House Financial Services Committee Debates the Reauthorization of the Export-Import Bank
On June 25, the House Committee on Financial Services presided over a hearing examining the reauthorization of the Export-Import (“Ex-Im”) Bank, the official export credit agency of the United States. The bank’s reauthorization, due to expire on September 30, 2014, has received support from the White House and Democrats. Republicans, however, remain divided on their backing of the bank, with some open to reforms and others pushing for eliminating the bank altogether. In his opening statement, Financial Services Committee Chairman Jeb Hensarling (R-TX) expressed his opposition to the Ex-Im Bank, citing “cronyism” and the issue that its beneficiaries are “some of the largest, richest, most politically-connected corporations in the world.”
The Ex-Im Bank offers loans, guarantees and insurance directly to foreign buyers of U.S. goods and services. Created in 1934 and established as an independent agency in 1945, reauthorization of the Ex-Im has been approved 16 times by Congress. The bank’s supporters argue that Ex-Im provides financing otherwise unavailable to customers abroad who are buying from well-known aircraft makers and thousands of small businesses in the United States. Opponents contend that Ex-Im subsidizes foreign purchases of American goods at a cost to American companies who do not have access those deals.
Topics of discussion during the hearing also included the efficacy of the reforms under the last reauthorization. In 2012, Congress increased the Ex-Im’s financing limit from $100 billion to $140 billion. A draft proposal by Rep. John Campbell (R-CA) would lower that amount to $95 billion and impose other restrictions such as limiting funding of state-owned enterprises backed by sovereign wealth funds.
The two-panel hearing consisted of the following witnesses: the Hon. Fred P. Hochberg, Chairman of the Board and President, Export-Import Bank; the Honorable Osvaldo Gratacos, Inspector General, Export-Import Bank; Richard H. Anderson, Chief Executive Officer, Delta Air Lines, Inc.; Veronique de Rugy, Senior Research Fellow, Mercatus Center at George Mason University; Captain Lee Moak, President, Air Line Pilots Association; Steven Wilburn, Chief Executive Officer, FirmGreen Inc.; Mathew J. Scire, Director, Financial Markets and Community Investment, Government Accountability Office; and Douglas W. Elmendorf, Director, Congressional Budget Office.
For additional information about the hearing, including copies of witness testimony, click here. To obtain copies of the opening remarks, click here for Chairman Hensarling, and here for Ranking Member Waters.
Senate Finance Committee Chairman Wyden Holds Hearing on Trade Enforcement
The Senate Finance Committee held a hearing entitled “Trade Enforcement: Using Trade Rules to Level the Playing Field for U.S. Companies and Workers” on June 25. The hearing focused on the need for strong trade remedy laws to protect domestic manufacturers and rigorous enforcement of those laws. Members discussed the Enforcing Orders and Reducing Circumvention Evasion Act (ENFORCE) bill, introduced by Finance Committee Chairman Ron Wyden (D-OR), which would require Customs and Border Protection (CBP) to investigate allegations of duty evasion. The hearing also addressed U.S. enforcement efforts at the World Trade Organization and the need to challenge practices and measures adopted by our trading partners that do not comply with the rules.
Witnesses included Kevin Brosch, Trade Consultant, BroschTrade LLC, testifying on behalf of the National Chicken Council; Richard Wilkins, Treasurer, American Soybean Association; Bart Peterson, Senior Vice President, Corporate Affairs and Communications, Eli Lilly and Company; Leo W. Gerard, International President, The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers); and Mario Longhi, President and Chief Executive Officer, United States Steel Corporation.
Chairman Wyden opened the hearing by highlighting the number of important trade markets where enforcement issues have grown. Among those challenges, the Chairman included an “aging” enforcement structure that is not adequate to deal with the “modern global economy.” He also remarked that CBP, which his responsible for enforcement of U.S. trade laws, is underfunded and more focused on security than trade. Chairman Wyden said the ENFORCE Act would help Customs refocus on its trade priorities.
Ranking Member Hatch (R-UT) said the Bipartisan Trade Priorities Act, which grants the President fast track authority to consider free trade agreements, would preserve the ability of the U.S. to rigorously enforce trade laws. He also commented that the ENFORCE Act would provide new tools to prevent circumvention of trade laws and expressed the hope that the Committee would work on these bills soon. Ranking Member Hatch also expressed concern that the Administration has not prioritized intellectual property rights, and criticized the President for not taking any actions against Russia at the WTO.
For additional information about the hearing, including opening statements, witness testimony and a webcast of the proceedings, click here.