CRAPO STATEMENT AT EXPORT-IMPORT BANK REAUTHORIZATION HEARING
January 28, 2014
WASHINGTON – U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, today delivered the following remarks during a Banking Committee hearing entitled “Oversight and Reauthorization of the Export-Import Bank of the United States:”
Thank you, Mr. Chairman. Today, we will review the activities of the Export-Import Bank of the United States as the Banking Committee prepares to consider this year’s reauthorization of the Bank’s charter.
United States exporters are able to compete very effectively in international markets on the basis of price and quality. However, when aggressive foreign governments provide subsidies as a matter of policy or general practice to their exporters, U.S. exporters are placed at a competitive disadvantage purely because of such financing arrangements.
Relative to the size of their economies, certain European governments use export credit agencies to provide three times as much official credit as the Bank does—China and India provide four times as much. Countries like China institutionalize protectionist policies at the direct expense of other nations trying to keep up with China’s ability to draw on vast foreign reserves to crowd out its trade competitors in foreign markets.
One of the roles the Bank plays is to level the playing field for U.S. exporters by countering the public financing made available by foreign governments. The last reauthorization called upon the Treasury Secretary to engage in international negotiations to ultimately eliminate official export credit activity globally.
I am interested in hearing what steps the bank can take to assist the Secretary, and what steps the Bank can initiate independently with its international counterparts to jointly reduce international subsidies.
In the 2006 reauthorization, I worked on a number of provisions to make sure the small business community has an advocate to help address its needs and concerns. However, the Bank historically has had trouble meeting its 20 percent small business mandate in terms of authorizations, as opposed to sheer number of transactions.
Small and medium business transactions account for more than 85 percent of the Bank’s transactions, but still fall short in amount of money lent. My question for Chairman Hochberg is what additional changes are necessary to improve the Bank’s programs for small- and medium-sized businesses to achieve their needs? It is precisely these companies that operate at the heart of the US economy, and exporting to new markets is essential for their growth and job creation. With the most recent increase in its authorization level, the Bank will be pressed to work harder than ever to meet its congressional mandate.
Medium-sized businesses, which tap the Bank’s medium term direct lending program that supports transactions in the five-to-seven year and $50-$75 million range, actually seem to be getting squeezed between the small business mandate and the Bank’s larger loan portfolio. This occurrence is causing the Medium Term program to dramatically shrink to the point of no direct loans being made whatsoever last year.
As we look at ways to improve efficiency and reduce costs through all government programs, Chairman Hochberg should be commended for holding the Bank’s default rate to a level under that of commercial banks, while each year depositing hundreds of millions of dollars into the U.S. Treasury’s general fund for the benefit of the American taxpayer.
I look forward to working with the Chairman and all members of the Committee to develop a bipartisan plan for the Bank’s upcoming reauthorization that will make a real commitment to small- and medium-sized businesses, while continuing to ensure that any risk to the American taxpayer is minimized.
Thank you, Mr. Chairman.