U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

65–673 PDF 2011

THE ROLE OF THE EXPORT–IMPORT 

BANK IN U.S. COMPETITIVENESS 

AND JOB CREATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

INTERNATIONAL MONETARY 

POLICY AND TRADE 

OF THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

MARCH 10, 2011 

Printed for the use of the Committee on Financial Services 

Serial No. 112–15 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

SPENCER BACHUS, Alabama, Chairman 

JEB HENSARLING, Texas, Vice Chairman 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, North Carolina 

JUDY BIGGERT, Illinois 

GARY G. MILLER, California 

SHELLEY MOORE CAPITO, West Virginia 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

KENNY MARCHANT, Texas 

THADDEUS G. McCOTTER, Michigan 

KEVIN McCARTHY, California 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

NAN A. S. HAYWORTH, New York 

JAMES B. RENACCI, Ohio 

ROBERT HURT, Virginia 

ROBERT J. DOLD, Illinois 

DAVID SCHWEIKERT, Arizona 

MICHAEL G. GRIMM, New York 

FRANCISCO ‘‘QUICO’’ CANSECO, Texas 

STEVE STIVERS, Ohio 

BARNEY FRANK, Massachusetts, Ranking 

Member 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

ANDRE ́ CARSON, Indiana 

JAMES A. HIMES, Connecticut 

GARY C. PETERS, Michigan 

JOHN C. CARNEY, JR., Delaware 

LARRY C. LAVENDER, Chief of Staff 

(III) 

SUBCOMMITTEE ON INTERNATIONAL MONETARY POLICY AND TRADE

GARY G. MILLER, California, Chairman 

ROBERT J. DOLD, Illinois, Vice Chairman 

RON PAUL, Texas 

DONALD A. MANZULLO, Illinois 

JOHN CAMPBELL, California 

MICHELE BACHMANN, Minnesota 

THADDEUS G. McCOTTER, Michigan 

BILL HUIZENGA, Michigan 

CAROLYN MCCARTHY, New York, Ranking 

Member 

GWEN MOORE, Wisconsin 

ANDRE ́ CARSON, Indiana 

DAVID SCOTT, Georgia 

ED PERLMUTTER, Colorado 

JOE DONNELLY, Indiana 

(V) 

C O N T E N T S 

Page 

Hearing held on: 

March 10, 2011 ................................................................................................. 1 

Appendix: 

March 10, 2011 ................................................................................................. 29 

WITNESSES 

THURSDAY, MARCH 10, 2011 

Bhatia, Karan, Vice President and Senior Counsel, General Electric ................ 5 

Ickert, David, Vice President of Finance, Air Tractor, Inc. .................................. 9 

Law, Kevin S., President and Chief Executive Officer, Long Island Association 

(LIA) ...................................................................................................................... 10 

Scherer, Scott, Senior Vice President, Boeing Capital Corporation .................... 7 

APPENDIX 

Prepared statements: 

Miller, Hon. Gary G. ........................................................................................ 30 

Bhatia, Karan ................................................................................................... 32 

Ickert, David ..................................................................................................... 37 

Law, Kevin ........................................................................................................ 42 

Scherer, Scott .................................................................................................... 45 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Miller, Hon. Gary G.: 

Written statement of the Coalition for Employment through Exports 

(CEE) .............................................................................................................. 50 

Written statement of the National Association of Manufacturers (NAM) ... 56 

Written statement of USA Maritime .............................................................. 60 

(1) 

THE ROLE OF THE EXPORT–IMPORT 

BANK IN U.S. COMPETITIVENESS 

AND JOB CREATION 

Thursday, March 10, 2011 

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON INTERNATIONAL

MONETARY POLICY AND TRADE, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The subcommittee met, pursuant to notice, at 2 p.m., in room 

2128, Rayburn House Office Building, Hon. Gary Miller [chairman 

of the subcommittee] presiding. 

Members present: Representatives Miller of California, Dold, 

Campbell, McCotter, Huizenga; McCarthy of New York, Moore, and 

Perlmutter. 

Chairman MILLER OF CALIFORNIA. The hearing will come to 

order. Without objection, all members’ opening statements will be 

made a part of the record. 

We have agreed to 10 minutes on each side, appropriately yielded if anybody else shows up; and if nobody does, panel, that is not 

unusual. We have Floor debate occurring right now, and many 

members have meetings in their offices. So when you are having 

a hearing like this it is not uncommon to have a low presence. 

Members will come in and out as need be. 

We would like to welcome you here today. This is the first hearing in the 112th Congress for the Subcommittee on International 

Monetary Policy and Trade. This is, I believe, a very important 

hearing. We are going to be talking about the Export-Import Bank 

reauthorization. Even Federal Reserve Chairman Bernanke said 

that we need to sustain a period of strong job creation to establish 

true economic recovery, and I believe this is a place we need to look 

to. How do we increase imports in this country and become competitive globally? 

The Export-Import Bank effectively deals with about 175 countries. We have to ask, how can the banks better compete with foreign export credit agencies to ensure U.S. companies are not operating at a disadvantage against their foreign competitors. 

And if you look at the guidelines we use on how we loan, U.S. 

loans are made, has 15 percent or less foreign content to receive 

full financial transaction funding. The U.K. has 80 percent or less 

foreign content. Canada will make a loan if it benefits the country 

in some way. Australia has 50 percent or less foreign content. 

France has 40 percent or less EU content or 30 percent or less nonVerDate Nov 24 2008 17:26 May 04, 2011 Jkt 065673 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 K:\DOCS\65673.TXT TERRIE
2 

EU content. Germany has 40 percent or less EU content or 30 percent or less Japan, Switzerland, or Norway content. Italy, they will 

make a loan if it benefits them in some way. And Japan has 50 

percent or less content. 

So when you look at what the Export-Import Bank does, they 

have the most stringent requirement as far as content of any bank 

that applies these standards. Yet, we need to look at what the 

Bank does and how they can operate in a better way. Fiscal soundness has always been a priority for the Export-Import Bank. Can 

the Bank policies and programs ensure that the Bank continues to 

fund in a fiscally sound fashion? 

Since 1934, the Bank has had a default rate of about 1.5 percent. 

In the last 10 years, though, it has had a default rate of less than 

1 percent, which is significant in this economy. Last year alone, 

they returned $351 million back to the Federal Treasury. So this 

is an organization that actually makes money for the Federal Government, rather than costing the Federal Government money. 

The Bank does not compete against private capital. If private 

capital is available, they are the first to utilize that. If it is not 

available, then the Bank provides liquidity when other sources of 

capital are not available. 

Currently, they fund about 1.8 percent of all U.S. exports, not a 

tremendous percent, but it is a significant percent if you are the 

one wanting to export products and you need the money. Small 

businesses benefit tremendously from this. Eighty-seven percent of 

all the loans made by the Export-Import Bank are to small businesses. It only represents 20 percent of the funding level, but it is 

the majority of the type of loans they make. 

Is the Bank equipped to handle increased volumes in terms of 

staff and administration capability is a question we need to deal 

with and have answers to. Can direct selling, automated underwriting, or wholesale instead of retail expedite the process? Does 

the Bank need to reserve some of its excess receipts to make technology and other investments? 

Now, currently, about—of the $100 billion allowed to be lent by 

Ex-IM Bank, only $57 billion has been lent. A 5 percent reserve 

has been set up for those. What is the Bank’s level of support for 

specific infrastructures, industries, science technologies, IT firms, 

and the service industries? And how does the Bank content requirements hinder such support? 

I think we need to look specifically at, does the retirement of 85 

percent impact the ability of the Bank to lend? Does it have an impact on industry and companies who want to participate in the program, yet don’t have the ability to participate in the program because of the content requirement? 

There are a significant amount of issues we do need to look at. 

There are issues that we want to have answers that are going to 

be needed to be provided and many questions that you might have 

for us and we might have for you. But we need to look at the goals 

of the Export-Import Bank, the opportunity to provide more jobs in 

this country, the opportunity to become more competitive globally, 

how we go about doing that, and we need to dispel some of the concerns that some feel that the process of the Export-Import Bank is 

similar to a GSE and such. 

3 

The portfolio of the Export-Import Bank is tremendously diverse. 

Their default rate is minimal compared to what you see in the private sector. And had the Export-Import Bank not have been there 

in the last few years, it would have been problematic for many 

businesses to be able to continue in business and to be able to export goods, because liquidity was not there in the banking industry. 

So those are issues I would like to have addressed today in the 

hearing, and I will now yield to the ranking member. 

Mrs. MCCARTHY OF NEW YORK. Thank you, Chairman Miller; 

and I appreciate your words. 

Let me first begin by saying I look forward to serving with my 

colleagues and working in a bipartisan manner on the issues before 

us today, as well as other important issues this subcommittee will 

be addressing in the future. 

The last several reauthorizations of the Export-Import Bank that 

this committee addressed were the result of hard work done by 

members on both sides of the aisle with a degree of cooperation 

that allowed us to send a bipartisan bill to the House Floor. I am 

confident this subcommittee will once again produce a collective reauthorization bill that allows the Export-Import Bank to continue 

being a vital tool that moves the economy forward and does create 

jobs for our country. 

The global financial crisis has resulted in strained access to credit and fewer trade financing opportunities for American exporters. 

Through the financial crisis, the Export-Import Bank played a crucial role in assuring that export companies were able to continue 

operating, which maintained U.S. competition in the global economy. The work of the Bank was done at no cost to American taxpayers as the Bank is self-sustaining, funding its programs and administration costs from the fees paid by the returns of its investments. 

The Bank is also a key contributor to the implementation of the 

President’s national export initiative to double exports by the year 

2015. A key way to achieve that goal is to support small businesses, which are the engine of job and economic growth, in their 

efforts to broaden their consumer base through exports. To that 

point, the Export-Import Bank has made progress in outreach to 

small businesses. Just this year, they developed new products and 

improved existing products to better serve the needs of our small 

businesses. 

The Bank has made progress in other areas that were addressed 

through the 2006 reauthorization legislation. However, there is 

more work to be done; and, as Chairman Miller has said, there are 

questions to be answered. We want to make sure that whatever 

work that has to be done is done to ensure that the Bank continues 

to support economical growth and job creation, as well as the U.S. 

global export market. 

I look forward to hearing the testimony from each of today’s witnesses. I thank the witnesses for being here, especially on such a 

gloomy, rainy day. Hopefully, you all made it here all right; and 

I thank you for being here. 

Thank you, Mr. Chairman. 

Chairman MILLER OF CALIFORNIA. Thank you. 

Vice Chairman Dold is recognized for 21⁄2 minutes. 

4 

Mr. DOLD. Thank you, Mr. Chairman; and I want to welcome and 

thank all of our witness for your time and attention to this, what 

is a very important issue, the Export-Import Bank. 

The Export-Import Bank is a very important institution that ensures a more level playing field in a global marketplace. It helps 

create jobs in a country based on exports to other countries, which 

is an important national objective that both parties and the Administration can agree on. And the Export-Import Bank does this at 

zero cost to the American taxpayer. In fact, the American taxpayer 

clearly benefits by the Export-Import Bank returning billions of 

dollars directly to the United States Treasury and by ensuring that 

more Americans are working in the private sector. 

I hope that we can all agree that a prompt reauthorization is 

both beneficial and necessary. We also need to consider several 

other issues, including credit limits, context rules, and how we 

might encourage the Administration to appoint new directors to fill 

imminent board vacancies as they come up. 

I look forward to each of your testimonies, and I look forward to 

working with you. I yield back. 

Chairman MILLER OF CALIFORNIA. Mr. McCotter is recognized for 

21⁄2 minutes. 

Pass? Okay. 

I would now like to introduce the witnesses: 

Ambassador Karan Bhatia joined General Electric Company in 

2007 as vice president and senior counsel for international law and 

policy. At GE, he oversees the company’s engagement in public policy issues with government around the world and works to expand 

its presence in global markets. In November 2005, he was confirmed by the Senate to serve as Deputy U.S. Trade Representative 

overseeing U.S. trade policy in Asia and Africa. 

It is good to have you here today. 

Mr. David Ickert is vice president of finance of Air Tractor, a 

small business located in Olney, Texas, population 3,500, that manufactures agricultural and forestry firefighting aircraft. Mr. Ickert 

is a graduate of Olney High School and Midwestern State University. He has a bachelor’s degree in accounting and is a certified 

public accountant. 

Welcome. 

Mr. Kevin Law. In 2010, Mr. Law became president and CEO of 

Long Island Associates, which is New York State’s largest business 

organization. Previously, Mr. Law was president and CEO of Long 

Island Power Authority, the second-largest public utility in the 

country with over 1.1 million customers. Prior to approval as president and CEO, Mr. Law served as LIPA trustee and was appointed 

by Governor Eliot Spitzer as chairman of the board beginning in 

2007. 

Mr. Scott Scherer is senior vice president of Strategic Regulation 

Policy at Boeing Capital Corporation. He is also a member of the 

Aviation Working Group, a not-for-profit legal entity which 

proactively engages with the U.S. Export-Import Bank and other 

export credit agencies to ensure availability of adequate and reasonably priced financing for developed customers and regions. 

Welcome. Each of you will have 5 minutes. 

Mr. Ambassador, you are recognized for 5 minutes. 

5 

STATEMENT OF KARAN BHATIA, VICE PRESIDENT AND 

SENIOR COUNSEL, GENERAL ELECTRIC 

Mr. BHATIA. Thank you very much, Chairman Miller, Ranking 

Member McCarthy, and members of the subcommittee. Thank you 

for convening the hearing today on this very important topic. 

Sovereign-backed export finance has a fundamental and growing 

impact on international commerce and U.S. exports. In the competition for global markets, American companies and workers are 

increasingly competing with foreign companies armed with substantial, attractive government-backed export finance packages. 

In this highly competitive world, the U.S. Ex-Im Bank plays a 

critical role in supporting American exports and American jobs. 

GE, my company, provides a case in point. In 2010, Ex-Im helped 

finance $2.7 billion in GE sales to international markets, supporting more than $3.3 billion in U.S. exports. These were products 

ranging from heavy duty gas turbines to Saudi Arabia, to aircraft 

engines going to India, to MRI machines going to Brazil and 

Ghana. These export sales have helped support thousands of U.S. 

jobs in GE facilities from California to Michigan, from New York 

to Illinois, and from thousands of small and medium-sized enterprises and other suppliers in every State of the United States. 

Ex-Im is ably led and staffed by a team of dedicated, hardworking, and creative public servants. Their contributions go beyond merely supporting U.S. exports and jobs. Ex-Im, in fact, contributes to the U.S. Treasury, as the chairman noted, generating a 

surplus of several billion dollars over the past decade. 

But notwithstanding these efforts, Ex-Im unfortunately remains 

among the world’s least competitive export credit agencies. Ex-Im 

dramatically trails other ECAs in total funds authorized. Canada, 

for instance, a country less than a tenth the size of the United 

States, has more than triple the amount of export financing as the 

Ex-Im Bank. Japan has more than 5 times the amount, and China 

has an estimated 11 times. Moreover, Ex-Im is forced to labor 

under restrictions and processes that lessen its attractiveness and 

discourage many U.S. companies from accessing it. Ultimately, 

these constraints cost American exports and American jobs. 

To improve the effectiveness of the U.S. export finance system, 

we urge the Congress to focus on four priorities: first, reauthorization of Ex-Im with greater lending authority and streamlined congressional notification process; second, eliminating regulatory restrictions that weaken Ex-Im’s competitiveness, vis-a-vis other 

ECAs; third, vesting Ex-IM with a mandate to defend strategic 

markets for the United States; and fourth, improving Ex-Im’s accessibility. With your permission, I will talk briefly about each of 

these. 

First and foremost, we urge that Congress fully reauthorize ExIm for a period of 6 years. In addition, we would urge that Ex-Im’s 

total liability cap be increased from $100 billion to $200 billion. 

And it bears emphasizing that this increase in liability authority 

does not mean a $100 billion increase in total government spending. In fact, if history holds true, greater lending authority will, in 

fact, only result in an increase in their surplus, their return to the 

U.S. Treasury. 

6 

Second, for U.S. exporters to be globally competitive, we need ExIm to be as flexible and nimble as its global competitors. To that 

end, we would urge reform of three Ex-Im policies that diminish 

Ex-Im’s flexibility and weaken its competitiveness: 

Cargo preference requirements, Ex-Im’s national content requirements that the chairman alluded to in his openings remarks and 

the economic impact test. I have addressed all three of these bureaucratic obstacles to American business in my written statement, 

but in the interest of time, I will limit my oral comments just to 

the first point, cargo preference requirements. 

Under a long-standing requirement, almost any long-term export 

financed by Ex-Im must be transported on a U.S.-registered vessel. 

Congress imposed this requirement in the pre-World War II era to 

help build a U.S. merchant marine fleet. But both U.S. strategic requirements and the global shipping market have dramatically 

changed since that period, and today, there is an extremely limited 

number of U.S.-flag ‘‘break bulk’’ vessels in operation, and the result is transportation costs that are so high for transporting on 

those vessels as to nullify the benefits of Ex-Im financing. 

So, accordingly, we would urge that those cargo preference requirements be eliminated or, at the very least, that the additional 

costs imposed by those requirements be offset by the government. 

That was point number two. 

Point number three is, since the financial crisis, other governments have become far more aggressive and creative in using government-supported financing to win market share around the 

world. They are deploying more resources, using more forms of financing, and operating in areas where Ex-Im traditionally has had 

very little activity. Moreover, such foreign government financing is 

increasingly destined for projects in the United States. 

Historically, Ex-Im has matched foreign ECA financing offers 

that are outside the OECD framework only in rare situations and 

has refrained from financing projects in the United States all together. It has made very sparse use of its Tied Aid War Chest, and 

Ex-Im traditionally has had relatively little activity in regions of 

the world that may pose commercial risk but also present significant commercial and strategic opportunities, including portions of 

the Middle East and Africa. 

So, accordingly, we would urge that Ex-Im be directed to match 

financing offered by foreign governments competing abroad or in 

the U.S. home market where such financing is inconsistent with 

the OECD arrangement or where investment financing is being offered to win market share from U.S. competitors; that it make increased use of its Tied Aid War Chest; and that it facilitate specialized programs in countries or regions where the United States has 

a strong national interest, like Iraq, Afghanistan, and sub-Saharan 

Africa. 

Fourth and finally, Ex-Im remains underutilized by key sectors 

of the U.S. economy, including SMEs, manufacturing companies 

that have repeated exports of smaller value items—so-called flow 

businesses—and services providers. There are multiple reasons for 

this, including Ex-Im’s largely undifferentiated processes for both 

large and small transactions, its rules governing U.S. content, and 

its reluctance to take less than dominant positions— 

7 

Chairman MILLER OF CALIFORNIA. The gentleman will need to 

conclude. 

Mr. BHATIA. Thank you. 

To facilitate access by SMEs and flow businesses, Ex-Im should 

deputize more commercial banks, community and State banks and 

others, while setting appropriate transaction costs and fee-sharing 

arrangements to facilitate cooperation. 

Thank you very much, Mr. Chairman. 

[The prepared statement of Mr. Bhatia can be found on page 32 

of the appendix.] 

Chairman MILLER OF CALIFORNIA. Thank you, sir. 

Mr. Scott Scherer. 

STATEMENT OF SCOTT SCHERER, SENIOR VICE PRESIDENT, 

BOEING CAPITAL CORPORATION 

Mr. SCHERER. Chairman Miller, Ranking Member McCarthy, and 

members of the subcommittee, I am Scott Scherer, senior vice 

president, Boeing Capital Corporation, the financing arm of Boeing 

company. Thank you for this opportunity to testify on this important topic. 

I have an opening statement and request that my full written 

testimony be placed in the record. 

Chairman MILLER OF CALIFORNIA. It will all be placed in the 

record, without objection. Thank you. 

Mr. SCHERER. On behalf of Boeing’s 160,000 employees, 22,000 

small, medium and large U.S. suppliers to Boeing throughout all 

50 States, and the 1.2 million people working in our domestic supply chain, I am here to voice our strong support for the reauthorization of the Export-Import Bank of the United States. 

At a time of great debate over the role of government in our society, Ex-Im Bank stands out as the government institution that 

works and that provides real value to our Nation. The Bank’s financial instruments help American companies, their workers, and 

their suppliers compete in the global economy and, in so doing, increase American exports, create and preserve export-related jobs, 

help stabilize our economy during periods of tight credit, like the 

one we just experienced, and otherwise contribute to economic 

growth across the United States. And because the Bank charges exposure fees to its borrowers, it is not only self-sustaining but consistently earns a profit for U.S. taxpayers. It is a government program that helps lower the deficit, something I am sure you don’t 

hear all that often. 

On the issue of global competitiveness, the Bank plays a critical 

role. In the aerospace business, our chief competitor, Airbus, has 

three European export credit agencies supporting its sales. What’s 

more, the competitive landscape for our industry is about to get a 

lot more crowded. Companies in Canada, Brazil, China, and Russia 

are developing large commercial airplanes to compete against Boeing; and all of them have government export credit agencies to support them. Without Ex-Im, Boeing and its extensive U.S. supply 

chain would be at a significant disadvantage in a market we forecast to be worth $3.6 trillion over the next 20 years. 

On the issue of U.S. exports and the jobs they support, there is 

no question that Ex-Im helps drive U.S. exports. In Fiscal Year 

8 

2010, Ex-Im financing supported a record $34.4 billion in U.S. exports; and in calendar year 2010, Ex-Im financial guarantees supported sales of 161 Boeing commercial airplanes, roughly a third of 

all Boeing deliveries that year. 

Commerce Department figures show that aerospace exports support more than 770,000 U.S. jobs; and the aerospace sector each 

year produces a trade surplus, $53 billion in 2010, according to the 

Aerospace Industries Association. Those job and trade surplus figures are the highest of any U.S. manufacturing industry. 

I mentioned that Ex-Im supported one-third of our airplane deliveries last year. That was a higher percentage than we have seen 

historically because of abnormally tight commercial credit markets, 

which brings me to my next point, and that is the Bank’s vital role 

in helping to stabilize our economy in such economic conditions. 

Ex-Im Bank helped stem at least some of the bleeding brought 

on by the financial crisis by shoring up exports in very tough economic times, just as it was designed to do. Since 1992, according 

to the Bank, Ex-Im has returned roughly $5 billion to the U.S. 

Treasury. 

The Bank has a strong, diverse loan portfolio that presents little 

risk to the U.S. government and American taxpayers, particularly 

true for its portfolio of airplane loan guarantees. To date, the Bank 

rated default on commercial airplane loan guarantees as de minimus. 

Mr. Chairman, and members of the subcommittee, we have several recommendations for your consideration but will focus briefly 

on three of them. 

First, we recommend that you consider raising the cap on allowable financing by the Bank from the current level of $100 billion. 

Second, we recommend you consider lowering the 85 percent domestic content requirement for Ex-Im loans and loan guarantees. 

This foreign content rule does not adequately take into account 

21st Century supply chains, which are global in nature. This is an 

important competitive issue for U.S. exporters because U.S. domestic content is, far and away, the highest requirement among the 

world’s export credit agencies. 

Finally, we urge the subcommittee to press for resolution of a 

looming issue, and that is the vacancies on the Bank’s current 

board. Ex-Im Bank needs a quorum of three members to approve 

transactions; and unless these vacancies are filled soon, the Bank 

will not have a quorum come July, when only the chairman will remain in office. 

In conclusion, I want to reiterate how well the Bank serves the 

American public, helping U.S. companies, large and small, compete 

in the global economy, driving U.S. exports, creating good-paying 

jobs and economic growth and doing so with a net return to U.S. 

taxpayers. 

Boeing, the Coalition for Employment Through Exports, and 

many other companies look forward to working with the Congress 

to reauthorize the Bank. 

Again, thank you, Mr. Chairman. 

[The prepared statement of Mr. Scherer can be found on page 45 

of the appendix.] 

9 

Chairman MILLER OF CALIFORNIA. Thank you for your presentation. 

Mr. Ickert, you are recognized for 5 minutes. 

STATEMENT OF DAVID ICKERT, VICE PRESIDENT OF FINANCE, 

AIR TRACTOR, INC. 

Mr. ICKERT. Chairman Miller, Ranking Member McCarthy, and 

members of the subcommittee, thank you for allowing me to participate today. 

I am David Ickert, vice president of finance with Air Tractor. We 

are the other aircraft manufacturer on today’s panel; and we are 

located in Olney, Texas. 

I have submitted written testimony which responds to the questions that we had, so I won’t be redundant and go over a lot of 

those points. 

I would like to speak today about the experiences Air Tractor has 

had with Ex-Im and job creation, and these are experiences of a 

small business. I will emphasize that what I am about to say has 

nothing to do specifically with Air Tractor but more to do with 

what is being replicated by small businesses all over this country 

and the potential of small business exporters in exporting and 

working with Ex-Im. I think there is tremendous potential and ExIm Bank is vital to that community to realize the job creation potential that exists there. 

Air Tractor is a small business engaged in the manufacture and 

sale of agricultural airplanes—crop dusters, if you will—and forestry firefighting planes. We have been in business since 1972, and 

we are now 100 percent ESOP-owned. We have one location, in 

Olney, Texas. We employ approximately 225 people. Olney is a 

small rural town 100 miles west of Ft. Worth, and 200 miles east 

of Lubbock, with an approximate population of 3,000. 

In 1994, we decided that we needed to look beyond the U.S. borders for our market. At that time, we had about 10 percent of our 

sales moving in the export market. We knew we needed a mediumterm product—loan product to sell our airplanes on the international market. So after much searching and research, we discovered a couple of key partners. One is a commercial bank that we 

are still working with today—the same officers who have been wonderful to help us and been patient with us to bring us along in 

this—and the Export-Import Bank of the United States. Those two 

partners have helped us move forward in our quest to try and expand our international market. 

Since 1995, we have now completed over 80 medium-term transactions with the Bank. That first transaction in 1995 was two firefighting planes in Spain. For the calendar year 2010, we have completed 20 medium-term transactions with the Bank; and during 

this same period, from 1995 to 2010, we have seen our percentage 

of annual new plane sales and units move from 10 percent in 1995 

to 56 percent in 2010. And this included 14 different countries. 

As I said, we have done business with Ex-Im for 15 years and 

have completed those 80 medium-term transactions, 80-plus. To 

date, we have never submitted a medium-term claim to Ex-Im. 

They are there for that, but we have never done that. So Ex-Im has 

received our medium-term credit premiums through the years, but 

10 

they have never had to pay a claim. That is good business for ExIm, and it is good business for Air Tractor. 

I want to speak just a little bit about Olney, Texas. It is my 

hometown. It is a great place to live, and it is a great place to 

work, and it is a great place to raise your kids. However, when one 

thinks of originating export transactions, a small west Texas town 

doesn’t really come to mind. But I will remind you we have 225 employees; and at 56 percent, we have over 100 people in Olney, 

Texas, who today owe their jobs to exporting. 

As I have described it before, Olney is three red lights and a 

Dairy Queen; and the significance of this is that if we can create 

jobs on Main Street Olney through small business exporting, it can 

be done in small businesses from California to New York. If we can 

do it in Olney, Texas, we can do it all over this country. 

So what I would have to say to you today is, just for small business exporting, for job creation through exports, which has a tremendous potential in this country, we need Ex-Im, and we urge the 

reauthorization of Ex-Im. 

Thank you. 

[The prepared statement of Mr. Ickert can be found on page 37 

of the appendix.] 

Chairman MILLER OF CALIFORNIA. Thank you. 

It appears that you employ a large percentage of the adult population in your community. That is very impressive. 

Mr. ICKERT. That is a true statement, yes, sir. 

Chairman MILLER OF CALIFORNIA. I like that. My dad was from 

Sweet Home, Oregon, population 4,200. 

Mr. Law, you are recognized for 5 minutes. 

STATEMENT OF KEVIN S. LAW, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, LONG ISLAND ASSOCIATION (LIA) 

Mr. LAW. Thank you, Chairman Miller, Vice Chairman Dold, 

Ranking Member Carolyn McCarthy, and subcommittee members 

for the opportunity today to come and speak to you regarding the 

Export-Import Bank of the United States. 

My name is Kevin Law, and I am the president and CEO of the 

Long Island Association. The LIA is the largest business organization in the State of New York. Our membership includes thousands 

of businesses, both large and small; and we employ hundreds of 

thousands of employees. The LIA has been in existence for over 80 

years; and our mission is to lead and unify the region and strengthen Long Island as a place to live, work, and do business. 

Long Island, like the rest of the Nation, has suffered through the 

recent recession and has been plagued by falling home values, high 

unemployment, and businesses closing their doors. The Long Island 

economy is very much a small-business-driven economy. We have 

over 3 million people. If Nassau and Suffolk counties were a State, 

we would be bigger than 18 States; and we are located right outside the City of New York. 

But 90 percent of our businesses are companies that employ 20 

people or less, and it is estimated that our exports from Long Island are valued at over $10 billion. Increasing the export capabilities of the manufacturing sector of our economy would certainly be 

a boost to companies exploring new markets. 

11 

The LIA supports the reauthorization of the Export-Import Bank. 

I would like to thank Fred Hochberg, the chairman and the president of the Export-Import Bank, for helping many Long Island 

companies over the past few years. 

But, unfortunately, and despite the assistance from the good 

folks at the Bank to date, many smaller companies are still not 

aware of the Ex-Im or the services that they provide. Too often, 

small business owners are too caught up in the day-to-day aspects 

of running their businesses to take the time to explore new opportunities to grow their business; and simply they are just not aware 

of all the various programs that are offered. And then when they 

do become aware, they get inundated with the overwhelming 

amount of paperwork required by some of these programs. 

So as the committee considers the reauthorization for the Bank, 

we feel it is important for you to not only consider ways for the 

Bank to be made more accessible to small businesses but to also 

streamline the application process so more small businesses can 

take advantage of the opportunities to expand into international 

markets. 

Additionally, we feel there needs to be better cooperation between the various Federal agencies that play a role in the export 

economy. This includes the U.S. Department of Commerce, the 

Small Business Administration, and the Department of State; and 

perhaps you can better utilize the services of organizations like the 

Long Island Association to get that message out for the Federal 

Government. The government doesn’t always have to do everything, and so utilize organizations like us to get the word out about 

the good programs like the programs that Ex-Im administers. 

We also think that technology might be better used for small 

businesses in the application process. We have seen a rapid movement towards the digital economy, and we ask that the application 

process for small businesses be streamlined. Because, if we do that, 

I think we make it easier for small businesses, and that will generate greater participation. 

The Ex-Im Bank’s global access for small business forums are 

prime examples of how to start that process. The goal of this program is to reach 5,000 small businesses across the country, with 

20 such forums being held this year alone. I am happy to be working with Congresswoman Carolyn McCarthy for a forum to be held 

on Long Island on April 11th, and we are marketing that event to 

our membership so they can take advantage of what the Ex-Im has 

to offer. 

The recent announcement of Ex-Im Bank for the Supply Chain 

Financing Initiative is going to be very helpful to small businesses 

that supply U.S.-based corporate operations. By supplying competitively priced working capital finance to suppliers of U.S. exporters, 

this program will lower the cost to these suppliers and thereby 

strengthen the supply chain. 

An additional benefit of the supply is that it allows suppliers to 

get paid faster and decreases the receivables on their balance 

sheets. This is another tool in the Federal tool kit that we feel can 

be helpful to many Long Island small businesses, as well as small 

businesses across the country, and we look forward to working with 

Ex-Im to take advantage of this. 

12 

Another area that we feel the committee should take a closer 

look at is military and defense items. A large number of smaller 

businesses on Long Island are involved in the defense industry. As 

many of you know, Long Island is the cradle of aviation and has 

a proud history in the air and space industry. Many of the goods 

and services produced by the defense industry sector can have better export applications, and we feel that any exclusion from the 

programs for defense-related industries should be revisited and 

amended. 

The Long Island Association and Ex-Im have similar goals of trying to create jobs and to grow the economy. To this end, we look 

forward to working with the Bank and bringing its valuable services to the small businesses on Long Island. And we look forward 

to working with you as well so we can all improve the business climate for not only Long Island and the State of New York, but for 

our country. 

So, Mr. Chairman, thank you for the opportunity to make some 

of these suggestions to the committee; and I thank our Congresswoman, Carolyn McCarthy, for the opportunity to be here today. 

[The prepared statement of Mr. Law can be found on page 42 of 

the appendix.] 

Chairman MILLER OF CALIFORNIA. That is three plugs you got. 

That is pretty good. 

Some great issues were raised. One was cargo preference. The 

Bank’s charter does not specifically mandate the U.S.-flag vessels 

in connection with Ex-Im. That jurisdiction is with the Transportation and Infrastructure Committee. It is not our jurisdiction. I 

have talked to Chairman Mica regarding this issue, so it is not 

something we would debate or discuss in this committee because 

we have no purview over that issue. That is a separate committee 

altogether. 

But you have brought some great issues up. You said that ExIm is the least competitive—or we are—with our global competitors. You talked about regulatory restrictions that are placed over 

your requirements that you have to comply with with them. And 

you talked about raising the lending authority from $100 billion to 

$200 billion. And content was another concern. 

One question I had was on the lending authority. They have authority for $100 billion, but they are only at about $75 billion right 

now. So there is an additional $25 billion in lending authority 

available for them to use. 

The other content requirement is we require 15 percent not to 

exceed in foreign involvement. What changes would you like to see 

made in the content, for example? If that was modified in some 

fashion, would it change the way you are doing business as it applies to Ex-Im? Would you then modify the structure of your product where it did include a greater foreign content if we restructured 

that in some fashion? 

Mr. BHATIA. Mr. Chairman, I guess one way to think about the 

content issue is, how does it currently hurt us? Okay? How does 

it currently hurt American jobs? And I think it hurts us in probably three ways. 

So the first is there are some products that we manufacture that 

simply by the nature of the way the inputs come in we can’t get 

13 

up to that threshold. We are at maybe 65, 68 percent U.S. content. 

And as a result of that, Ex-Im financing, complete financing, is just 

not available to us. So we will not even apply in those cases. 

Chairman MILLER OF CALIFORNIA. But it wouldn’t change your 

normal product that had 85 percent. It wouldn’t change that matrix 

for us, would it? 

Mr. BHATIA. No. On that point, no. 

But the second point to be made, I think, is, by virtue of having 

a very high U.S. content requirement, much higher than our foreign competitors, for instance, they are able to both produce goods 

at a—they are able to be more efficient in terms of how they manufacture the goods. 

And then the other issue is, remember, they are able to get full 

financing. Take the U.K., for example. Twenty-five percent, let’s 

say, U.K. content. They are able to get 85 percent financing for 

that. If we were to manufacture something with 60, 68 percent, we 

would only be able to get up to 68 percent financing on that. So 

there is a cost difference, there is a financing difference, there is 

a pricing difference, and there is an availability difference. 

To get to your point about what would we recommend, I think 

what we would recommend, first and foremost, is that the U.S. content requirement be reduced to the OECD average, which, at the 

moment, the next highest to the United States is 50 percent, and 

many are below that. 

Chairman MILLER OF CALIFORNIA. So by us changing the standards, it wouldn’t put you in a position where you would lower your 

percentage automatically? 

Mr. BHATIA. No. No. To the contrary. I think what it would allow 

us to do is seek export financing from the United States, be more 

competitive, be able to compete abroad, and retain the production 

out of the United States. 

Right now, to be competitive, we are having to manufacture and 

seek export financing from other institutions around the world. So, 

for instance, we could export—there is a wind turbine opportunity, 

let’s say, to sell to Kenya. We can export from two places. We can 

export out of the United States, out of our Greenville, South Carolina, facility or we can export out of Germany and utilize German 

export financing. 

Chairman MILLER OF CALIFORNIA. So if we changed them, you 

think it would increase American jobs. 

Mr. BHATIA. I can tell you it would increase American jobs. 

Chairman MILLER OF CALIFORNIA. Mr. Scherer, how would you 

apply that to Boeing? 

Mr. SCHERER. We believe—Boeing believes that the content requirement of 85 percent is too high. We believe that we could probably live with a number in the 70 range—70 percent range, probably, as we currently produce our airplanes. 

But, to Karan’s point, he is right to the extent that we have increases in foreign content, we have to go outside. We have to obtain 

co-financing from other export credit agencies to ensure that we 

can fill the gap. 

But, again, this is a competitive world that we are in. We have— 

oftentimes, in order to be able to sell airplanes, we are required to 

14 

make offset requirements. We have cases where we just don’t—we 

just can’t get to that 85 percent number. 

Having said that, 82 percent of all the jobs and our procurement 

is here in the United States. But we have some aircraft that are 

below the 85, and it is kind of an awkward situation that we have 

with our customers who, for example, are acquiring Boeing 737 aircraft which maybe has an 82 percent content and we say, sorry, we 

can only give you 82 percent, not 85 percent. But when they buy 

their Airbus airplane, which has, frankly, a lot of U.S. content in 

it, they can still get 85 percent financing. 

Chairman MILLER OF CALIFORNIA. So it is putting you at a disadvantage with competitors. 

Mr. SCHERER. It is putting us at a disadvantage, yes. 

Chairman MILLER OF CALIFORNIA. Mr. Ickert, I would like to 

hear if the small guy you said you are has an opinion on that. 

Mr. ICKERT. We have a unique situation. It impacts us, also. 

Now there is a work-around, if you will, in our situation. Most 

everything that we have is U.S. content and materials in our aircraft, except for the engine. The engine comes out of Canada. Luckily, Ex-Im and EDC have a co-finance agreement that allows us— 

they process—we process through Ex-Im, Ex-Im sends it on to 

EDC, and EDC picks up their part of the coverage. 

Chairman MILLER OF CALIFORNIA. So you have an out that they 

don’t. 

Mr. ICKERT. That is exactly right. Yes, sir. We have an out. 

Chairman MILLER OF CALIFORNIA. If it wasn’t for that, how 

would it impact you? 

Mr. ICKERT. If I did not have the out, it would impact us dramatically. We couldn’t use Ex-Im financing because that engine— 

Chairman MILLER OF CALIFORNIA. It would have a dramatic impact on your business personally. 

Mr. ICKERT. That engine runs about 35 to 40 percent of our 

value. So I couldn’t access Ex-Im without the co-finance agreement. 

Chairman MILLER OF CALIFORNIA. Mr. Law, do you have a comment on that? 

Okay. I have gone over my time. Mrs. McCarthy is recognized for 

5 minutes. 

Mrs. MCCARTHY OF NEW YORK. Thank you, Mr. Chairman; and, 

again, I thank everybody for their testimony. 

Mr. Law, we understand and we know that the Long Island Association is the largest association for small businesses and medium-sized businesses on Long Island and New York State. When 

you talk about how to expand it, is that something that should be 

put into the reauthorization? Is that something that we should be 

encouraging associations to basically say that we should be growing 

the advertisement part? 

I went to you about—what, 2 months ago, I guess—because I 

wanted to have an educational event for our small businesses on 

exporting. So I knew to go to you mainly because of the work that 

we have worked together on through the association. But how do 

you get that message out into other areas? Mr. Ickert basically 

found a small lender. How would you see something like that being 

set up? 

15 

Mr. LAW. I think organizations like the Long Island Association 

that exist throughout the country could be helpful to the Federal 

Government in promoting your programs. I think sometimes—and 

I have been in and out of the public sector and the private sector 

and sometimes—I remember my tours with the public sector. You 

get so close to it and you think everybody is aware of everything 

that you are doing, and they are not. Because people are out there 

working really hard and long to run their businesses, and they 

don’t see everything or perhaps they don’t pay attention to everything. 

So I think organizations like ours, where we are maybe on the 

street with them more often, we could be educating them about the 

opportunities for these programs. And so I think there are roles for 

organizations like ours to play with Ex-Im, the Small Business Administration, and the Department of Commerce to help get the 

good programs that you and this committee authorized and to help 

get that word out there. So I think organizations like ours could 

help the Federal Government get that word out. 

Mrs. MCCARTHY OF NEW YORK. Thank you. 

Mr. Ickert, when you were speaking, you said you get your engines from Canada. And I am just curious. Is that because that is 

the best engine for the particular planes that you make, or was it 

a better price or— 

Mr. ICKERT. For the engine, for the plane that we produce, it is 

the best engine to match up with the airframe that we produce. 

Mrs. MCCARTHY OF NEW YORK. Okay. That is fair. I was just curious about that. 

We talk about large corporations, but yet we are still talking 

about small businesses here, and certainly we have probably two 

of the largest corporations in this country, and yet small businesses 

are a very large part of your success in business. And I was just 

wondering if you could explain that and go a little bit deeper on 

the 85 percent content. Would that have any adverse effect on any 

of our businesses here in this country? 

Either one of you or both of you? 

Mr. BHATIA. I will go first, Congresswoman. 

To your first point, small businesses are absolutely essential. 

Small American businesses, small and medium-sized businesses 

are absolutely essential to our ability to produce the goods that we 

need to be able to compete around the world. 

We have a supply chain of tens of thousands of American SMEs, 

and one way we like to think of ourselves at GE is actually as the 

platform for SMEs to export around the world. Many of our suppliers only can access these far-flung markets around the world by 

basically supplying goods and services into an entity like GE and 

being able to sell around the world. So we see ourselves as very 

much tied to SMEs, small businesses, our suppliers. 

As to your second point, again, I go back to my comments to the 

chairman. I think that high content requirements at the levels that 

we have them preclude us from being able to access critical Ex-Im 

financing to allow us to compete in international markets and 

thereby are preventing us, slowing us down from creating more 

jobs for SMEs for our own employees. So I guess that is my response. 

16 

Mrs. MCCARTHY OF NEW YORK. Mr. Scherer? 

Mr. SCHERER. I would echo much of what Mr. Bhatia indicated. 

We have some brochures here that we would be happy to leave 

with you that we refer to as our invisible exporters. 

But as I had indicated in my oral testimony, we have 22,000 suppliers in the Boeing company and 2,200 of those are small business 

suppliers to the Boeing commercial airplane company. Clearly, 

while we are a ‘‘large’’ company, we need to be mindful of the fact 

that we are 160,000 individuals, a lot of different types of people— 

scientists, engineers, mechanics, machinists, and our suppliers who 

help build these very technologically advanced airplanes. 

But, we have to have export credit support that is competitive; 

and to the extent that we don’t, it is going to inhibit our ability to 

compete effectively. 

Mrs. MCCARTHY OF NEW YORK. Thank you. My time is up. 

Chairman MILLER OF CALIFORNIA. Thank you. 

Vice Chairman Dold is recognized for 5 minutes. 

Mr. DOLD. Thank you, Mr. Chairman; and, again, I want to 

thank you all for coming this afternoon and for coming with some 

suggestions. 

And if I can just go right to Ambassador Bhatia, in a recent GE 

transaction to sell, I think, locomotives to Pakistan, the Ex-Im 

Bank matched financing terms that was provided, I think, by 

China. And I was just wondering, how did the transaction actually 

play out? Can you give me an idea of whether you think this is a 

model for future transactions going forward? 

Mr. BHATIA. Thanks, Congressman. 

Yes, this is an opportunity that actually remains still playing 

out. So Pakistan is in desperate need of new locomotives. 

I would note, as an aside, it is not only an export opportunity for 

us, but it is also an opportunity to strengthen Pakistan’s economy, 

allow goods and cargo to flow more effectively, thereby strengthening the economy and hopefully addressing some of the other 

challenges that exist in that country. 

We went in to bid on it. A Chinese company came in, backed by 

extremely aggressive concessionary financing; and the Pakistani 

government effectively said to us, if you can’t match that, you are 

not going to be selected; you are not going to be competing. 

We went to Ex-Im, and Ex-Im—and I should note that China is 

outside of the OECD which prescribes certain rules. So we went to 

Ex-Im. Ex-Im stepped forward with an offer to match what China 

was doing. As a result of that, we were selected. 

Now, there are some legal processes going on in Pakistan today. 

The tender is going to be reissued, and we trust and hope that ExIm will step back up with support again. We are confident that at 

the end of the day, with Ex-Im’s support, we will win that bid. 

Mr. DOLD. If I can just follow up, also, you talked before about 

the content requirement and how if that was dropped down, you 

would like to see it down to be an average, I am guessing, probably 

around 50 percent. We see Mr. Scherer saying that they would be 

able to live with something around 70 percent. Is there some sort 

of a marrying in between, or is that something we are just going 

to have to kind of take a better look at? 

17 

Mr. BHATIA. I think we would say we would like to see Ex-Im 

become globally competitive. To be globally competitive, we think 

we need to get those contents requirements down to roughly what 

the OECD average is. If it were to be done in certain steps, perhaps going down to 70 and then moving forward to an OECD average, I think that would be something that we would be grateful for. 

Mr. DOLD. And obviously making Ex-Im more globally competitive you said absolutely was going to be able to create American 

jobs which, obviously, from your corporation, that would be one 

way to do it. 

You also highlighted some other regulatory burdens that were 

going to be impacting you and I assume the rest of you as well. 

Can you talk to me for a second about the economic impact test? 

Is that costing you jobs here in the United States right now or can 

you shed a little bit more light on that? 

Mr. BHATIA. Sure. The economic impact test, Congressman, is a 

basic principle, is a requirement that Ex-Im puts in place which 

basically results in Ex-Im being unwilling to lend to projects where 

the export, the U.S. export, could result in augmenting or strengthening the production of a foreign product that may come back into 

the United States in some form and potentially compete with a 

U.S. product. 

The problem with this is what it ends up doing is creating a very 

complex, very politicized, and ultimately, we think, unproductive 

equation whereby large exports, potential exports that would potentially support thousands of U.S. jobs abroad end up not happening because Ex-Im financing is unavailable because there may 

be a very small number of foreign products that would come back 

into the United States. So, from our perspective, that is simply a 

balance of the benefits test, and we think it should weigh in favor 

of the maximum number of U.S. jobs. 

Mr. DOLD. Thank you. 

Mr. Ickert, if I can—I just have a very short period of time. How 

many countries do you currently export to right now? 

Mr. ICKERT. In 2010, we exported to 14 different countries during 

that calendar year. If you add—I have not sat down and added 

them together, but 20 plus. But 14 in 2010. 

Mr. DOLD. And were any private entities, private financing options available to you, or was Ex-Im basically your only financing 

option? 

Mr. ICKERT. Some of those countries were cash deals, so we 

didn’t have to access financing. Our customers in those countries 

did. Where we have accessed Ex-Im, in most of those cases we had 

no private opportunity for financing; and without Ex-Im participation those sales would not have been made. 

Mr. DOLD. Great. Thank you. 

And I didn’t want to let the time go without at least bringing the 

hometown company Boeing into this. You have outlined a couple of 

items here in terms of your priorities. And I see my time is up. Can 

you just give me, out of your list of three here, what is your top 

priority? What is the one thing if we could get it done that you 

would want to see happen here from the committee? 

Mr. SCHERER. The main thing is to get the Bank reauthorized, 

obviously. 

18 

There is an emerging issue I would like to raise, because Ex-Im 

Bank does a phenomenal job on the international front. The transportation division team there, the work they have done, what they 

have been able to do with respect to the surge in demand to support transactions during the financial crisis has been unparalleled. 

But what I am concerned about is a situation now. 

We just negotiated a new aircraft sector understanding under the 

auspices of the OECD which governs the rules of export credit, and 

there is a provision in there dealing with the home market. And 

there is a home market restriction that has operated pretty well 

between Boeing and Airbus whereby the U.S., France, Germany, 

and the U.K. don’t finance in each others’ markets or in their own 

markets. However, with Brazil and Canada coming into the new 

aircraft sector understanding, and now with Canada producing the 

new C series aircraft, which competes head to head against the 

Boeing 737 family of aircraft, as well as the Airbus A320 family, 

the Export Development Corporation of Canada will be providing 

export credit financing support into the United States. 

Our understanding is that, when agreement has been made, the 

United States could have C series matching. However, we do not 

currently have a policy response to match. And that is something 

I think that is critical, that we find a way to ensure that should 

happen. 

Chairman MILLER OF CALIFORNIA. We are having discussions 

with Treasury right now on that issue for you. 

Mr. SCHERER. Thank you. 

Mr. DOLD. Thank you all. 

Chairman MILLER OF CALIFORNIA. Also, vacancies on the board 

were mentioned. We are working with our colleagues on appropriate letters encouraging that those vacancies be filled. 

Mr. Perlmutter is recognized for 5 minutes. 

Is he gone? 

Gwen Moore, you are recognized for 5 minutes. You moved up. 

Ms. MOORE. Thank you so much. I am so sorry that I missed a 

lot of the testimony of this distinguished panel. So if I ask questions that have already been addressed in your testimony or other 

places, please forgive me for that. 

I was really interested in a further discussion of the national 

content requirements. What might you all say about the revision 

of the national content requirements perhaps contributing to a 

greater trade imbalance if we were to revise this? Not only with 

content in terms of those percentages but in terms of products and 

services and to provide services to some of the CAFTA countries. 

What argument would we be able to make that this wouldn’t contribute to an already onerous trade imbalance? 

Mr. BHATIA. Congresswoman, I am happy to take a stab at that. 

Let me sort of give you a very concrete, tangible example perhaps. We produce steam turbines out of our facility in Schenectady, 

New York. These are substantial exports for the United States 

when we can export them, multi-million dollar exports. Each turbine supports hundreds of U.S. jobs. 

Right now, those steam turbines, by virtue of the nature of the 

inputs into it, even if we maximize our U.S. content into it, we 

probably get up to 68, 69 percent. So the maximum financing we 

19 

can get from Ex-Im Bank for that would be 68, 69 percent. The remainder of that either has to be found in the private markets or 

has to be found from the buyer themselves. 

Ms. MOORE. I am sorry, just because the other 31 percent of the 

components are from other countries? 

Mr. BHATIA. They could be raw materials that we don’t have in 

this country. They can be things that are specialized, produced 

somewhere else. This is highly sophisticated production, so it involves a global supply chain. 

Ms. MOORE. Why would you also object to the economic impact 

test? Maybe we could revise that so there could be an explanation 

that rubber or whatever is not available in this country, nobody 

grows it, and that is why the content is lower. Why do you then 

object to the economic impact test, say let those levels rise? Just 

simply explain why it doesn’t meet those thresholds. 

Mr. BHATIA. I think, in some ways, they are comparable. In both 

cases, by virtue of the requirements that are put into place, we discourage—we preclude U.S. companies from accessing Ex-Im financing. It is vital for us to be competitive abroad. Because our competitors, be they from China or from other countries around the world, 

have their government export financing come into play. 

So whether it is content requirements that only limit our ability 

to access a certain amount of financing or make it unqualified altogether, or economic impact tests that may prevent us from accessing the financing altogether, that is the reason. 

Ms. MOORE. I wouldn’t want to get into a race to the bottom on 

that. 

Can I ask you one other question and maybe the other folks? 

It is hard not to notice that we have the largest corporations 

here, Boeing and GE, and I am really happy about the economic 

activity in Wisconsin with GE. But how do you meet the small 

business requirements? How do small businesses, say in Wisconsin 

or anywhere else, really import from the Export-Import Bank, 

small businesses, and to what extent do any of the credit unions 

or small banks get an opportunity to facilitate export-import banking, identifying customers and so on? 

Mr. ICKERT. Congresswoman, I will take a shot at that from the 

standpoint, as I pointed out, I am from Olney, Texas, population 

3,000. We use the Export-Import Bank extensively for mediumterm transactions. I have probably used it for over 80 transactions 

over our history, and that supports—in 2010, we had over 56 percent of our product being sold outside of the United States. So that 

supports 100 jobs in Olney, Texas. That may not sound like a lot, 

but when you replicate that across this country, the potential is 

tremendous. And through the Export-Import Bank small businesses can do that, and we can replicate that. I think that is why 

it is very important that we look to the small business activity of 

the Bank. It contributes in Olney, Texas. 

Ms. MOORE. Thank you. I yield back. 

Chairman MILLER OF CALIFORNIA. Just to clarify, the banks—Export-Import does not compete against private banks. They are not 

allowed to. If there is a private bank available, they have to use 

their funds first. They only step in if those private dollars are not 

20 

available. That is why we had the small business guy here to testify to that. 

Mr. McCotter, you are recognized for 5 minutes. 

Mr. MCCOTTER. Thank you, Mr. Chairman. 

First, I just want to make sure it is the jurisdiction of the Transportation Committee to deal with cargo preference. Was that your 

statement earlier? Just nod. 

Chairman MILLER OF CALIFORNIA. I was conversing. 

Mr. MCCOTTER. You made the statement earlier that the Transportation Committee would deal with the issue of cargo preference, 

not us. 

Chairman MILLER OF CALIFORNIA. Mr. Mica and I talked about 

that. It is their jurisdiction, not our jurisdiction. 

Mr. MCCOTTER. I appreciate that. I just wanted to be clear. 

I suppose, Mr. Bhatia, let me ask you, or perhaps Mr. Scherer 

from Boeing, if you lowered the domestic content requirement— 

let’s just be theoretical about this. If lowering is good, isn’t eliminating it altogether even better? Wouldn’t you make even more 

money doing that? 

Mr. SCHERER. It is an interesting question. I certainly wouldn’t 

propose that. It would sort of give rise to the reason—what is the 

purpose? What is the reason? There has to be a content reason. 

There has to be something that is going to support the industry 

domiciled in a particular country. It would seem to make the most 

sense. 

I think what we have here is a situation of unintended consequences, though, of having content levels so high that in fact it 

causes us to be uncompetitive. 

Mr. MCCOTTER. And then the number, the percentage that you 

believe is the optimal percentage for the next 6 years, or however 

long it may be reauthorized. You are asking for the change from 

‘‘X’’ to ‘‘Y.’’ The ‘‘Y’’ that you are proposing is now the optimal number for domestic content percentage. 

Mr. SCHERER. This is something we can discuss in terms of what 

the appropriate number would be. I do recall in my history of working at the Boeing company that one time back in the early and 

mid-1980s, the content requirement was 97 percent; and it was— 

trust me—a huge problem. 

Mr. MCCOTTER. If I can, on that point, I can understand that. 

Because growing up around Detroit in the 1980s, we used to have 

a whole lot more manufacturing than we do now, and the number 

was put down, I suppose, as a result of that. I am sure it had no 

contributory effect to that. 

My question then is not when you take not the major company 

but, say, the small-scale suppliers and the contract for those inputs 

into the eventual product are outsourced, is that not a cost-benefit 

determination by the corporation to do that? 

Mr. SCHERER. Absolutely. 

Mr. MCCOTTER. Then would not the decision whether to have the 

right domestic content in your product you seek Export-Import financing for be a cost-benefit analysis as well that would be put into 

I think a consideration of whether the smaller suppliers are 

outsourced or not for the higher figure? 

Mr. SCHERER. Certainly. 

21 

Mr. MCCOTTER. But if we lower it, that would lower the cost-benefit analysis and potentially lead it to a greater favor on the scale 

towards more offshore sources of components for our products. 

Mr. SCHERER. Not necessarily. 

Mr. MCCOTTER. It would. Whether you decide to follow it or 

whether it has a maximal impact on the decision, it will have some 

relationship to the cost-benefit analysis, because it will be easier to 

do it with a lower requirement. 

Mr. SCHERER. I would submit that the—look, the Chinese right 

now are building a new airplane. 

Mr. MCCOTTER. The Communist Chinese, yes, I know. 

Mr. SCHERER. And they are sourcing a lot of their components for 

that aircraft in the United States. But the U.S. Ex-Im Bank isn’t 

going to be supporting the financing of that aircraft. It is going to 

be the Chinese Export-Import Bank. 

Mr. MCCOTTER. It is a mercantilist predatory trading partner 

with which we run a massive deficit. I am aware of that. 

I am concerned now with what is in front of us. Would it not 

make it easier to seek outside components from offshore if we lower 

that requirement, or at least within the cost-benefit analysis? 

Mr. SCHERER. As far as the Boeing company is concerned, I don’t 

think so, and the reason for that is because of the terms of the aircraft sector understanding. Under the issue from a pure cost perspective, the Ex-Im Bank financing is not subsidized. It is very 

close to market terms. So, from a cost perspective, no. 

The issue for us is availability of the financing and ensuring that 

we have a comprehensive and competitive financing package to ensure that we have a level playing field. We are competing against 

Airbus. We are going to be competing against the CSeries aircraft, 

the Bombardier, and so on. 

Mr. MCCOTTER. I appreciate that from Boeing, anyway. 

I know my time is up. I have just one last question. 

Mr. Bhatia, under your number one recommendations—I want to 

see if I have this in a nutshell, because this place is a nuthouse— 

you want more liability, you want to be able to incur more liability 

by raising the cap, and you want to report less, which will be less 

congressional oversight, right? 

Mr. BHATIA. I think what I would say, on your first point, yes. 

I think there should be more liability authorized, because the Bank 

is running up against the cap. As far as less congressional oversight, no, I would not say that, Congressman. I would say that at 

the moment that number has not been revised for years, potentially decades, to adjust for inflation. 

Mr. MCCOTTER. With the chairman’s indulgence, without objection, let me follow up. 

It says, in addition, we are raising the statutory threshold for 

congressional notification from $100 million to $400 million and adjust for inflation, so that you would be required less— 

Mr. BHATIA. For notifications, yes, absolutely. What I meant was 

the committee would obviously continue to have jurisdiction, just 

less notification. Yes. 

Chairman MILLER OF CALIFORNIA. We will have a second round 

of questions now. We have plenty of time. 

22 

Just so I clearly understand, there is nothing in Ex-Im Bank’s 

charter that restricts them to 85 percent. This is a self-imposed 

number that they use, so it is their discretion if they choose to use 

it. But they don’t choose to use it. 

What would your opinion be if we encouraged some form of a 

waiver application you could use to Ex-Im, that under circumstances where there was no other course than to use ‘‘X’’ 

amount of foreign materials or whatever within a product, that you 

could receive a waiver for that? How would that work? 

Like you said on the 737, you can’t get it above 82 percent. If 

you could justify that. Or going to 60 percent. Would that be workable for you in your industries? 

Mr. BHATIA. I think I would say, Mr. Chairman, I think it would 

depend heavily on what the pattern of dealing was, right, what the 

expectation was. 

The reality is, we go into deals sort of having a sense of what 

the financing package may be, and if our competitors are going into 

deals and saying we know we can get you 85 percent, right, we 

have ‘‘X’’ percent local content. If it depends upon a waiver process 

that inevitably in the course of things gets, you know, tugs of war 

and political influence, that becomes very difficult for businesses to 

go in and be credible on. 

Chairman MILLER OF CALIFORNIA. When the Bank is assessing 

risk and those kind of factors, what paperwork does the Bank require for you to provide for them to assess that risk and what level 

of engagement is there for you and the Bank? 

Mr. BHATIA. They certainly evaluate them. There is an entire application process that goes where they would look at the commercial risk and the flow of funds and so forth. There is also a riskanalysis process that it undertakes with respect to the country at 

issue. 

So I don’t know—does that answer your question? 

Chairman MILLER OF CALIFORNIA. In your judgment, what could 

Ex-Im Bank do to support and encourage more exports but not do 

it in a fashion that encourages you to use a higher percentage of 

outside products within your manufacturing? I guess Mr. McCotter 

has a concern. If we do something to reduce standards, is it going 

to encourage you that maybe there is a cheaper way to produce 

your product using more foreign goods but you know you could still 

qualify? Is there some way we could circumvent that? 

Mr. BHATIA. To get to Congressman McCotter’s issue, yes, the reality is that if you lower the foreign content, if you lower the U.S. 

content standards, you are going to enable and permit U.S. companies to source globally in a more efficient manner. But the consequence of that is going to be more U.S. exports. The consequence 

across the board will be more U.S. exports; and, as a result, you 

are going to have dramatically more U.S. jobs created. 

Chairman MILLER OF CALIFORNIA. You are saying, even if you 

used a higher content, the jobs in this country would increase? 

Mr. BHATIA. Would increase, yes. The reality is that Ex-Im is so 

limited, it is so marginalized effectively in terms of international 

ECAs right now, by virtue of its content requirements, cargo requirements, a variety of these other requirements, that we don’t 

have a tool. When we are competing with the Chinese, when we 

23 

are competing with the Brazilians, when we are competing around 

the world to try and create U.S. exports and U.S. jobs, it is simply 

not a viable tool. So what we are saying is bring it into line with 

the OECD average, with the OECD requirements, thereby giving 

U.S. businesses and workers a chance to compete internationally. 

Chairman MILLER OF CALIFORNIA. Let’s assume for a question 

point that we did something like that, and let’s make an assumption that we increased it to $200 billion rather than $100 billion. 

What benefit would that be to American workers and jobs? 

Mr. BHATIA. Going from $100 to $200 billion? 

Chairman MILLER OF CALIFORNIA. And modifying the— 

Mr. BHATIA. I can’t extrapolate. I can just give you our examples. 

Chairman MILLER OF CALIFORNIA. Would it increase your ability 

to manufacture? 

Mr. BHATIA. Last year, to take as an example—let me give you 

two examples. Our gas turbine power plant in Greenville, South 

Carolina, a very large facility, 85 percent of our products exported 

out of Greenville was for global markets, was for international 

markets. Out of our aircraft engine facility in Ohio, the number 

was somewhere between 78 and 80 percent of production was for 

exports. But U.S. jobs are being sustained by international markets. That is the reality, and that is what we are seeing happening 

going forward. 

Chairman MILLER OF CALIFORNIA. Increasing the leverage they 

could have as far as loans would not impact American jobs? 

Mr. BHATIA. No. I see this being key to us being able to sustain 

U.S. economic growth and U.S. job growth. 

Chairman MILLER OF CALIFORNIA. Mr. Scherer, would you agree? 

Mr. SCHERER. I would agree 100 percent, and I would like to give 

an example. 

Aircraft in particular are very high-value capital goods, and over 

80 percent of the aircraft that we produce are exported outside the 

United States. And many countries—many governments and countries, they are looking at their trade balance as well, they are looking at their acquisitions, they are looking at their jobs programs 

and saying, look, if we are going to spend $2 billion on a fleet of 

Boeing airplanes, then we want you to source some of that work 

in our country. We want you to buy some components and parts 

and so forth from us. 

They tell this to the other competitors, such as Airbus, and it 

gets to a point where it is a serious competitive issue for us. And 

if we don’t, if we aren’t able to address appropriately the jobs issue 

for a particular customer, we are not going to win the business. 

And in fact, we have lost transactions because we weren’t prepared 

to go as far as a particular customer wanted us to go. This is the 

business reality out there. 

I guess the point I would make is 70 percent of something is better than 100 percent of nothing. 

Chairman MILLER OF CALIFORNIA. If you give me something in 

writing based on what your assumptions are today that would be 

more specific, I would appreciate that. 

Ranking Member McCarthy, you are recognized for 5 minutes. 

Mrs. MCCARTHY OF NEW YORK. Thank you. 

24 

Mr. Law, I want to come back to you on small businesses and 

what we can do with them. I believe in your testimony you had 

talked about some of the smaller companies saying that to apply 

for the Export Bank, it was too complicated, they didn’t have the 

time. Do you have any other recommendations that you might 

think the committee should be thinking about as we go through reauthorization? 

Mr. LAW. I think the ideas of having the forums are a terrific 

idea. I think, again, utilizing business organizations, chambers of 

commerce to get that information out to the small businesses is a 

key. And anything we could do to streamline the application and 

do it all on the Internet, Ex-Im’s Internet, I think would be worthwhile and encourage participation in the program. 

Mrs. MCCARTHY OF NEW YORK. I think somewhere in your testimony, which I kind of found interesting, was that maybe there may 

be a possibility through the Bank, they would have people dealing 

just with first-time applicants. 

I know, Mr. Ickert, you work exclusively with the Bank so you 

know how the forms go and everything right now. But for many 

people who have never done this before and which we are going to 

encourage to increase, would having someone who just specializes 

in people applying for the first time, would that help the small 

businesses? Do you think that would have helped you when you 

first applied? 

Mr. ICKERT. Yes, ma’am, I do. I think also looking at first-time 

users of the Bank as to whether they are successful or not successful, the Bank being able to follow up and see what frustrations may 

have been there, to better understand, decide from the small business to address procedures that could address those later. 

But there are difficulties. They are difficult. And I found that 

having a bank that has been very helpful to me—as I said in my 

testimony, they have been very patient with me. Ex-Im Bank has 

been very patient with me. It requires some patience for new, firsttime users. It is not necessarily a user friendly—it is not bad, but 

it has gotten better in the last few years, but it is still a daunting 

process. 

Mrs. MCCARTHY OF NEW YORK. That is something we will work 

on. 

Mr. Law, do you have anything to add to that? 

Mr. LAW. No. I would agree with what Mr. Ickert said. I think 

Ex-Im has a lot of terrific people working there, and they do try 

to be helpful, but, like with any organization, there are always 

things you can improve upon. That is one idea. 

Mrs. MCCARTHY OF NEW YORK. Thank you, Mr. Chairman. 

Chairman MILLER OF CALIFORNIA. Mr. McCotter, you are recognized for 5 minutes. 

Mr. MCCOTTER. Thanks. Just very quickly. 

Again, I just want to be clear. I think you kind of hit it when 

you talked to the chairman. When you lower that content requirement, your contention is that even if there is outsourcing of jobs 

here in the United States and the cost of the social safety net, the 

upheaval in their lives, somehow there will still be a net increase 

in jobs for the United States. Right? 

Mr. BHATIA. Yes. 

25 

Mr. MCCOTTER. Because it is a global economy and we have to 

find the cheapest supply lines, right? 

Mr. BHATIA. Right. 

Mr. MCCOTTER. So wouldn’t zero domestic content then maximize American jobs under the Export-Import Bank’s mission? 

Mr. BHATIA. It is actually interesting you raise this, Congressman, because Canada actually has that. So Canada doesn’t have a 

domestic content requirement. Rather, it has a national interest 

test requirement, which in some ways is a little bit more of a sophisticated way of looking at this, particularly in the modern era. 

Now, content matters to Canada, I have no doubt, production 

matters in Canada, jobs matter in Canada, but it is a question of 

is an 85 percent hard line test creating or discouraging the creation 

of local jobs? 

Just to give you a very concrete example, I go back—I think I 

may have mentioned it before—wind turbines, right? So if we need 

to depend upon—if there is an export market and we need to have 

sovereign financing to qualify for the export of that, we have the 

choice of shipping out of the United States or the choice of shipping 

out of Germany. We manufacture them there. We manufacture 

them here. We create jobs in both places. 

If U.S. export content is set at 85 percent, we can’t access full 

Ex-Im funding. So we will source them out of Germany. We will 

create the jobs there. We would prefer to do it, obviously, in the 

United States, but we would end up doing it out of Germany if ExIm is uncompetitive. 

Mr. MCCOTTER. Or it could be viewed that we are rewarding the 

initial decision to outsource the jobs and we would like to change 

the requirement so that we can still have the financing in place. 

Mr. BHATIA. It is a global market today, and we are competing 

against people all over the world. 

Mr. MCCOTTER. One last question. I appreciate the tenuous nature of the global supply chain. I am also fascinated by how every 

generation in history makes that same argument that the strategic 

needs have changed. It is a globally interrogated economy. I am 

sure the Phoenicians thought the same and maybe the Athenian 

city state, too. 

But my last thing was something you said that was very fascinating to me, Mr. Scherer, when you talked about how when you 

do deals with other countries they may demand that they have domestic industries taken care of. 

I don’t expect a response, but I would just like that to be clear 

to people. Because when my Republican colleagues especially talk 

about free trade, I want them to know that, no, there is negotiated 

trade in this world today, because if we had free trade, the United 

States would be just fine. 

Thank you. 

Chairman MILLER OF CALIFORNIA. Ms. Moore is recognized for 5 

minutes. 

Ms. MOORE. Thank you, Mr. Chairman. 

Mr. Bhatia, I want to turn my attention again to your testimony 

regarding eliminating the cargo preference requirements. The argument that you make is that this was done during an era where 

there was a desire to build a U.S. merchant marine fleet. 

26 

I am wondering, if we were to eliminate this requirement, would 

that in fact lead to some insecurity with respect to the chain of custody of contents of these barrels, other security problems with regard to pirates, or various war components that are being shipped 

being able to be intervened? Do the marine vessels have sort of a 

military presence that would be able to be matched by the ExportImport Bank’s expansion of their fleets? 

Mr. BHATIA. Thank you, Congresswoman. 

No, I think we do ship products that are not financed by Ex-Im 

on non-U.S.-registered vessels. Obviously, we use global vessels 

and haven’t had issues that I am aware of with respect to security 

of those products. I think this is—from our perspective, this is a 

little bit of the vestige of a previous era. 

Ms. MOORE. So what is shipped on the merchant marine ships 

that is not shipped on other cargo? 

Mr. BHATIA. Goods that Ex-Im finances, right? So if Ex-Im finances an export, I can actually give you a very concrete— 

Ms. MOORE. Does it matter if there are military components? 

Mr. BHATIA. No. No. It has nothing to do with the components 

we are exporting. It has to do solely with the fact there is Ex-Im 

financing for us that requires us to ship it on U.S. vessels. 

Ms. MOORE. I am sorry. If we are exporting— 

Mr. BHATIA. Let me give you maybe a concrete example. 

Wind turbines. We had an opportunity to sell wind turbines in 

Kenya. If we had used U.S. Ex-Im financing for that, we would 

have had to put those blades, these big blades that go on wind turbines, on U.S.-bottomed boats. The cost of using those U.S. boats 

was so high, it was actually 19 percent of the overall value of the 

contract— 

Ms. MOORE. I am sorry. I don’t understand. Why were you required to put them on the merchant marine boat? 

Mr. BHATIA. Because that is standing Ex-Im policy. 

Ms. MOORE. Is it because it is something that can be militarized? 

Mr. BHATIA. No, it has no relationship to that. It is just simply 

a standing requirement. 

Chairman MILLER OF CALIFORNIA. If the gentlewoman will yield, 

it is not Ex-Im’s policy. It is maritime policy, which is a completely 

different committee. So it is nothing to do with Ex-Im. It is just the 

policy they have to comply with. 

Ms. MOORE. Reclaiming my time, I was wondering, you say that 

we should match financing offered by foreign governments competing abroad where such financing is inconsistent with the OECD 

arrangement. I am wondering, would this run us into any problems 

with the WTO or providing these subsidies? What sort of market 

disruption would it provide for us to provide funding to the Ex-Im 

Bank to make it more competitive with places like China? 

Mr. BHATIA. I am glad you raised that. I think it is a very important point. 

Certainly, GE would in no way support WTO-inconsistent practices by U.S. Ex-Im or anybody else. The OECD framework is basically outside of the WTO. It sets a set of standards that the OECD 

member economies have agreed to. China and other major economies are actually outside the OECD framework. So all we are saying, Congresswoman, is suggesting that the Ex-Im Bank be in that 

27 

situation able to match the non-OECD funding to be able to level 

the playing field. 

Ms. MOORE. I have 30 more seconds, so let me ask you, is there 

any prohibition in your charter against actually marketing to small 

businesses that may not know that they can access your programming? It seems to be a disconnect that I am hearing from Mr. Law 

and people like that about people’s ability to realize that you are 

there. Is there any prohibition against your advertising, marketing 

to small businesses about the availability of the Export-Import— 

Mr. BHATIA. As a private sector representative, I don’t know of 

anything that precludes Ex-Im from doing that, Congresswoman. 

Ms. MOORE. Do they do it? What is the scope of their outreach? 

Mr. Law? 

Mr. LAW. They certainly have developed small centers in communities throughout the country, not that many, and they definitely 

have established some and a Web site, and they do then coordination with the SBA as well. My suggestion was that they should use 

organizations like ours, because our members are looking to us for 

information, and we could help get that information to them. 

Ms. MOORE. Thank you for your indulgence, Mr. Chairman. 

Chairman MILLER OF CALIFORNIA. Thank you. 

There are a couple of things I would like to read in the record 

so we can try to clear this issue up. 

First of all, cargo preference programs are administered by the 

United States Maritime Association, an agency within the Department of Transportation, wholly outside of our jurisdiction. And if 

you look at PR 17, it is the sense of Congress that any loans made 

by an instrument of the United States Government to foster the exporting of agricultural or other produces shall provide that the 

produce may be transported only on a vessel of the United States, 

unless as to many or all other products the Secretary of Transportation after investigation certifies the instrumentality of the vessels 

of the United States are not available in sufficient numbers. 

So, we have no control. I do understand your concerns, and others. But, for the record, when we are debating this issue, it is not 

something that we can control. The Transportation Committee will 

deal with that. I have talked to Chairman Mica about the concerns. 

Ms. MOORE. Mr. Chairman, just to continue this colloquy for a 

second, this was their testimony, so I couldn’t help but be curious 

about it. 

Chairman MILLER OF CALIFORNIA. I understand. I wanted to 

make sure there was no confusion out there. 

Without objection, I would like to submit for the record the statements of the following organizations: USA Maritime; the Coalition 

of Employment Through Exports; and the National Association of 

Manufacturers. 

The Chair notes that some members may have additional questions for this panel which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 30 days 

for members to submit written question to these witnesses and to 

place their responses in the record. 

This hearing is adjourned. Thank you, witnesses. 

[Whereupon, at 3:30 p.m., the hearing was adjourned.] 

(29) 

A P P E N D I X 

March 10, 2011 

30 


65673.001
31 


65673.002
32 


65673.003
33 


65673.004
34 


65673.005
35 


65673.006
36 


65673.007
37 


65673.008
38 


65673.009
39 


65673.010
40 


65673.011
41 


65673.012
42 


65673.013
43 


65673.014
44 


65673.015
45 


65673.016
46 


65673.017
47 


65673.018
48 


65673.019
49 


65673.020
50 


65673.021
51 


65673.022
52 


65673.023
53 


65673.024
54 


65673.025
55 


65673.026
56 


65673.027
57 


65673.028
58 


65673.029
59 


65673.030
60 


65673.031
61 


65673.032
62 


65673.033
63 


65673.034
64 


65673.035
65 


65673.036
66 


65673.037