Announcement by the Acting Chair

Floor Speech

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Mr. SHERMAN. Mr. Chairman, I have tremendous respect for the author and his intention here, but any amendment to the Ex-Im title means the Ex-Im title is open to the conference, which will kill the Ex-Im Bank. So we should not adopt an amendment that mostly restates existing law. We have, already, provisions which prevent the Bank from financing state sponsors of terrorism.

First, the Bank's own charter, which I helped draft, prohibits them from extending loans or any assistance to any entity that violates U.S. sanctions.

Second, as the gentleman points out, the Foreign Assistance Act prohibits any aid to state sponsors of terrorism but allows for a Presidential waiver, but that is a national security waiver, which is very limited.

I commend the gentleman for his amendment because it has caused the Ex-Im Bank to issue, just an hour ago, a pledge not to seek any waiver under any circumstances that they can concurrently conceive of.

But third, and most importantly, the last 10 appropriations bills have an absolute ban on the Ex-Im Bank helping state sponsors of terror, and there is no waiver allowed. Now, I would like the next omnibus bill, which already has this provision in it, to have the gentleman's language in it as well, and I look forward to working on that.

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Mr. SHERMAN. Mr. Chairman, this Bank is important. That is why Ronald Reagan said on January 30, 1984, that the Export-Import Bank contributes in a significant way to our Nation's export sales. We should not adopt an unnecessary amendment, the effect of which would be to kill the Bank.

Now, this amendment deals with accounting. As co-chair of the CPA Caucus, I understand the importance of solid accounting rules. As a CPA, we are the referees that make sure that accounting rules are followed.

The amendment talks about fair value accounting, more properly described as fantasy value accounting. Don't confuse fair value accounting with anything that is used in private enterprise or anywhere else. It is not the same as generally accepted accounting principles. Stick with generally accepted accounting principles. Stick with the principles consistent with the CBO, and those principles show you that the Bank makes money for the Treasury, which is why it transfers half a billion to a billion dollars a year.

Under fantasy value accounting, we don't look at whether the Bank is making money. We look at whether they would be making money if we lived in a fair world. So you would say, for example, in looking at the cost of funds and what it takes to borrow money, you could look at the accounting statements of Pizza Hut and say: Don't look at what they actually paid as interest costs, but what they would have paid in a fair world where they had the same interest rate as Jack's Pizzeria.

Well, maybe we don't live in a fair world. But the fact is, generally accepted accounting principles are to determine whether a company or entity is making or losing money in the real world. Stick with generally accepted accounting principles. Stick with the CBO. Stick with the CPAs. Stick with GAAP. Say ``no'' to fantasy value accounting.

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Mr. SHERMAN. Madam Chair, I thank the gentlewoman for yielding, especially because I rise in favor of this amendment; not because it is perfect, but because it deals with a fundamental problem in the underlying legislation.

How are we going to fund our highway system? Some would argue a tax on motorists; some would argue the general revenue of the United States. I don't know anyone who can really make the argument that we ought to have a tax on home buyers to fund highways; yet that is what the underlying bill does. It imposes a tax on everyone who gets a mortgage or refinances a mortgage and uses that for highways.

I am confident that if we pass this amendment, the conference committee will take a look at how to finance this bill and will come up with a better way than the idea of imposing a tax on everyone. That basically means middle class homeowners who use Fannie Mae or Freddie Mac in order to buy a home or refinance a home.

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