[Congressional Record Volume 161, Number 115 (Wednesday, July 22, 2015)]
[Extensions of Remarks]
[Pages E1097-E1098]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           EXPORT-IMPORT BANK

                                 ______
                                 

                               speech of

                           HON. DAN NEWHOUSE

                             of washington

                    in the house of representatives

                        Wednesday, July 15, 2015

  Mr. NEWHOUSE. Mr. Speaker, tonight we've heard from Representatives 
from all over the country--from my home state of Washington, to 
Oklahoma, to Florida--about the economic importance of the Export-
Import Bank to our nation. Before we conclude for the evening, there 
were three other topics I wanted to discuss--wine, music stands, and 
mint oil. As unrelated as these three things sound, they have a couple 
of important commonalities. First, these are small businesses in 
Washington State that create all three of these products. L'Ecole 
Winery in Walla Walla makes a fantastic, award-winning Bordeaux blend, 
and sells their wines in over 20 countries. I had the chance to 
recently tour the Manhasset Specialty Company, located in Yakima, 
Washington, which manufactures and sells the gold-standard of music 
stands the world over. Norwest Ingredients, a company located in Royal 
City, Washington, grows and refines mint extract, and sells it around 
the globe to food and pharmaceutical producers for flavoring.
  The other thing these three businesses have in common, besides making 
some of the best products in the world, is that they all use Export-
Import Bank financing to share their products with the world. They are 
great examples of small businesses utilizing the Bank--and for the 
record, they are definitely small businesses, employing a total of 43 
full-time employees between the three of them, and that number is 
growing. In fact, to clear up a common misconception about the Ex-Im 
Bank, in fiscal year 2014, an astounding 89% of the Export-Import 
Bank's loans were to small businesses. When these small businesses are 
seeking to export their product--that is, to grow their businesses and 
create jobs--they often need financing to do that. However, selling 
your product in Sidney or Seoul is not the same thing as selling it in 
St. Louis or San Francisco. When selling overseas, under a different 
set of laws, sometimes there's little recourse if you have issues with 
getting paid for your goods. Or say there's a natural disaster or labor 
dispute--how then can you access your product or the money you're owed? 
When your product spends six weeks on a barge, and your money is locked 
in that product in a crate, sometimes you need capital that's just not 
accessible. In some countries, just to access their markets and sell 
your products you have to have an insurance guarantee from your home 
country. And that's where the Export-Import Bank comes in.
  The Export-Import Bank supplements private financiers, providing 
direct loans, working capital, loan guarantees, and other forms of 
financial insurance, allowing these businesses to reach markets and 
sell goods they would be unable to otherwise.
  Critics on one side argue this simply means these ventures are too 
risky, and shouldn't be entered into if private financing can't handle 
the job. On the other side, they argue the reason private financiers 
can't handle it is because Ex-Im crowds them out of the market, 
offering rates private finance can't compete with. But, if we look at 
the evidence, we can see both of these claims are just not true. If the 
Export-Import Bank backed inherently risky ventures, then how do we 
account for the 0.175% default rate on Ex-Im loans? This rate is far 
below the standard market rate, meaning that the Bank's loans are 
careful, and judicious with taxpayer dollars. As for the Export-Import 
Bank crowding private lenders out of the market, right now Ex-Im 
requires in its charter that the Bank only, and I quote only, 
``supplement and encourage, and not compete with private capital.'' It 
also requires that the Export-Import Bank provide an annual report to 
Congress with a breakdown of all of their loans, demonstrating that 
private lenders were either unable or unwilling to offer these loans.
  However, I would agree with critics that this isn't enough, and we 
should go further. That's one of the reasons I'm a cosponsor of Mr. 
Fincher's Export-Import Reform legislation, H.R. 597, the Reform 
Exports and Expand the American Economy Act. Mr. Fincher's bill 
reiterates that the Export-Import Bank is the ``lender of last resort'' 
to companies, and that companies seeking credit must demonstrate 
they've tried to procure private financing before they can even be 
considered for Ex-Im financing.
  Mr. Fincher's Export-Import reform bill would make other positive 
changes to the Bank as well. It would require the Government 
Accountability Office (GAO) to regularly audit Ex-Im's fraud control 
measures, as well as their loan, insurance, and guarantee programs. 
This legislation would require that the Bank's Board of Directors 
publish an annual list of countries that loan participants should not 
be doing business with, whether it's because they violate human rights, 
aid our nation's enemies, or for other foreign policy reason. These are 
good, ethical reforms that should be made. The reform legislation would 
also impose capital reserve requirements on Ex-Im so that, while 
unlikely, should a financial crisis affect the Bank, it will have 
strong capital reserves to protect taxpayer dollars.
  Mr. Speaker, my colleagues and I aren't asking for a straight 
reauthorization of Ex-Im--we think there are improvements that can and 
should be made to the Bank. And we would love to work with those who 
are critical of the Export-Import Bank to join us in reforming the Bank 
so that it's more accountable, it's more supportive of the free market, 
and is a better steward of taxpayer dollars.
  Speaking of taxpayer dollars, there's another common myth about the 
Export-Import Bank that I would like to clear up. Critics of the Bank 
claim that it's a huge consumer of taxpayer dollars, and that it 
constantly risks those funds. However, this couldn't be further from 
the truth. When a business takes out a loan, just like everyone else, 
they have to repay that balance with interest--and that's where the 
Export-Import Bank, like any other lender, makes its revenue.
  To quote from a June 17, 2015 Congressional Research Service report, 
``Ex-Im Bank's activities in FY2013 were estimated to reduce the budget 
deficit by $1 billion in FY2013, and are estimated to reduce the budget 
deficit by $570 million in FY2014.''
  Let me repeat that to let it sink in--two years ago, Ex-Im reduced 
our federal deficit by a billion dollars, and last year it reduced it 
by $570 million. Some of the most ardent critics of the Bank are fellow 
conservative friends of mine, who are just as concerned with federal 
spending as I am. That's why I have a hard time understanding how they 
can advocate for ending a program that is helping to curb our deficits 
by half a billion to a billion dollars annually.
  Another misconception I'd like to address is that allowing Export-
Import Bank to permanently expire won't cost our country jobs--it 
certainly will. It's estimated that every year, Ex-Im helps our 
nation's businesses support about 167,000 jobs. To put this into 
perspective, that's more than half the population of St. Louis, 
Missouri. Those are jobs we will be forfeiting if we allow Ex-Im to 
permanently expire.
  Moreover, allowing expiration of the Export-Import Bank will put our 
nation at a permanent trade disadvantage. Currently, every other nation 
in the Organization for Economic Cooperation and Development (OECD) has 
their own Export-Import Bank to support their country's producers--
Britain, Korea, Mexico, Italy, Estonia--you name it. And some of them 
are enormous. Germany's bank backs $22.6 billion in exports annually--
significantly more than the U.S.'s average of $14.5 billion. And 
China's is off the charts--backing $45.5 billion in exports annually. 
For those of you keeping track, that's over three times the size of our 
Bank.
  In fact, the Chairman of India's Export-Import Bank in a recent 
interview with Business Insider was asked for his thoughts on the U.S. 
Bank expiring. His response? ``With the U.S. Ex-Im Bank closing down, 
we would now have more market, because Indian products were competed by 
U.S. products.'' Right now, these other nations are looking for every 
advantage they can get for their businesses to grow their economies, 
and they see the U.S. willingly retracting from the global stage and 
conceding market share. If we would like to maintain U.S. strength 
abroad, allowing expiration of the Export-Import Bank is a poor 
strategic decision.
  Mr. Speaker, in conclusion, now is the time to reform and reauthorize 
the Export-Import Bank, and I encourage House leadership to allow us to 
vote on its reauthorization as soon as possible. The Export-Import Bank 
helps our nation's small businesses grow and create jobs. It reduces 
our nation's federal deficit, and makes us more competitive on the 
global stage. Could it use reforms? Certainly--there isn't an 
institution out there that couldn't, and

[[Page E1098]]

I'd love to work with my friends who are critical of the Bank to see 
these reforms put in place. But we can't willingly remove tools from 
our arsenal if we want to keep our great nation strong and competitive 
for decades to come.

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