[Congressional Record Volume 168, Number 56 (Wednesday, March 30, 2022)]
[Senate]
[Pages S1845-S1847]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
Nomination of Judith DelZoppo Pryor
Mr. TOOMEY. Mr. President, I rise today to discuss the nomination of
Judith Pryor to serve as First Vice President of the Ex-Im Bank of the
United States. Now, the Ex-Im Bank was established to help U.S.
exporters by providing financing to foreign buyers of U.S. products.
I have always been very skeptical about the merits of this mission,
and I remain skeptical to this day. Ex-Im claims that it only takes
risks that private lenders are unable or unwilling to take. That is a
central message of the Ex-Im Bank.
We should stop ourselves right there and ask ourselves a question: If
private lenders are unwilling or unable to take a particular risk, why
should taxpayers be forced to take that risk?
And, at the same time, Ex-Im also claims it only makes safe bets. Mr.
President, that is a complete contradiction. It is impossible to do
both. Ex-Im can't only take transactions so risky that no one else will
do them and, at the same time, only be doing safe transactions. It
doesn't make any sense at all.
The fact is, Ex-Im wins business by systematically underpricing risk.
That is why borrowers go to Ex-Im instead of any number of private
institutions that wouldn't offer deals on the same terms that Ex-Im
offers. That is why our largest banks go to Ex-Im for loan guarantees.
The Ex-Im terms are too good to be true--at least too good to be true
in the private sector. And that is evident by the kinds of transactions
that Ex-Im approves.
Consider just last year: Ex-Im financed a deal guaranteeing an $82
million loan from JPMorgan to Qantas airline for the purpose of buying
jets made by General Electric. Now, let's think about this. JPMorgan is
the largest bank in America, one of the largest banks in the world.
Qantas is the largest airline in Australia. And General Electric is one
of the largest industrial companies in the world.
Why did these companies need the American taxpayer to subsidize a
deal among the three of them? The obvious answer is they don't. These
are some of the biggest, most sophisticated companies in the world, and
they have complete access to global capital markets every day of the
week. They didn't turn to Ex-Im because they were unable to secure
private financing. They turned to Ex-Im because they got a better deal
than they would get in a strictly private transaction.
Now, as if that isn't galling enough, Ex-Im has now decided that
American markets can't meet our domestic financing needs--purely
domestic. I remind you, the U.S. capital markets are the largest,
deepest, most sophisticated capital markets in the world by far. Anyone
with a bright idea and a business plan can raise capital in the United
States. They do it every day.
According to the Securities and Exchange Commission's Office of Small
Business Capital Formation report for fiscal year 2021--last year--
there were $2.2 trillion in private offerings of debt and equity and
$1.7 trillion in initial public offerings and other registered
securities. So that is almost $4 trillion of capital markets activities
in the United States. That is how big our capital markets are.
[[Page S1846]]
And then, separate from that are the banks. According to the Fed,
there are about $2\1/2\ trillion in outstanding commercial and
industrial loans as of March 16.
My point is, the United States is not an economy that is starved of
capital. It is awash with cash. Nevertheless, despite that, the Biden
administration has instructed Ex-Im to develop a new Domestic Financing
Program to expand the reach of the Bank into a whole new direction.
This proposed Domestic Financing Program would support creating or
expanding domestic manufacturing businesses and infrastructure projects
as long as there is some expectation that some arbitrary portion of the
goods produced will be exported. And this can even include indirect
exports. So, in other words, an Ex-Im finance manufacturer won't have
to export a thing if he can claim that his customers will.
This is unbelievable. This is well beyond mission creep. As George
Will observed in the Washington Post today, this is ``mission gallop.''
And a program like this clearly subverts congressional intent and
strains--and ``strains'' is a polite way to put the interpretation of
Ex-Im's charter. And it does so to such an extent, really, I think, to
make the charter basically meaningless.
There is no need--there is no reason--for Ex-Im to be providing
domestic financing, none. As I said, we live in a highly developed
market economy, like the most developed market economy in the world,
and promising businesses have access to capital on competitive terms.
And just like all of Ex-Im's other programs--maybe even more so--the
only way Ex-Im is going to win business in the domestic financing is if
it either finances bad deals that the private sector wouldn't touch or
it underprices the risks so that it is more attractive than the private
financing.
So, earlier this month, I sent a letter to Ex-Im's President and
Board Chair Reta Jo Lewis, and I requested that Ex-Im respond to a
series of questions I have about this unprecedented new direction the
administration wants to send the Ex-Im Bank. I also asked to withhold
Board consideration of this Domestic Financing Program at least until
there is a comprehensive framework that is published for notice and
comment.
Before the Board votes to launch this whole new category of business
at Ex-Im, shouldn't we all see: How is this program actually going to
work? How expansive will it be? How expensive will it be? How many
private lenders will be elbowed aside so that Ex-Im could be doing
loans private banks would otherwise be doing?
And none of this has been spelled out. We don't have any answers to
these important structural questions about this program. Yet my
understanding is they are going to go ahead and launch this.
So I sent this letter. Ex-Im responded to my questions, but they
remained completely silent on my request to withhold Board
consideration until there has been public discussion and debate about
the specifics of this framework.
Only 3 days after I got the Ex-Im response to my questions, they
noticed a Board of Directors meeting for April 14, at which they intend
to consider and probably approve this Domestic Financing Program.
Now, this leads me to the reason that our Democratic colleagues want
to push Ms. Pryor's nomination through urgently. See, it is my
understanding that the Ex-Im Board needs at least three Senate-
confirmed nominees in order to change its existing policies--certainly
a policy as big as this one. Ex-Im only has two Senate-confirmed Board
members now. So without Ms. Pryor, they couldn't launch this whole new
program, which is a terrible idea in the first place.
So that brings me to Ms. Pryor. My concern with her is that she will
continue to support, first, what I think is the unacceptable practice
of Ex-Im providing taxpayer-funded subsidies to some of the world's
largest and most well-capitalized companies, and I fear that she will
move Ex-Im in the direction of supporting this whole new Domestic
Financing Program.
Ms. Pryor has previously served on Ex-Im's Board, and during that
time the JPMorgan-Qantas-General Electric deal that I mentioned earlier
was a deal that she supported.
I asked Ms. Pryor a simple question during her nomination hearing, by
the way. I said: Do these large, sophisticated American companies have
access to private capital? She acknowledged that that is a simple
question, and she refused to answer it. Now, why would she refuse to
answer such a simple question for which the answer is obvious? It is
because she didn't want to admit that these giant multinational firms
obviously do have access to private capital, to alternative financing,
and she didn't want to acknowledge that, despite that, Ex-Im still did
the deal.
I am also concerned about another issue, which is the weakening of
one of the very few taxpayer protections that is built into Ex-Im's
charter. The charter includes a 2-percent cap on the permissible
default rate. So no more than 2 percent of the assets on the books of
Ex-Im can be in default at any point in time without precluding future
lending. It puts a brake on Ex-Im expansion if they hit that 2-percent
threshold.
Well, guess what? Ex-Im's's default rate has trended toward that 2-
percent cap. It is not quite there yet, but it is getting very close.
That is why the President's budget requests that Congress temporarily
waive the cap. Rather than address the problems with Ex-Im's
deteriorating book of business, Ms. Pryor and the administration
support this deeply flawed request to just double the statutory
permissible default rate from 2 percent to 4 percent. How is that good
for taxpayers? It doesn't sound good to me.
Congress laid out a clear corrective measure in the event the default
rate cap is breached. That is, you freeze the book of business. You
acknowledge something is not going right. We have to fix that problem.
Is Ex-Im or the Biden administration proposing to fix the problem? No.
They just want to ignore it and just raise the cap, pretend it is not
there.
I will be the first to acknowledge Ms. Pryor is clearly a competent
person and well-qualified. She has a lot of experience. That is not my
concern about her candidacy. My concern is that nothing in the entire
nomination process--nothing in my discussions with her--has alleviated
my concern that she would advance this badly flawed agenda, which is
badly flawed in multiple ways, as I have laid out. It is also the case
that the Biden administration and its supporters need Ms. Pryor now in
order to advance this Domestic Financing Program.
For all of these reasons, I cannot support her candidacy, and I
encourage my colleagues to vote against Ms. Pryor.
I yield the floor.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. BROWN. Mr. President, I will be very brief. I know we have an
11:45 vote scheduled.
I urge my colleagues to join me in advancing the nomination of Judith
Pryor as Vice President of the Ex-Im Bank. I appreciate the ranking
member of the committee's comments about her qualifications. She is
clearly qualified.
What we need to always remember is our foreign competitors operate
more than 100 export credit agencies and credit programs supporting our
manufacturers. As if our policy has not been stupid enough as a
country--PNTR with China, which caused the hollowing out of community
after community in southwest Virginia and in my State and much of the
area throughout the Midwest--China's export finance activity is larger
than all of the export credit that G7 countries collectively provide.
China will continue to use export credit to win manufacturing
businesses in critical sectors.
In Ohio, we just lost two more light bulb manufactures, LED
manufacturers. The light bulb was invented by an Ohioan, Thomas Edison,
in a New Jersey lab. We used to lead the world. Now, 99 percent of LED
light bulbs are made in China. Does that not teach us something?
How about semiconductors? We invented semiconductors. We only make
about 10 percent of them in the country right now.
As First Vice President of Ex-Im, Ms. Pryor will help lead the
Nation's official export credit agency as it supports workers and
manufacturers throughout our country.
This is the most pro-worker President of the United States in my
lifetime. He puts workers at the center of
[[Page S1847]]
our economic agenda, our manufacturing agenda. We know what that means
for building middle-class lives. More to the issue, the Senate
previously confirmed Ms. Pryor to be a Board member of Ex-Im in July
2019, 77 to 19. More recently, she was advanced out of the Banking and
Housing Committee, which I chair, by a voice vote--12 Republicans, 12
Democrats--a voice vote. There was no objection, no dissension. The
Chamber of Commerce--not always an ally of the Biden administration--
the Chamber of Commerce supports Ms. Pryor. She worked with former
president Kimberly Reed, a Republican appointee; and current member
Spencer Bachus, a former Republican Congressman, to reopen Ex-Im to
full operations.
My interest in her is a national interest. My interest is also that
she is a native Ohioan. She hails from Richmond Heights, a Cleveland
suburb, with 25 years of international business, finance, and public
policy experience.
Don't be misled by attacks on Ex-Im's creation of a new financing
facility for U.S. exporters. They already have a quorum. She is not
essential for that quorum. She is essential because she is so darn good
in her job. Ex-Im President Reta Jo Lewis is doing exactly what
Congress--a majority of Congress, not unanimous, but a majority of
Congress--told the Bank to do when we reauthorized this charter in
2019: Help American exporters compete with China.
Our economy--this is almost hard to believe--I mean, it is hard to
believe--for the first time in 20 years, our economy is growing faster
than China's economy. That is because we are finally stepping up with a
real manufacturing policy. We are not asking Congress to waive any
rules. The Bank is required to show that its financing does not crowd
out financing from the private sector. It is essential that our
manufacturers have every tool at their disposal so they can compete
globally. That is why we need Judith Pryor at Ex-Im. I urge my
colleagues to join me in supporting Ms. Pryor's nomination.
I yield the floor.