you for that, Mr. Chair.
In full disclosure, I have had the opportunity to not only
know, but work with Madam Chair and president for some time.
For those who do not know, she comes to us as a scholar, Emory,
American University, a lawyer, a diplomat with years of
international experience in this area.
We know by providing financial tools to help the United
States businesses export their American-made goods and services
around the world, Eximbank supports United States jobs and
helps our companies successfully compete abroad.
Today you may hear claims that Eximbank simply hands out
money to large corporations, but I want to go on the record,
Mr. Chair, stating that, in fact, 90 percent of Eximbank's
authorizations directly benefit United States small businesses.
The purpose of Eximbank is to level the playing field to
ensure that American companies can compete for global sales,
and that is exactly what the Bank does in every single one of
our congressional districts represented in this hearing today.
Mr. Chairman, I would like to enter into the record a
chart. I think that will be very helpful. It identifies the
amount of small businesses who benefit from the funds of those
of us who are questioning you today and let me just say, my
colleagues on the other side, their small businesses should be
applauding you because they are in the hundreds and hundreds
and hundreds of millions of dollars to small businesses, and we
hear that frequently, that we are small business owners.
Chairman Luetkemeyer. Without objection.
[The information referred to was not submitted prior to
printing.]
Mrs. Beatty. Thank you.
Under your leadership, Chair Lewis, the Export-Import Bank
has committed to advancing diversity, equity, inclusion, and
accessibility, and cultivating a diverse workforce at the Bank,
and identifying ways to support women-owned, minority-owned,
rural, et cetera, et cetera. The Export-Import Bank is critical
to ensure the United States can effectively compete with China.
The China and Transformational Exports Program supports
U.S. exporters facing competition from China, and ensures that
we continue to lead in the 10 transformational export areas,
including AI, renewable energy, financial technology (fintech),
and semiconductors. By fostering American innovation and
expansion into global markets, Eximbank enables the United
States company to go toe-to-toe with foreign rivals, resulting
in more export and more well-paying jobs in cities across the
country.
Unfortunately, some of my colleagues across the aisle have
fought the reauthorization of Eximbank, despite historically
strong bipartisan support for the Bank. Eliminating Eximbank as
proposed by some extremist agendas, like Project 25, will only
harm our Nation's small business and hamper our efforts to
compete against China.
Democrats have a long record of working with you and I
would like to say that I was proud to be here in 2015, because
the Republicans used a discharge petition to do away with
export, and Democrats have increased the cap for Export-Import
lending.
I yield back because my time is up.
Chairman Luetkemeyer. The gentlelady's time has expired. I
want to thank her for the comments with regards--and putting
into the record the amount of small businesses that are helped
by Eximbank. I always call Eximbank the small business bank
because, technically, even if you help a big business, it takes
lots and lots of little businesses to be able to provide the
parts and service to that big business to be able to make this
all work. So there is a ripple effect that affects lots and
lots of small businesses. We have the chairman of the Small
Business Committee with us today, and I am the vice chairman of
that committee and proud to be so as well. So it is a really,
really big deal to have you with us here today, Ms. Lewis.
With that, we welcome the testimony of Hon. Reta Jo Lewis.
Ms. Lewis is the president and chair of the board of directors
of Eximbank. The ranking member did a great job of giving us an
overview of your past and present accomplishments and your
academic record. With that, we thank you for taking time to be
here. You will be recognized for 5 minutes to give an oral
presentation of your testimony. Without objection, your written
statement will be made part of the record.
Just a little quick overview, a tutorial here on the light
system. When it hits red, that is the stop sign, so--and we
will--when you hear me, like that, so if we could kind of wind
up your answer to whatever, we will move on. We will, as we
indicated earlier, try and adjourn at 10:30 here as a result of
votes being called.
With that, Ms. Lewis, you are recognized for 5 minutes.
Please turn on your microphone. Ms. Lewis--there we go and
pull the microphone close to you, please. That box does move,
so just pull it close to you so we----
STATEMENT OF HON. RETA JO LEWIS, PRESIDENT AND CHAIR OF THE
BOARD OF DIRECTORS, EXPORT-IMPORT BANK OF THE UNITED STATES
Ms. Lewis. Chairman Luetkemeyer, Ranking Member Beatty,
members of the subcommittee, thank you for inviting me to
testify on the Export-Import Bank of the United States,
Eximbank's role in intensifying economic competition with the
People's Republic of China, known as the PRC.
We hear from our partners and clients on a day-to-day bases
about the economic challenges posed by the PRC's actions. This
committee's concern about competition from the PRC was
instrumental, as you know, in establishing the China and
Transformational Exports Program, our mandate, which is now a
part of Eximbank's historic 2019 reauthorization.
Through CTEP, Eximbank supports U.S. manufacturers and
exporters facing PRC competition and advances Americans'
comparative leadership across 10 transformational export areas.
As you know, Eximbank is the official export credit agency of
the United States. Its congressionally mandated mission is to
support U.S. jobs by financing or facilitating exports. The
agency does this through our direct loans, loan guarantees, and
insurance programs in cases where the private sector is unable
or unwilling to do so.
A lapse in our charter, a lack of quorum on the board of
directors had a devastating impact on operations, staffing, and
morale, but during the 4-year period when Eximbank was
precluded from authorizing transactions greater than $10
million, competitors like the PRC--and other Asian, Canadian,
and European countries--stepped in to fill the void.
Our team has worked tirelessly to revitalize, restore, and
rebuild Eximbank's reputation as a reliable partner. In Fiscal
Year 2023, because of the dedication of our talented workforce,
Eximbank supported nearly $8.8 billion in authorizations, a 67
percent increase over Fiscal Year 2022, and supported an
estimated 40,000 jobs across the country.
Of the nearly $8.8 billion in total authorizations last
year, $2.4 billion, or more than a quarter, supported our CTEP
mandate. The value of CTEP transactions is significant. Since
my arrival in February 2022, CTEP authorizations have jumped
from $253 million in Fiscal Year 2022 to $2.4 billion in Fiscal
Year 2023. At this point in Fiscal Year 2024, the dollar amount
in authorized CTEP transactions is greater than at this point
last year. In total, Eximbank has approved $3.6 billion in CTEP
transactions.
So you may ask, what does countering competition with the
PRC look like in practice, and how has Eximbank used the CTEP
mandate to counter it? Here is just one example. This past
November, Eximbank's board approved $169 million direct loan to
BETA Technologies, a small business in Vermont that
manufactures electric power aircraft. The direct loan will
finance the expansion of BETA's manufacturing campus and help
U.S. manufacturers compete with the PRC for this emerging
industry. The transaction also falls under Eximbank's Make More
in America initiative, or MMIA.
American industries produce goods, services, and
technologies that compete and win in global markets on quality,
innovation, and lifecycle price but when the playing field is
not level, U.S. exporters are disadvantaged when competing in
foreign markets. The PRC's industrial policies hamper and harm
the ability of America's exporters to compete on fair terms in
the global marketplace.
We are laser-focused on the challenge so posed by the PRC
and the need to ensure a level playing filed for U.S.
exporters. We are using our tools like CTEP and MMIA to address
this challenge.
It is fair to say we want to do more and we can do more.
Our CTEP transactions are still subject, though, to Eximbank's
2 percent default rate cap. Suffice it to say, the default rate
poses a significant challenge to Eximbank's ability to support
U.S. exporters. China's Eximbank and the PRC and other lenders,
export lenders, are not bound by these constraints.
We are seeking a default rate cap exemption for CTEP
transactions. This would allow Eximbank to compete more
aggressively against the PRC and embrace higher risk
technologies and markets.
I would also be remiss if I did not mention that Eximbank's
charter expires at the end of 2026, because from 2015 to 2019,
when the charter lapsed and we lacked a board quorum, the world
saw a 35 percent increase.
So, Mr. Chairman and the committee, one of the things that
we would be remiss in not talking about is the fact that an
early reauthorization with enhancements to CTEP mandate backed
by a large bipartisan majority would send a strong signal to
the world that Congress is committed to supporting Eximbank and
empowering the agency to advance national interest by
facilitating exports and supporting jobs.
I look forward to working with you and other congressional
stakeholders and I look forward to your questions.
Thank you.
[The prepared statement of Ms. Lewis follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Luetkemeyer. Thank you, Ms. Lewis.
I will new turn to member questions, and the chair now
recognizes himself for 5 minutes.
Chair Lewis, let us drill down on Eximbank's deal flow and
national security. Eximbank has statutory lending authority of
$135 billion. How much of that $135 billion is now obligated,
and how much more could Eximbank be doing before reaching $135
billion ceiling?
Ms. Lewis. That allocation, Mr. Chairman, is around $34
billion that we have authorized thus far. We intend to--we have
a very, very strong pipeline of projects throughout the
different mandates, as well as throughout different sectors
that we are operating in, and we look forward to continuing to
do more.
Chairman Luetkemeyer. Okay. I know that when we shut down
in the late 20-teens, that really hurt our ability and, I
guess, the reputation of the Eximbank, and it took us a while
to get it back up and going, then the pandemic hit, but I think
we are in a position now where we need to, especially with
China coming on, to be able to compete against them and find a
way to get that done.
So that leads into my next question here with regards to--
Congress passed, and as you mentioned here, President Trump
signed into law the reauthorization. As part of the
legislation, the Program on China and Transformational Exports
was established with a goal of 20 percent of your statutory
lending authority, which is $27 billion to counter China. You
note in your testimony that it was only, I think, 2.4 last year
and you are up to over 3 billion now, if I am not mistaken.
What is your strategy for substantially growing CTEP
transactions?
Ms. Lewis. Absolutely, Mr. Chairman. We have a sense of
urgency about the work that we are doing. Our strategy has
been, as we have reviewed the 10 transformational exports, we
have seen significant growth in the work that we have been
doing in everything from renewable energy, 5G, as well as in
the work on water and sanitation.
Our strategy has been that we are looking to use all of our
tools to compete with China, as well as to help build and keep
manufacturing here in the United States. That is why, as we
have looked at the 10 specific sectors, everything from AI to
financial technology to renewable energy, we are continuing to
be as aggressive as we can to work as a whole of government in
looking for bankable projects.
Chairman Luetkemeyer. Okay. As you go through all this
here, the CTEP was pretty limited to 10 transformational export
areas. We look at changes to the program, how does that impact
your underwriting, should we be looking at adding more areas or
scrap them all together. I think that is one of the questions
we want to look at here. Basically, what kind of changes do you
see to the program that can be impactful? The 10
transformational export areas here, do we need to scrap it, do
we need to expand it?
You mentioned already that the 2 percent default cap rate
is a problem. Should it go to 4? You suggested here that we
have an exemption for just CTEP programs. Can you expand on
that, please?
Ms. Lewis. Yes, Mr. Chairman.
Also, no other Export Credit Agency (ECA) that we are aware
of, and definitely not the PRC, has those types of constraints
on them as it relates to a default rate. One of the things, as
I mentioned in my testimony, we are definitely seeking a CTEP
carve-out, as well as appreciating the opportunity to come
before this body about early reauthorization. We believe that
carve-out will continue to help us level the playing field
because we still have numerous statutory parameters that other
ECAs do not.
Chairman Luetkemeyer. I appreciate that. I think one of the
things you need to look at is this green lens that you have to
look through your project from has got to be forgotten about.
We have to look at the value of that project with regards to
our ability to impact jobs here at home and across the world
and a leadership position that we can be in.
I would be remiss if I did not mention or discuss for a few
minutes here the report from OPM. It is very alarming, quite
frankly, Ms. Lewis, whenever best places to work you go from
12th to the bottom. This committee has oversight of Federal
Deposit Insurance Corporation (FDIC) and the FDIC just had a
scathing report in which it had documented cases of racial
discrimination, sexual discrimination, even a rape, with
regards to some of its employees and some of the training
facilities that they were located in. That is disturbing when
you are that low.
Can you tell me what is going on, what your plans are to
fix the problem?
Ms. Lewis. Thank you, Mr. Chairman, for that question.
One of the things that I say on a repeated basis is that
human capital is our greatest resource and one of the areas
that I was very intense on after being confirmed, and prior to
confirmation, was to really review where we were as it relates
to staff morale, where we were in terms of an agency.
As I have begun to study Eximbank and being there now, if I
look at the Federal Employee Viewpoint Survey (FEVS) scores
that were started back in 2005, we have always been at the
lower one-fifth of the category. So that data was telling me
that there was some systemic historical challenges, but there
are opportunities for us to do more.
One of the things that immediately I began to do was to
hire human capital----
Chairman Luetkemeyer. Ms. Lewis, I will let somebody else
ask the question again and you can give us further elaboration.
My time is up.
With that, we would go to the gentlelady from Ohio, the
ranking member. Mrs. Beatty, is recognized for 5 minutes.
Mrs. Beatty. Thank you, Mr. Chairman and thank you
president and chair.
Just for the record, I want to make sure, in my opening
statement when I said I was proud to be here, that got
associated with when we reestablished Eximbank under Ranking
Waters' leadership after 7 years. It may have gotten mixed in
with something else.
For my first question, let me continue with what the chair
is saying, because he is correct how we felt about FDIC and
what was happening there. So I will give you some time to
finish your statement on that.
Ms. Lewis. Madam Congresswoman, one of the first things we
also did was to bring in an outside--one of the Big 4--to work
directly with our leadership team to improve the unity and
leadership levels; would focus on training and development. In
more than 5 years, we had not hired a permanent chief human
capital officer, and we have done so. We also have hired a new
chief management officer. We have redoubled our efforts around
training and development, launched our first formal mentoring
program, enhanced our affinity programs, expanded individual
benefit programs.
We are working extensively on next generation of leaders in
ensuring that our next senior level officers are prepared for
the future. We have conducted over three offsite retreats, not
just with the senior managers, but with all of our managers,
which encompasses about 60 of them. We have required individual
departments to host offsite retreats for their teams.
So we know that change may be slow to occur, but I do
believe that we are moving in the right direction.
Mrs. Beatty. That is what I was going to ask you, if you
think--and let me just remind people, you have been there for
how long?
Ms. Lewis. About 2 years.
Mrs. Beatty. For 2 years. You said in more than 5, so some
of this I think I am safe in saying you acquired from past. It
sounds like you at least have a plan, and you are bringing
experts from the outside to deal with it. So I am sure you will
be asked in later time about that again. So I applaud you for
recognizing and not denying that there is an issue, and I think
that is the first step.
Let me also go to the next question. There has been some
discussion about increasing Eximbank's default cap from 2
percent to 4 percent. Many of my colleagues have put together
legislation that would do that. Can you expound on or explain
how this change could positively, if so, impact your work in
your capacity to carry out your mission?
Ms. Lewis. Absolutely, Congresswoman. We are seeking a
default rate cap exemption for CTEP transactions. We believe it
will allow Eximbank to compete more aggressively against the
PRC and embrace higher risk technologies and markets. When you
look at what hampers any other agency, no other U.S. Government
agency has that cap, no other foreign credit agency and
definitely not the PRC, that we are aware of.
We know that with Eximbank sunsetting in 2026 or through
early reauthorization would signal that market in U.S.
exporters that Eximbank is for them for the--in it for them for
the long term. So getting that default rate cap and that carve-
out for CTEP would be exceptional and significant.
Mrs. Beatty. Thank you.
One last question I may be able to squeeze in. Chair Lewis,
Eximbank's authorization is going to expire, and you have said
that in your opening remarks, December 30, 2026. A
reauthorization will be necessary prior to that date, as you
have said. Let me again say to all who are here and some who
may not have been here as long as the chair and I, this has
always been a bipartisan for most of the time that I have been
here. So can you take my last minute to share or say, are there
any potential long-term challenges facing Eximbank that
Congress should consider in reauthorizing your agency?
Ms. Lewis. Congresswoman, thank you, also to the committee.
We have always operated in a bipartisan way. Chairman Bachus,
who used to be the head of this committee, sends his regards.
He is going to be with us later today. He could not be here
right now, but he is on his way to Washington.
The continuation of the seeking of the relief for the CTEP
carve-out, the early reauthorization, is the areas that would
be of significance to support jobs, help our companies level
the playing field, and help us compete with China.
Mrs. Beatty. Thank you.
Mr. Chair, I give you back 7 seconds.
Chairman Luetkemeyer. Thank you, ma'am, the gentlelady from
Ohio.
We are going to try to get one more in here before the
votes are called. With that, we are going to recognize the
gentleman from Kentucky, Mr. Barr, who is the chair of the
Subcommittee of Financial Institutions and Monetary Policy. He
is recognized for 5 minutes.
Mr. Barr. Thank you, Mr. Chairman.
Chair Lewis, my wife graduated from the University of
Georgia, so she would say ``Go Dogs.'' I am a Kentucky Wildcat
so that is hard for me to do but, anyway, great to see you and
thanks for your service.
In May, members of this subcommittee sent you a letter
expressing concerns with recent suggestions that Eximbank was
prioritizing projects aligned with environmental goals as
opposed to this China objective. Chairman Luetkemeyer mentioned
deal flow and the backlog of unapproved projects.
One such project is the natural gas pipeline in Mozambique.
What is the holdup here?
Ms. Lewis. Mr. Chairman, definitely tell your wife ``Go
Dogs.'' She is absolutely right. We are all about the red and
the black.
Right now, Congressman, no decision has been made yet with
respect to that amendment of the approved financing for that
particular project. The current amendment does not involve a
fresh review of entire transactions which was approved under
the prior administration.
Mr. Barr. Well, let me just--without regard to the
specifics of the Mozambique natural gas pipeline, I hope that
the holdup is not related to the political influences of the
administration's climate agenda. In fact, when we reauthorized
Eximbank, we prohibited the Bank from discriminating against
fossil energy projects. Let me tell you why that is important
with respect to the China and Transformational Exports Program
that we also authorized in the reauthorization.
As the independent task force report from the Council on
Foreign Relation demonstrates, since the creation of the Belt
and Road Initiative, billions of dollars in Chinese funds have
flowed toward fossil fuel projects around the world. Now, it is
great if the United States can offer clean energy projects as
an alternative in lesser developed parts of the world as a tool
to counter Belt and Road. The fact of the matter is, in the
global south, there is a lot of energy poverty and when we do
not offer an alternative for those lesser developed countries
in terms of energy security, they are going to go to China.
So I am concerned that the bias against fossil energy
projects at Eximbank and within the administration compromises
U.S. national security with respect to this objective of
countering China. Can you speak to that and can you commit to
this committee that the administration's climate agenda will
not compromise our efforts to combat Belt and Road?
Ms. Lewis. Congressman, we know as Eximbank we are not an
island separated from the politics of the broader government.
However, we believe that there is an important role for
Eximbank to play to support all industries and workers in our
country, but we have to do it also in accordance with the
statutory, regulatory, and policy requirements that Congress
has laid out for us. Congress has been very clear about the
nondiscrimination clause in our charter and we take that to
heart.
To further your comment on Moz, the amendment request, just
so you know, is being processed in compliance with Eximbank
standard policies. Eximbank remains in coordination with the
other project lenders, and due to force majeure, no
disbursements has been made to date on this transaction.
Mr. Barr. Thank you very much. We will look forward to
hearing more about the progress on Mozambique.
I introduced a bill called the Countering China Through
American Exports Competitiveness Act. I am a big supporter of
CTEP and I appreciate your work on that. I want to supercharge
that work and this bill would increase from 20 to 33 percent
the incentives that Eximbank would be used to counter China.
Do you agree that while it is still essential that the Bank
make sound business decisions in its deals, allowing the Bank
to make larger, more aggressive deals is a key tool in
countering China?
Ms. Lewis. Congressman, as they say, we have more, we can
do more. We really look forward to working with you and the
committee on any legislation that is going to assist us to help
American workers, help American business exporters to compete
against China to help level the playing field.
Mr. Barr. By the way, I agree with you about raising the
default rate cap, especially for CTEP. My bill would raise that
from 2 percent to 5 percent to allow Eximbank to be more
aggressive in its transactions and posture to counter China's
Belt and Road Initiative.
I think the goal under CTEP right now would be something
like $27 billion. I think the deal is only about 2.
Ms. Lewis. Yes. We are at 3.6.
Mr. Barr. 3.6. So you have a lot of room to go to get to 20
percent. I want to raise it to 33 percent of all Eximbank
activities. So just to encourage you to get a little higher on
those deals that are related to CTEP.
Ms. Lewis. Yes, we are, sir. Those deals are coming in, our
pipeline is strong.
Mr. Barr. Thank you. I yield back. Appreciate your service.
Keep up the good work.
Ms. Lewis. Thank you, sir.
Chairman Luetkemeyer. The gentleman yields back.
With that, we go to Mr. Nickel from North Carolina. You are
recognized for 5 minutes.
Mr. Nickel. Thank so much, Chair Lewis, for being here
today. I enjoyed talking with you earlier.
The Export-Import Bank plays an essential role in assuring
American competitiveness around the globe by providing American
companies with the financial tools necessary to export their
goods and services globally. We can compete directly with
China's aggressive trade practices while boosting American
manufacturing jobs.
One area where the Export-Import Bank has the potential to
be extremely influential is nuclear energy exports. The export
of U.S. civil nuclear energy technology is important to our
national security, our economic security, and most importantly,
to fighting the climate crisis around the globe.
Governments around the world are shifting policies toward
nuclear energy, and the U.S. must be the leader in this space.
Unfortunately, Russia is the world's dominant global nuclear
supplier. Russia's state-owned nuclear energy conglomerate
currently has 70 percent of the worldwide export market for new
reactor construction. The Chinese nuclear industry has said
that China could build as many as 30 nuclear reactors around
the world abroad worth $145 billion by 2030. Russia and China
both funnel endless resources into nuclear exports for their
geopolitical influence. Meanwhile, U.S. companies are competing
against foreign governments without meaningful support from the
Federal Government.
The United States of America cannot fall behind. That is
why I am drafting legislation to jump-start nuclear financing
at the Export-Import Bank. I have a two-part question for you
here. What do you think of my proposal, and would you support
these policies?
So that is what I am going to get to in a sec here. What
role do you think the Export-Import Bank could play in
financing nuclear energy if the default rate limit was
permanently raised from 2 percent to 4 percent and its civil
nuclear facilities were included in the China and
Transformational Exports Program? Again, would you support
those policy proposals?
Ms. Lewis. Congressman, thank you very much for that
question.
Eximbank has been supporting financing for overseas nuclear
transactions now for over five decades, and it has world-class
expertise to be able to evaluate the technical, the legal, and
the financial of these particular projects.
One of the things that we are very supportive of,
Congressman, is also a carve-out for under CTEP, as well as a
carve-out for nuclear. We believe that it will also continue to
make us more competitive and be able to offer more
flexibilities for our exporters, but also the continuation of
supporting jobs, but more importantly, to help us compete
against the PRC and Russia.
Mr. Nickel. Should we be concerned about what happens when
China and Russia start aggressively pushing their nuclear
technology in key strategic areas around the world?
Ms. Lewis. We should be concerned, but I am going to let
our State Department take that question when they come before
you but one of the areas specifically as it relates to
Eximbank, we want those, our manufacturers, to be able to
compete but not just compete, to win. We want our American--we
want those products to be American made. We do not want our
manufacturers to lose, and that is why we are so aggressively
in this space.
If you have seen the work that we have been doing over
these last couple of years, very much being aggressive around,
not only the large nuclear reactors, but the work that our
companies are producing manufacturing around small nuclear
reactors.
Mr. Nickel. I want to do a lot more to help improve the
mission. The Export-Import Bank has the experience and
expertise to approve highly complex transactions like civil
nuclear exports. Given the demand in this space, does the
agency have the resources and staffing to do the business
development, underwriting, and legal work needed to manage
these transactions?
Ms. Lewis. That is why our carve-out, Congressman, could be
so important for us under CTEP, as well as in the nuclear
space. We are also working very closely with our partner and
our allies on co-financing together. We are working very
closely in our entire U.S. Government. We believe that it is
the combination of all the work that we will be able to do, we
will be able to see our exporters not only compete but also to
win and be able to help with the tools we have to level the
playing field to be able to win against China and Russia.
Mr. Nickel. It is clear that we are falling behind. China
is a decade or more ahead of the U.S. in its ability to deploy
nuclear reactors at scale. Given that China has three export
credit agencies supporting its geopolitical ambitions, do you
agree that the U.S. must work to level the playing field?
Ms. Lewis. Absolutely, Congressman. These deals that you
are speaking of are very large, and we need the types of
flexibility that only this committee can be able to afford us
and we really look forward to working with you on your
legislation.
Mr. Nickel. Thanks so much.
I look forward to working closely in a bipartisan way with
my colleagues on both sides of the aisle to get this done.
Thank you.
Chairman Luetkemeyer. The gentleman yields back.
Votes have been called, and in my discussions yesterday
with the floor leader, he indicated he is intent on getting the
20 minutes for the first vote and after that he will start
closing the board. So because of that we are going to call a
recess here.
Ms. Lewis has agreed to stick around. For her purposes--so
we have 21 votes, which should take about an hour and a half,
roughly. So if you would come back in the neighborhood of noon,
we will be back here as soon as votes are over.
With that, the committee is recessed.
[Recess.]
Chairman Luetkemeyer. The committee will be back in session
and appreciate the witness, Ms. Lewis, for sticking around.
Apologize for the interruption, but welcome to our world. This
is the way we operate every day.
With that, let us go to the gentleman from Texas, Mr.
Williams, who is the Small Business Committee chairman. He is
recognized for 5 minutes.
Mr. Williams of Texas. Thank you, Mr. Chair.
Madam Chair, thank you for being here today.
Compared to other export credit agencies and international
financial institutions, the U.S. Eximbank tends to move slower
when approving deals. The Eximbank approval process can take
over 6 months; in some cases, over a year. However, other
countries, like China, are approving deals more quickly which
allows them to undercut Western export credit agencies.
I understand the importance of taking the time to vet
deals. I am in the financing business myself, but I am
concerned that the U.S. will be overlooked if our approval
process is known to be slower, which puts us at a competitive
disadvantage to China.
So, Madam Chair, what is Eximbank doing to improve deal
approval timelines and ensure the Bank remains competitive with
its counterparts?
Ms. Lewis. Yes, Congressman. One of the things that we have
been able to definitely do is, one of the things we realize is
that our internal controls, which are very critical for any
financial institution. We have been working to understand where
we are in our processes and move to them quicker. We have also
hired a Big 4 to really help us revamp our internal controls
procedures so that we can stand up as a--and we are also
standing up an independent new ethics division.
We know that our deals may take a little longer, but we
want to make sure that we are continuing to do the work that
Congress asks to us to do and protect the new taxpayers, and
that is why our due diligence may take a little longer, but we
are doing what we can to move things faster.
Mr. Williams of Texas. That is important, and thank you for
doing that.
Furthermore, it seems that the approval process has become
even slower for fossil fuel related projects, as Eximbank has
come under pressure from environmental groups. Now, we cannot
allow foreign adversaries like China to gain a competitive
advantage over the United States because the administration is
restricting projects based on politics.
So, Madam Chair, do deals in certain sectors take longer
than average? If so, which sectors and why?
Ms. Lewis. As you said, Congressman, I want to speak
specifically to that, we believe that at Eximbank we have a
very serious role to play, especially in that industry. To
support--as we support all industries and workers in accordance
with the statutory, regulatory, and policy requirements but one
of the things is that we review each deal on its merits. We
stay in close contact with all partners involved and we are
working through a lot of these. These deals are major project
finance deals, and they have oftentimes some very serious
security concerns.
With that, some of our--a lot of our underwriters do not
have the clearances, but we are being very clear about those
that do to make them understand that we are taking the
responsibilities to look at all of these deals closer and make
sure that we do not have any perceived delays.
Mr. Williams of Texas. Well, they do not need to be based
on certain related projects that may not fit this
administration.
Let me just ask this: Could you provide--I am going to ask
a question here--could you provide the committee with a list of
deals that have taken more than a year to consider?
Ms. Lewis. We can work with your staff and the committee on
that, yes.
Mr. Williams of Texas. Okay. If you would do that, that
would be great.
Now, China's Belt and Road Initiative has expanded its
influence globally through massive infrastructure investments,
raising concerns about the strategic and security implications
for the United States. The Belt and Road Initiative has been
criticized for being--for creating debt dependencies for
participating countries and increasing China's geopolitical
leverage.
As the U.S. seeks to counter China's influence, we face a
challenge of competing effectively without adapting similar
authoritarian or state-driven practices. Madam Chair, how does
the Export-Import Bank plan to mitigate these risks and offer
competitive alternatives to countries considering China's Belt
and Road program?
Ms. Lewis. Well, Congressman, thank you so much for the
question, because we believe that we are working very
aggressively to institute our China and Transformational Export
Program. We have also, from the board, modernized our content
policy as it relates to 5G and other transformational exports.
Also, we believe that helping--using tools like Make More in
America to help build and keep manufacturing here in the United
States is one of the big areas that is going to be
transformative to help us compete with the PRC.
Mr. Williams of Texas. I have a real short amount of time
here. I will ask you real quick, has the number of vacancies in
key positions hindered the Eximbank's ability to support U.S.
exporters?
Ms. Lewis. We have been looking very aggressively with a
new chief human capital officer and a chief management officer
to fill all of our vacancies, and we have been moving very
aggressively on those.
Mr. Williams of Texas. You have to have people.
I yield my time back.
Chairman Luetkemeyer. The gentleman yields.
With that, we go to the gentleman from Pennsylvania, Mr.
Meuser, who is recognized for 5 minutes.
Mr. Meuser. Thank you, Mr. Chairman. Thank you very much,
Chair Lewis.
It is, of course, crucial to understand the importance of
the Export-Import Bank's role in supporting American businesses
abroad with China and Russia, as has been stated many times
here. Financial global projects and an aggressive manner,
Eximbank is an important tool to help American companies. That
is clear.
Your approval of significant fossil fuel projects in
Indonesia and Bahrain demonstrates Eximbank's capacity.
However, we need a commitment to remain project neutral,
especially concerning the $18 billion of the liquefied natural
gas (LNG) projects in Mozambique and New Guinea. Allegations of
delays due to the President's executive order need to be
addressed.
Second, reauthorization of Eximbank's approaches next
Congress--as we approach next Congress, fiscal responsibility
is critical. So we must examine how much of the $135 billion in
capital that is currently obligated consider measures to
enhance fiscal prudence.
And last, the Eximbank is a lender of last resort, not a
competitive private financing. This distinction is vital to
ensure it supports American companies effectively without
encroaching on the private sector business.
Given President Biden's recent ban, Chairwoman, on LNG
exports, can you commit to being project neutral for two LNG
projects in Mozambique and New Guinea totaling nearly $18
billion?
Ms. Lewis. As it relates, Congressman, no decision, as we
have said, has been made yet with respect to the amendment on
the approved financing for this project. We know, as it relates
to Moz' LNGs project, for all of our deals, Eximbank conducts
extensive due diligence which takes time. Although not being a
national security agency, there are so many individuals that we
have to continue to conduct due diligence with and because of
all the geopolitical issues surrounding a lot of the projects,
we work very closely with interagency partners.
However, one of the things is, as you know Congressman,
when the committee instituted a nondiscrimination policy, we
understand that we write to our standard of reasonable
assurance of repayment, as well as we work extremely hard to
support all industries and to make sure that we uphold in all
of our underwriting the statutory, regulatory, and policy
requirements.
Mr. Meuser. Okay. Thank you.
My guess is, though, you must be a little frustrated that--
to improve the deal approval timelines so the Bank remains
competitive, particularly against the Belt and Road and such?
Ms. Lewis. Absolutely. There are some of the projects that
have been no fault of Eximbank's from a delay perspective.
There are others that have all of them, ones I think you
mentioned have security concerns. We would really love to have
an opportunity to come speak with you or any member of the
committee to discuss where we are in any of those projects.
Mr. Meuser. Okay. So reauthorization for Eximbank is going
to come up next Congress. So your Eximbank's lending leverages
taxpayer dollars, of course, fiscal responsibility is critical.
Of $135 billion Eximbank's available capital, how much is
currently obligated?
Ms. Lewis. About 35--about $34 billion.
Mr. Meuser. Okay.
Ms. Lewis. We have a very strong pipeline, Congressman.
Mr. Meuser. Okay, and you currently have this 2 percent cap
on percentage of loans that can default before heavy penalties.
Is that where--where do you stand on that? What is your feeling
about that?
Ms. Lewis. Well, one of the things that we have been in
discussions about the asking for that carve-out for CTEP, as
well as it is important for us to work with all of you to
understand that no other ECA or no other, especially the PRC,
does not have that type of constraint but we are very clear
that working to level the playing field is very important. So
getting a carve-out on the default rate during reauthorization
would also be very important for us.
Mr. Meuser. Okay. What is it now? What are you writing off?
What is the default rate?
Ms. Lewis. It is about 1.012 right now.
Mr. Meuser. Okay, good.
Ms. Lewis. Yes.
Mr. Meuser. That is excellent.
All right. Can you offer anything else as to your thoughts
on what improvements or projects or something else that is top
of mind with the Export-Import Bank and why you believe it is
such an effective tool and something you are proud of?
Ms. Lewis. We are very proud of the fact of the CTEP
mandate that Congress awarded us. We are very proud of the fact
that we have instituted a new program called MMIA, which is
Make More in America, to help build and keep manufacturing
right here in the United States. We believe that the
combination of CTEP and MMIA as additional tools allow----
Mr. Meuser. Thank you, Chairwoman. I am sorry, I am out of
time.
I yield back, Mr. Chairman.
Chairman Luetkemeyer. The gentleman's time has expired.
With that, we will go to the gentleman from Illinois. Mr.
Foster is recognized for 5 minutes.
Mr. Foster. Thank you, Chairman Luetkemeyer and thank you
for joining us today, Chair Lewis.
Since 2014, the Eximbank has helped companies in Illinois
export roughly $6 billion in goods, including nearly $100
million in my district alone. The Chicago and metropolitan
region just celebrated its 11th straight year of being the
number one region in the United States for businesses to locate
into. Many of these businesses are high-tech manufacturing
businesses, and many of them are reshoring jobs to build more
in America. It has been a long-term success, I think, frankly,
in large part due to the high-skilled union workforce that you
can get in the Chicago metro region.
This is also a subject very dear to my heart because, as
you may know, I am actually one of the few manufacturers in the
U.S. Congress. When I was 19, my little brother and I started
this company that manufactures the majority of theater lighting
equipment and exports a big fraction of what we do. So we
understand all the stress that U.S. manufacturing has gone
through over the last 30 years. I really thank you for your
role in mitigating that.
Out of the 241 projects that Eximbank has supported in
Illinois, I am really happy to see that nearly three-fourths of
them have been from small businesses. Okay? Early in this
administration, the Eximbank restarted its new business
development and outreach division to engage American companies
about the services that your bank can provide.
Since restarting that effort, how has the Eximbank been
engaged with companies across the country that may benefit from
the assistance it provides? Because not every business knows
that you exist and the help you can provide.
Ms. Lewis. Well, we appreciate the question, Congressman.
And we appreciate the committee continuing to work with us
throughout State and localities, especially in the State of
Illinois we met with SelectUSA. We just met with the Governor's
team, talking about new products like MMIA. We are really
looking forward to the complementary work that we can do
between CTEP and our Make More in America initiative.
Mr. Foster. Yes, thank you. I just want to encourage you to
reach out more to the small businesses everywhere, because some
of them know and the ones that know are very enthusiastic about
your program and most of them just sort of look at you blankly
when I go and talk to the chambers of commerce throughout the
eight counties that I represent.
Now, in the 2019 reauthorization of the Eximbank, Congress
established the China and Transformational Exports Program,
which aims to counter subsidies and finance provided by the
Government of China and advance U.S. competitiveness in key
industries around the world and this is something I am
personally very keenly aware of. We had to compete with clone
Chinese products, built with poorly paid labor for some period
of time now. I am proud that our company mainly succeeded.
Though I should clarify, I no longer own the company. When I
entered politics, I had my partners buy me out in order to
avoid conflicts of interest, which maybe sounds a little bit
quaint these days.
How does the Eximbank prioritize its review of projects
that are meant to counter China's efforts in key sectors? What
other factors are considered in setting the Bank's agenda in
this area?
Ms. Lewis. Congressman, these projects are really highly
privatized. When we were reauthorized, as you said, the
Congress gave us a mandate in those particular areas and we are
being very aggressive within our global business development
team, within our CTEP team, and with our small business and
with our large-and medium-size businesses.
We have, I believe, broken down a lot of those silos to
make sure that we are operating as a one Eximbank effort. I
think what most people do not realize about us also,
Congressman, is in the small business arena, that over for the
last 21, 22, 23, over 85 to 85 percent of our transactions have
been in the small businesses arena.
Mr. Foster. Yes. One of the things that makes your life
difficult is that you compete against, for example, Chinese
projects that are, frankly, driven by corruption in many of the
countries they operate in. You can see--you are worried about
your 2 percent failure rate. The Chinese Belt and Road
Initiative is probably going to have a 100 percent failure rate
in having their loans repaid because they were not driven by
actual economic analysis and market need but by just corruption
and not very well thought out. You see riots in Kenya today----
Ms. Lewis. Yes.
Mr. Foster [continuing]. because of corrupt deals that have
driven the country into debt. So how do you deal with the
corruption end of it?
Ms. Lewis. One of the things that we definitely see is that
we tell our exporters we are not doing a race to the bottom;
that we are there promoting American businesses on value and
quality.
Mr. Foster. Thank you.
I guess my time is up. I just want to thank you again for
what you are doing for U.S. manufacturing businesses.
Chairman Luetkemeyer. The gentleman yields back.
With that, we have one more member who would like to have 5
minutes to discuss important and salient information that we
can delve from the testimony of our wonderful witness here
today.
Did I drag that long enough that you can get ready to go,
Mr. Loudermilk?
Okay. With that, we recognize the gentleman from Georgia,
Mr. Loudermilk, for 5 minutes.
Mr. Loudermilk. Well, thank you, Mr. Chairman. I apologize
for my delay in getting back, but unavoidable delays.
Thank you for your patience in being with us and I guess I
am batting cleanup here today. So we all get to take a break
after this.
Again, thank you for being here to testify as we lay the
groundwork for reauthorizing the U.S. Eximbank.
As my colleagues pointed out, the Bank's most recent
reauthorization saw a realignment of the Bank's priorities
toward strategic competition with China. The Bank now oversees
the China and Transformational Exports Program, CTEP, as has
been discussed earlier today. While there is a clear strategic
value in countering Chinese export financing, I am concerned
that CTEP has not scaled fast enough.
As the gentleman from Kentucky pointed out, Congress
reserved no less than 20 percent of the Bank's $135 billion of
statutory lending authority for financing through CTEP. That
means you are supposed to reserve around $27 billion of your
total lending authority for CTEP, but you stated that the
Bank's total CTEP transactions amount only to around $3.6
billion.
Ms. Lewis. Yes.
Mr. Loudermilk. Could you explain in more detail why this
is the case?
Ms. Lewis. One of the things, Congressman--thank you for
that question--is that some of these transformational exports
are not really conducive to debt financing. Some of them are in
nascent industries. However, what we have seen in the last year
and definitely the last year and a half is an uptick in the
specialty areas in some of the--not specialty, but in some of
the transformational areas, especially around biomedical,
energy efficiency, wireless, and renewables. We continue to not
only drill down in those areas but to look more broadly at the
transformational areas to see how we can offer up our tools to
assist U.S. businesses to compete and win.
Mr. Loudermilk. So you mentioned earlier a strong pipeline
of projects but we will want to see strong sides of betterment
if we are going to reauthorize the Bank in the next Congress.
Could you briefly share how you plan to scale up that statutory
CTEP authority?
Ms. Lewis. Absolutely, Congressman. We have issued--what we
have is letters of interest, over 186 of those. We think that,
in this particular time period, those letters of interest have
been issued primarily in the energy storage and wireless
communications sector, but this gives us a first review of
looking at those particular projects. It also gives us an
opportunity to develop those relationships and to do the type
of engagements that is going to be needed. Those--we see those
interests as being very important. It is just a signal to the
market and it also gives us an opportunity to convert many of
those to actual projects.
Mr. Loudermilk. Okay. Thank you.
During the last Eximbank reauthorization debate, I saw the
utility of the Bank as a national security and strategic tool,
but was also sympathetic to some of the arguments from those
opposed to reauthorizing the Bank. I am still concerned with
striking the balance between aggressively countering China and
maintaining Eximbank as a lender of last resort, mainly so we
are not competing with the private sector. I think that is the
concern of those that are in opposition to this.
In your opinion, how do we balance those two priorities?
Ms. Lewis. You are absolutely right, Congressman. We need
to always be striking that balance. In striking that balance,
one of the things that Congress is very clear about Eximbank is
that we are supposed to be crowding in not crowding out the
private sector. We are supposed to be additional to any
particular transaction. Those are the things that we, our
underwriters, write to as standards.
One of the things that we do know, Congressman, is that
many foreign competitors, you know, they get a lot of support
from their financial institutions and from their governments,
especially the PRC. Right now, there are over about 115 export
agencies around the world and so, if we are not there,
Congressman, some other government is and especially the PRC.
Mr. Loudermilk. Yes, and we are in a different era than
what maybe even our Founders expected us to be in, especially
with these heavily subsidization of competing nations.
Just to shift a little bit, in your opinion, how should we
calibrate a potential default rate cap increase to best balance
aggressive Eximbank financing with sound risk management while
keeping the Bank a lender of last resort?
Ms. Lewis. Absolutely, Congressman. Eximbank celebrated its
90th anniversary. We think there is still so much more that we
can do to--for our exporters to be able to use Eximbank's
programs. We believe that, as you know, no one gets any special
treatment at Eximbank. All transactions are consistent with our
legal requirements, our financial requirements, and our
technical requirements. We are going to continue to do that
type of work to ensure that our companies can stay competitive,
but not just be competitive, but also to win.
Mr. Loudermilk. All right. Thank you. I yield back.
Chairman Luetkemeyer. The gentleman yields back.
Now we go with the gentleman from Iowa, Mr. Nunn, who is
recognized for 5 minutes.
Mr. Nunn. Thank you very much, Mr. Chairman and Madam
Ranking Member for this.
I want to--I appreciate President Lewis for being here with
us today.
I think we all know that we are currently in a new era of
global competition and that we are faced off with our greatest
adversary here being China. Literally in this case, all the
chips are on the table when it comes to this. Specifically, our
challenges in the global economic leadership are very real.
U.S. possesses several critical tools, as we know, to remain a
global super power. The U.S. Import-Export Bank is one of those
tools to support U.S. jobs, combat our adversaries, promote
American economic influence.
In the last 10 years alone, the Export-Import Bank has
helped generate nearly a quarter of a billion dollars in
economic value just in my home State of Iowa. So I want to
thank you for your leadership on this, for our farmers' sake,
our manufacturers, and for being here today to help keep
America a leader in this era.
With this, President Lewis, I want to speak specifically to
the Chinese Communist Party's ownership in things like
telecommunications, Huawei, ZTE; their investment in things
like the deep water ports that we are seeing in South America,
Peru specifically; economic corridors to Pakistan; bridges and
roads being built in Cambodia. The list goes on and on. Mineral
extraction in Africa. China's Belt and Road Initiative we all
know is targeted, it has penetrated a huge part of the economic
globe, and it is an area where we need to be looking forward on
how do we combat this and bring it on its side.
Can you provide top line ways the U.S. can help combat this
and specifically prevent the CCP taking ownership of other
countries?
Ms. Lewis. Absolutely, Congressman. As you said, the
competition is fierce, and we are trying--we have the sense of
urgency at Eximbank, especially with the mandate that you all
have provided us and the new tools that we are creating and the
new flexibilities that we are giving in terms of providing
longer tenures and looking at the terms much more than having
the ability to assist our companies. That is one of the reasons
why we have been here to discuss how do we continue to level
the playing field, and having that CTEP carve-out and the early
reauthorization we believe is going to be very important.
Mr. Nunn. Good to hear. Let me ask this: Where is the
Eximbank going in the runway ahead? Where can we be most
effective?
Ms. Lewis. I think we are most effective in this
conversation that we are having today about CTEP. We are
looking to continue to see how we can work with all of you so
that the market is clear that Eximbank is a stable institution,
that Eximbank has been revitalized, that Eximbank has strong
bipartisan support in its reauthorization. All of those are
areas that I believe would be very important to send as a
signal to the market that Eximbank is not only back in business
but that we can also deliver results around the mandates that
we are supporting, as well as supporting all sectors, large,
medium, and small companies.
Mr. Nunn. I think it is really important here, particularly
when it comes to critical technologies, that we are playing in
this space and sending a clear message to our competitors,
particularly those coming out of Beijing.
Now, I want to look back just a little bit and say, in
2019, the reauthorization made an impact and we saw change in
behavior. Do you see any of these same changes in behavior from
what the Eximbank is doing now that is helping us counter
China's influence?
Ms. Lewis. Absolutely. When I have--as we have been ramping
up the work that we are doing in CTEP, the numbers that have
been--we have been discussing around the wireless, over $542
million energy storage, $195 million renewable energy over--the
largest deal we did, which was in Angola for $962 million, all
of those came under the CTEP mandate. I think that what we
are--what others are seeing, and it bears out no matter where I
am traveling to, that Eximbank is a force to now be reckoned
with.
Mr. Nunn. I like to hear that.
Two things real quick. Department of Commerce is working on
American dual-use technologies. I want to thank military
capabilities here, AI, hypersonics. How does your team
coordinate with Commerce on that?
Ms. Lewis. We work with Commerce very, very closely. As you
know, Secretary Raimondo is ex-officio on our board, but we
work very closely with all units in the Department of Commerce,
as well as other interagency partners. We believe working
together as a whole of government allows all of us to be a
force multiplier for the work that we are doing.
Mr. Nunn. You have the connective tissue you need there to
be successful. You agree with that? You have the connective
tissue there with Commerce to make that successful?
Ms. Lewis. Yes.
Mr. Nunn. Good.
Hey, last question real quick. Your foreign export credit
competitors have been accused of unfair practices to gain
advantage. Does that compete with U.S. agencies at all?
Ms. Lewis. There are definitely unfair practices
throughout, especially with the PRC.
Mr. Nunn. Copy that.
Thank you very much, Mr. Chair. I yield my time.
Chairman Luetkemeyer. Copy that. All right. Way to go, Mr.
Nunn.
With that--do you have a question?
We will recognize the ranking member for a point of
personal privilege here.
Mrs. Beatty. Thank you so much and thank you again to our
witness and to my colleagues.
I have a distinct honor today to have in our hearing room
from my district the recipient first place of my congressional
Art Competition, Olivia. So we want to congratulate you. She
has her sibling and her parents, also a small business owner.
So I invited them to come in because her mother, who is a
physician, also has a small business downtown. Madam--President
Chair, she might also have a product that, as a small business
owner, that might be eligible to be in your export-import.
Thank you, Mr. Chairman. I yield back.
Her father is also here. So I wanted to make sure you knew
both her parents were here.
Chairman Luetkemeyer. Well, congratulations. I will have to
go by the long wall and take a look at your masterpiece. Thank
you for being here today.
I have one more question, and I want to put a little piece
of information on the record right quick while we have you
here, Ms. Lewis, and that is with regards to Eximbank statutory
underwriting standard, a reasonable assurance of repayment,
versus the Department of Energy loan program. Their
underwriting standard is reasonable probability of repayment.
I realize that is cutting hairs. Again, that is what we do
around here. The words mean something, but this does have a
significant effect. Again, I think--I guess my question is
going to be, can we--would you support changing it from
assurance to probability so that you can have more flexibility
and be able to compete better with the--in the CTEP stuff?
Ms. Lewis. The standard that I underwrite, you are
absolutely correct, Mr. Chairman, is the reasonable assurance
of repayment, because that is the stem that Congress has asked
us to be--to be able to make sure that we have bankable
commercially viable deals, and we look forward to working with
the committee on any measure that you would want to put forth
to Eximbank.
Chairman Luetkemeyer. Well, I think that is a good place to
start for some of the negotiations when the reauthorization
starts, because I think you need the flexibility to, again, be
able to compete, and that is what we are talking about here
today is being able to compete with China and allow the
Eximbank to be a partner in that.
With that, I would like to thank Ms. Lewis for being here
today and your testimony. I appreciate you working with us
through our vote series.
Without objection, all the members will have 5 legislative
days within which to submit additional questions for the
witness to the chair which will be forwarded to the witness for
her response. I ask the witness please respond as promptly as
you can.
[The information referred to can be found in the appendix.]
With that, the hearing is adjourned.
[Whereupon, at 12:44 p.m., the subcommittee was adjourned.]
A P P E N D I X
June 27, 2024
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