[Congressional Record Volume 159, Number 102 (Wednesday, July 17, 2013)]
[Senate]
[Pages S5718-S5720]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                             Cloture Motion

  The PRESIDING OFFICER. Under the previous order, pursuant to rule 
XXII, the Chair lays before the Senate the pending cloture motion, 
which the clerk will report.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the nomination of 
     Fred P. Hochberg, of New York, to be President of the Export-
     Import Bank of the United States.
         Harry Reid, Tim Johnson, Benjamin L. Cardin, Christopher 
           A. Coons, Patrick J. Leahy, Charles E. Schumer, Ron 
           Wyden, Patty Murray, Heidi Heitkamp, Tom Udall, Martin 
           Heinrich, Jack Reed, Sheldon Whitehouse, Elizabeth 
           Warren, Richard J. Durbin, Kirsten E. Gillibrand, 
           Robert Menendez

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived.
  The question is, Is it the sense of the Senate that debate on the 
nomination of Fred P. Hochberg, of New York, to be President of the 
Export-Import Bank of the United States for a term expiring January 20, 
2017, shall be brought to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The legislative clerk called the roll.
  The yeas and nays resulted--yeas 82, nays 18, as follows:

                      [Rollcall Vote No. 175 Ex.]

                                YEAS--82

     Alexander
     Ayotte
     Baldwin
     Baucus
     Begich
     Bennet
     Blumenthal
     Blunt
     Boozman
     Boxer
     Brown
     Burr
     Cantwell
     Cardin
     Carper
     Casey
     Chiesa
     Coats
     Cochran
     Collins
     Coons
     Corker
     Crapo
     Donnelly
     Durbin
     Feinstein
     Fischer
     Flake
     Franken
     Gillibrand
     Graham
     Hagan
     Harkin
     Hatch
     Heinrich
     Heitkamp
     Heller
     Hirono
     Hoeven
     Isakson
     Johanns
     Johnson (SD)
     Kaine
     King
     Kirk
     Klobuchar
     Landrieu
     Leahy
     Levin
     Manchin
     Markey
     McCain
     McCaskill
     Menendez
     Merkley
     Mikulski
     Murkowski
     Murphy
     Murray
     Nelson
     Portman
     Pryor
     Reed
     Reid
     Rockefeller
     Sanders
     Schatz
     Schumer
     Scott
     Sessions
     Shaheen
     Stabenow
     Tester
     Thune
     Udall (CO)
     Udall (NM)
     Vitter
     Warner
     Warren
     Whitehouse
     Wicker
     Wyden

                                NAYS--18

     Barrasso
     Chambliss
     Coburn
     Cornyn
     Cruz
     Enzi
     Grassley
     Inhofe
     Johnson (WI)
     Lee
     McConnell
     Moran
     Paul
     Risch
     Roberts
     Rubio
     Shelby
     Toomey
  The PRESIDING OFFICER (Ms. Heitkamp). On this vote, the yeas are 82, 
the nays are 18. Three-fifths of the Senators duly chosen and sworn 
having voted in the affirmative, the motion is agreed to.
  Pursuant to S. Res. 15 of the 113th Congress, there is now 8 hours of 
postcloture debate equally divided in the usual form.
  Who yields time?
  If no one yields, the time will be equally divided.
  The Senator from Pennsylvania.
  Mr. TOOMEY. Madam President, I rise to speak for a few moments about 
the cloture vote we just had and the confirmation vote that is 
upcoming.
  First of all, let me start by saying I think Mr. Hochberg is a good, 
capable, and competent person. The point I am making is that the 
candidate for President of the Ex-Im Bank, for whom we just granted 
cloture and are likely to confirm, is a capable individual.

  I voted against cloture, and I am going to vote against this 
confirmation. It is not about him. I wish to explain what this is about 
for me and why I think this is a lost opportunity. Precisely, it is 
this: By invoking cloture, as we have just done, and confirming Mr. 
Hochberg, as we are no doubt about to do, I think we are going to miss 
a big opportunity to insist on some modest reforms that are necessary 
at the Ex-Im Bank and we are going to miss an opportunity to pressure 
the administration and the Ex-Im Bank to follow existing law in ways 
that are not currently being followed. I wish to touch on a couple of 
these.
  First of all, just by way of background, a reminder about the Ex-Im 
Bank: This is a taxpayer risk. This is a bank that makes taxpayer-
backed loans and guarantees to countries and companies that buy 
American products. In 2012 we reauthorized the ongoing existence of the 
Ex-Im Bank and increased its lending authority to $140

[[Page S5719]]

billion. Now, not only are taxpayers taking a risk every time a loan is 
made by the Ex-Im Bank, but the taxpayers are systematically being 
undercompensated for that loan. The pricing on these loans is 
necessarily not reflective of the full risk to the taxpayer. How do we 
know that? Because if they were fully pricing in the risk, then the Ex-
Im Bank wouldn't have a competitive advantage over other private banks. 
They would be more than happy to finance exports. In fact, the export 
bank exists for the purpose of subsidizing these exports, and they do 
it in the form of consciously and intentionally underpricing the loans 
so that the taxpayers do not get an adequate compensation and certainly 
not a market compensation for the risk they take. That is just the 
reality. That is the nature of the Ex-Im Bank.
  I would also point out that Ex-Im Bank's inspector general issued a 
report in September about some of the issues they discovered in the 
management of the Ex-Im Bank. They recommended that the Ex-Im Bank 
undergo stress testing. We require this of all of the big private 
financial institutions. They require that they go through all kinds of 
analyses about what would happen to their institutions under different 
economic and market circumstances that could occur, and then we 
evaluate how well they hold up to the stress of changes in interest 
rates, changes in economic conditions, and so on. The Ex-Im Bank has 
promised they will do this, but we haven't seen any results.
  The inspector general also suggested some at least soft limits on 
concentration because the Ex-Im Bank is massively concentrated in a 
single industry. Almost all of the financing it provides is in a single 
industry, and that creates a risk to the taxpayers, of course, if there 
is a problem in that industry. The Ex-Im Bank has rejected considering 
any concentration limits.
  The third thing I would point out is that the inspector general's 
report suggested that the board have more oversight authority. The Ex-
Im Bank has not agreed to increase the board's oversight authority.
  There is another problem with the Ex-Im Bank, it seems to me; that 
is, by its very nature it picks winners and losers in ways that are 
inappropriate. I will give a few examples. Because it is a government 
entity, it is ultimately controlled by the political class and its 
activities ultimately get politicized. It has already happened. For 
instance, in an entity that is supposed to be all about subsidizing 
exports for job creation purposes, there are mandates that a certain 
amount of their business has to be green activity. It has to be what 
some people think is acceptable or preferable in the energy space. That 
is a judgment which has nothing to do with maximizing overall exports. 
It is a political decision that is imposed on the Ex-Im Bank because 
politicians can. There is also a mandate on small business, which is to 
favor one sector over another.
  There was an amendment when we were considering this bill. One of our 
colleagues offered an amendment that would force the Ex-Im Bank to make 
sure a certain amount of their business was subsidized loans to African 
companies and countries. I am sure this Senator has a very sincere 
interest in supporting Africa in various ways. That is fine if he has 
that interest, but is the Ex-Im Bank the vehicle we are supposed to use 
to do that? Let's keep in mind that when we establish a minimum 
statutory lending hurdle for some geographical area and Ex-Im is not 
there, they have to lower their standards to reach that goal, so it 
increases taxpayer risk for this political goal.
  My point is that it is inevitable, it is guaranteed, it is already 
happening that this process becomes politicized, and that is not a good 
idea.
  There is another problem with the activity of the Ex-Im Bank, which 
is that taxpayer-backed loans and guarantees also inevitably help some 
American companies at the expense of others. That is the nature of 
this, and that is a problem. One clear example is commercial air 
carriers. We have American companies that are airlines, they are 
commercial carriers, and then there are foreign companies that do this 
as well, and they compete directly against American carriers. Well, if 
you are a foreign airline, you get the Ex-Im Bank subsidy loan to buy 
your aircraft, and if you are an American airline, you don't. This 
happens. It happened recently. Air India got a $3.4 billion loan 
subsidy from Ex-Im Bank so they can buy their aircraft, and Air India 
competes directly with American companies that are not eligible for the 
loans because it is not considered an export.
  These are the sorts of unintended consequences that occur when the 
government creates these mechanisms for meddling in the markets.
  By the way, under current law the Ex-Im Bank is required to provide 
an analysis and make the analysis public about any adverse impact on 
American companies when they engage in this sort of activity, and we 
haven't seen that analysis. In fact, we have a court decision that 
criticizes the Ex-Im Bank. The court of appeals found that they had, in 
fact, failed to comply with this law about assessing the negative 
financial impact on U.S. companies; nevertheless, they are continuing 
to make these loan guarantees in this context.
  All of these problems have been discussed in the past. We have had 
this debate before. One of the very constructive things we did in the 
2012 reauthorization of the Export-Import Bank was that we said: What 
is the reason--why do we do all of this? The proponents always give the 
same argument--it is always the same--and it is that other countries 
around the world do this to subsidize their exports, and if we don't 
subsidize ours we will be at a competitive disadvantage and we can't 
have that.
  That is the justification we always get. One can question the wisdom 
of that justification. We could have a big debate about that. But let's 
put that aside for a second because there is a potential solution to 
that problem. It is that in global trade talks and bilateral and 
multilateral trade talks, we, the United States--the world's biggest 
trading country, the world's biggest economy--could insist on a process 
by which we have a mutual wind-down of this economically unhealthy 
activity. The countries of the world that have these export-subsidizing 
banks could mutually agree to phase them out. Then we wouldn't have to 
do it because they do it, taxpayers wouldn't have this risk, and we 
wouldn't be unfairly benefiting some companies at the expense of 
others. We could phase this out.
  In fact, that is exactly what the 2012 authorization bill requires. 
It requires the administration to begin negotiating with our trading 
partners for a mutual phaseout of all export subsidies. I believe that 
is the right solution to this admittedly difficult problem. Let's all 
agree we are going to phase out this activity.
  Well, despite the fact that this mandate is in the reauthorization 
bill we passed a year ago--it is the law of the land--it is not 
happening. It is just not happening. There are no such discussions 
under way. There are no such negotiations. This is certainly not a 
priority of the administration's trading activity. I am not sure it 
exists at all as a priority. This is the main reason I came to the 
floor this morning and voted against cloture.
  Cloture--the requirement to get the 60 votes to cut off debate to 
then consider the vote on the underlying nominee--is a very important 
tool. If we had held 41 votes, 41 Senators who refused to agree to cut 
off debate, the administration would have been in a little bit of a 
pickle because by the end of this month, in the absence of a newly 
confirmed President, the Ex-Im Bank couldn't do any business. So what 
would have happened? Would the Ex-Im Bank have just shut down? No. That 
wasn't ever going to happen. But what might have happened is we might 
have had a discussion: Can we get the administration to actually begin 
the negotiating they are supposed to do under existing law? Could they 
please begin to observe the law? Could the Ex-Im Bank actually begin to 
respond to the inspector general's reports? And in the pressure, 
frankly, of this moment, I think we would have had progress. Instead, 
we have voted for cloture. I think later today we are going to vote to 
confirm the nominee, who, as I said, is a very capable, very competent 
individual. So none of this is going to happen. What we are going to do 
is confirm the status quo, continue business as usual, business as it 
has been.

[[Page S5720]]

  This, of course, occurs in a context, right? It occurs in the context 
of this argument we have been having about whether Republicans have 
been obstructing nominees, and I think, frankly, it infects the 
judgment about how Senators might consider voting on something such as 
a cloture measure. I would just remind everybody that going into this 
discussion earlier this week, the Senate had confirmed 1,560 of the 
President's nominees and was blocking 4--1,560 to 4. Some are 
suggesting that is an outrageous activity on our part because it denies 
the President the opportunity to assemble his team. Really? He has 
1,560 confirmed, and there are 4 we are holding. That works out to 99.7 
percent of the President's nominees confirmed, and we are portrayed as 
preventing the President from assembling his team. I completely reject 
that characterization. I think the President has enjoyed a tremendous 
opportunity and reality of getting his team in place, getting them 
confirmed.
  We ought not relinquish the power the Constitution gives to the 
Senate to advise and consent. Remember, the Constitution doesn't just 
say that the Senate shall advise, it says advise and consent. 
``Consent'' has a very specific meaning. If we do this automatically 
and routinely and we think that--I guess those who object to our 
approving 1,560 and objecting to 4--it seems to me the implication is 
that we are supposed to simply routinely rubberstamp everyone, there 
can't be any objections ever, whatsoever. That is not what the 
Constitution calls for. As a matter of constitutional principle, that 
is a very flawed analysis.
  I wanted to speak this morning because this is a very real, specific 
case of where, had we exercised more fully, in my judgment, our 
opportunity to deny cloture, we would have made a little bit of 
progress in better observation of existing law, further reducing risk 
the taxpayers take, and getting the Ex-Im Bank to comply with some of 
the recommendations in the inspector general's report. I wanted to 
share that.
  I know how this vote is going to go. I know Mr. Hochberg is going to 
be confirmed. I hope we will be able to make progress anyway, but I am 
sure we would have had a better chance of making meaningful progress if 
we had used this moment.
  As we consider future nominees, I hope we will remember that this is 
a fundamental and important role for the Senate to play--to use 
confirmation as a moment to focus the attention of the administration 
on what is important to our constituents, to our taxpayers, and I hope 
we won't relinquish that opportunity.
  I yield the floor.