[Congressional Record Volume 168, Number 26 (Wednesday, February 9, 2022)]
[Senate]
[Pages S585-S586]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                      Nomination of Reta Jo Lewis

  Mr. TOOMEY. Mr. President, I rise today to discuss the nomination of 
Reta Jo Lewis to serve as the President and Chair of the Ex-Im Bank of 
the United States. It is my understanding that we are likely to have a 
vote later today on her confirmation, and I want to address this.
  And let me start by underscoring why, frankly, I don't think we 
should have an Ex-Im Bank, and let me explain why. First of all, let's 
start with the Ex-Im's claim about how it does business. The Ex-Im Bank 
maintains that, when it provides financing for these transactions that 
it engages in, it only takes risks that private lenders are either 
unable or unwilling to take.
  Now, we ought to stop ourselves right there and say: Well, wait a 
minute. If the private sector is not willing to take these risks, why 
should we force taxpayers to take these risks--because the Ex-Im Bank 
is, of course, backed by American taxpayers. So that is question No. 1.
  But it actually gets worse than that. The Ex-Im Bank also insists 
that it only makes safe bets; it only engages in very low-risk, safe 
transactions. But, of course, it is impossible to do both, right? Ex-Im 
can't only take transactions so risky that no one else will do them but 
at the same time only do safe transactions. That is an obvious 
contradiction, and that is a contradiction that is at the heart of Ex-
Im's business model.
  So how do they do business? The reason they do business is they 
systematically underprice the risk. That is why Ex-Im gets the 
transaction instead of the private sector. That is why borrowers go to 
Ex-Im instead of any number of private financial institutions that are 
happy to offer the deal but only under terms that generate an adequate 
return on the risk.
  This is why, for instance, the largest, most successful, most 
profitable banks in America go to Ex-Im for loan guarantees--because 
Ex-Im's terms are too good to be true, at least too good to be true in 
the private sector.
  Let me just give a very recent example of just how egregious this is. 
In 2021, the Ex-Im Bank financed a deal in which they guaranteed an $82 
million loan made by JPMorgan, the bank, to Qantas, the Australian 
airline, for the purpose of buying jet engines from General Electric. 
Now, let's think about this. We have JPMorgan, the largest bank in 
America--extremely profitable, enormously successful, all the capital 
in the world. We have Qantas, which is one of the most successful and 
profitable airlines in the world. They are the largest airline in 
Australia. And, of course, General Electric is one of the largest 
industrial companies in the world.
  Can anybody actually, with a straight face, suggest that any of these 
companies can't borrow money privately? Seriously? All three of them 
access the capital markets every day. They have access to all the 
financing in the world. Yet taxpayers guaranteed this transaction 
because it was available. They don't need any subsidy from American 
taxpayers, none whatsoever. Yet this is what Ex-Im does.
  Now, one of the claims that we hear from Ex-Im and from some 
supporters of Ex-Im is that Ex-Im plays an essential role; without 
them, we just wouldn't have the exports that we have; we depend on Ex-
Im to export products.
  Well, the problem with that argument is the vast, overwhelming 
majority of American exports are done without Ex-Im. Now, we went back 
and looked at the annual export data from 2007 through 2020. In that 
period of time, the highest percentage of U.S. exports that were 
financed with Ex-Im financing happened to be in 2012. Do you know what 
that percentage was? It was 2.3 percent. That is the value of the 
exports that were financed by Ex-Im Bank.
  And that was, by the way, when Ex-Im had everything going for it. It 
was fully operational. It had a quorum on the Board. It had not reached 
its lending limit. So it was doing business without constraints. Yet it 
does this little, tiny sliver of American exports.

  The fact is, we are the second biggest exporting economy in the world 
behind China. The United States is No. 2 in total exports of goods. We 
are No. 1 in the world in terms of value added, and we do it almost 
entirely without Ex-Im financing--at least 97.7 percent in Ex-Im's best 
year. So the argument that somehow American exporters need Ex-Im to 
survive is patently false.
  It gets worse, though. Now Ex-Im wants to expand into domestic 
financing. Ex-Im has been tasked by the Biden administration with 
developing a new domestic financing program to expand the reach of the 
Bank. The proposed domestic financing program would support creating or 
expanding domestic manufacturing businesses and infrastructure projects 
as long as there is the expectation that some arbitrary portion of the 
goods will ultimately be exported.
  Can you imagine? So now the Ex-Im Bank is going to provide domestic 
financing. Gee, if only we had banks in America. If only we had capital 
markets in America so that we could provide financing for these 
transactions. No, we need the Ex-Im Bank to do it. We need taxpayers to 
go into the domestic banking business, on top of everything else.
  It is unbelievable. This isn't just mission creep. This is like 
mission sprint. Of course, it completely subverts the congressional 
intent. The intent was to match financing that is provided for exports 
around the world. This has nothing to do with that. There is no reason 
in the world that Ex-Im should be providing domestic financing--none. 
We live in the most developed capital markets of the world. We have a 
huge, enormously successful banking system. There is absolutely no need 
for this. And the only way they will get business is to, once again, 
underprice the risk so that taxpayers do not get properly compensated 
for the risks that they take.
  Now, let me get to the specifics of our nominee. I am concerned that 
Ms. Lewis is not going to protect the U.S. taxpayers from this 
inherently risky construct. For one example, the Biden administration 
has suggested doubling Ex-Im's statutory default cap from 2 percent to 
4 percent. So what does this mean? So under current statute, Ex-Im has 
got a limit of how much of its balance sheet can be in default. It is 2 
percent.
  Well, lately, the default rate has been creeping up. In fact, it has 
tripled, and it is very close to 2 percent. So the obvious solution is 
to do something about the credit quality of the balance sheet, but that 
is not the Biden administration's solution. They just want to double 
the permissible amount of losses. Well, I have no reason to believe 
that Ms. Lewis would object to that at all.

[[Page S586]]

In fact, I suspect she would embrace that.
  I am also concerned about the background she brings to this job. Ms. 
Lewis does have some experience in international policy, but she does 
not have the financial background that should be a prerequisite for 
serving as the President of a big bank. And without such a background, 
she is going to inevitably rely heavily on Ex-Im's staff. As I said, I 
am very concerned that she is going to support this domestic financing 
program of the administration.
  So for these reasons and others, I am urging my colleagues to vote 
against the confirmation of Ms. Lewis as President of the Ex-Im Bank.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arkansas.
  Mr. COTTON. Mr. President, I ask unanimous consent that Senator 
Murray and I be allowed to complete our remarks before the scheduled 
rollcall votes.
  The PRESIDING OFFICER. Without objection, it is so ordered.