National Defense Authorization Act for Fiscal Year 2017

Floor Speech

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Ms. CANTWELL. Mr. President, I join my colleagues this morning on the Senate floor in an effort to wake up the Senate to the fact that, without action by this body and specifically the Senate Banking Committee, Members are literally supporting shipping jobs overseas. I believe in a manufacturing economy. I believe in a manufacturing economy because so many people in the State of Washington work in manufacturing and because aerospace is an industry in which the United States is still a world leader.

Yet, by not filling the board of the Export-Import Bank we are putting the Bank out of business when we should be making sure that it can issue credit for manufactured U.S. products to be sold in overseas markets.

Why is manufacturing so important? Manufacturing is important because it pays a decent wage. It allows American workers to go from working class to middle class. It helps secure jobs in our economy that are stable for families who are sending their kids to school, and because it helps people move up to a better quality of life.

I am competitive in general. I don't want to lose a manufacturing base. But I also don't want to lose a middle class. What has happened is that the conservative views of the Heritage Foundation have thwarted the Export-Import Bank, and U.S. manufacturers have decided to put their manufacturing overseas. Think about it. How long is a company or a business going to put up with the fact that they don't have an export credit agency here in the United States?

Now, can a big manufacturer get its own credit? Sure it can. Sure, it can go and get credit. But can you ask it to sell in a global market? I will give you an example of a manufacturer in our State, SCAFCO, which sells manufactured grain silos to many countries in South America, in Africa, in Asia, and all across the world. Do you think they are going to finance every single deal they do? No, because they have to put money into their manufacturing facilities so they can stay competitive, and so they can have the best silos being produced.

So if they limited their business to only deals they could finance, they would have very limited business. Think about it. Whom do we make that requirement of? It is the customer who is buying the exported product who needs the business to get credit. It is the customer who is out there that wants to purchase what are great U.S. products who is having trouble. Think about it. You could be a small African nation trying to change your economy toward agriculture or you could be a small Asian country that is trying to upgrade the quality of life.

It could be, just as Prime Minister Modi said yesterday, that they want to diversify their energy portfolio. Well, guess what? We are holding that up and not allowing all of those countries to buy U.S. energy products simply because we refuse to have a working board at the export credit agency. How ludicrous is that? It is so ludicrous, because what happens if a U.S. manufacturer--an aerospace manufacturer like Boeing for example--wants consumers to buy GE engines and make sure that a South American company purchases U.S. manufactured Boeing and GE engines?

Well, they can go and purchase Rolls-Royce engines instead, and the European credit agency can fund the deal. Now, what has happened? GE has lost out on deals. Do you think all of those U.S. manufacturers are going to stay in the United States if there is no way to have credit financing? No--they are going to go where credit financing exists. So, by not moving forward on a fully functioning export credit agency in the United States, all you are doing is helping to ship jobs overseas. It has to stop.

We make great products in the United States. We are competitive. Our workforce is skilled. I will be the first to say that we need a more skilled workforce. I am all for providing our workforce with education and skills and every resource our country has because innovation is our competitive advantage.

But if we make great products and then we hamstring the financing of those great products--developing countries don't have the same banking and financial tools and edge that we have in the United States--you are basically saying: We are not going to sell our products.

I am a big proponent of winning in the international marketplace. I am a big proponent of saying that the middle class is growing around the globe, and one of the United States' biggest economic opportunities is to sell products to that middle class outside of the United States. That rising middle class means they can purchase more U.S. products. Well, they can't if we don't have a credit agency that finances exports. So why are we down here this morning as it relates to the Defense bill that is now being discussed?

Well, we are here because there are more than $10 billion of deals and transactions that are in the Export-Import Bank pipeline. Yesterday, Prime Minister Modi was here. The Indian Government has announced that Westinghouse would finalize contracts with the Nuclear Power Corporation of India to build six nuclear reactors by 2030. Well, those deals won't get done if you don't have an export credit agency to finance those deals.

The United States Senate is currently considering the National Defense Authorization Act. Last month, the Aerospace Industries Association and the National Defense Industrial Association wrote letters to Senate leadership urging them to make sure that we had a functioning bank. They pointed out that without a quorum, multimillion- dollar exports of aircraft, satellite, and other things won't get done.

So we just had this little argument on the Senate floor about how we are going to pay for things in the Defense bill and whether we are going to have balance with our other domestic spending. By not supporting and moving forward on the export credit agency, you are also making defense in the United States more expensive. You are making our security more expensive because you are not allowing that same technology--that we have decided meets our export controls, but we are willing because these are partners of ours--to sell that defense. You are making that difficult.

Hon. Mitch McConnell, Senate Majority Leader, U.S. Senate, Washington, DC. Hon. Harry Reid, Senate Minority Leader, U.S. Senate, Washington, DC.

Dear Senate Majority Leader McConnell, and Senate Minority Leader Reid: On behalf of the American aerospace and defense industry and our dedicated workforce, we are writing to urge Senate hearings and confirmation on the nomination of J. Mark McWatters to the Board of Directors for the U.S. Export- Import (Ex-Im) Bank. If his nomination is successfully approved, a fully functioning bank will play an important role in leveling the playing field for U.S. exports, creating new opportunities for U.S. companies, and strengthening our strategic alliances throughout the world.

Last year, we were heartened to see a bipartisan, bicameral supermajority vote overwhelmingly in favor of long-term reauthorization of the Ex-Im Bank. However, the Bank remains effectively inoperable for large-scale export activities. While the Bank is accepting new applications, the Bank's Board of Directors must have a quorum to act on transactions valued at $10 million or more. In the absence of a quorum, potential multi-million dollar export sales of aircraft and satellites are at risk, hurting not only major manufacturers, but the small and medium-sized companies that support them.

The global market is fiercely competitive. U.S. manufacturers need fair trade policy measures to level the playing field. Other countries are aggressively utilizing their Export Credit Agencies (ECAs) as a tool to advance their national trade interests, and availability of financing (instead of the quality of products) is a key discriminator if we do not have our own ECA. Our competitors also enjoy a greater range of support from their ECAs, including--but not limited to--a broader scope of programs.

Without the Bank supporting some of these investment-heavy exports, U.S. industrial production will decline, reducing revenue, innovation, and high-skilled, high-wage jobs throughout the aerospace and defense supply chain. The fact that this will lead to higher unit costs for the military systems our armed forces buy seems to be dismissed or ignored. Also, we are only now recovering lost capacity and market share in the commercial satellite market caused by over-restrictive export controls, which had a similar detrimental impact on our national security space industrial base.

In addition to supporting U.S. export sales, the Bank is an important foreign policy tool for the U.S. government as it bolsters American presence and influence abroad. By developing closer economic ties to other countries, we enhance not only our economic power, but also our national security. Countries which engage in close trading and commerce with each other increasingly align around common interests in global stability and security.

The Board is instrumental to the agency's day-to-day operations, since it manages the Bank's reforms and approves its transactions. The long-term reauthorization approved by Congress in 2015 contained risk-management provisions that require action or approval from Ex-Im Bank's Board of Directors in order to be implemented, including the appointment of a Chief Ethics Officer and the establishment of a Risk Management Committee. The agency cannot implement those provisions--or consider any other reforms--without a quorum. We urge the Senate to move swiftly on the pending nomination for the Ex-Im Bank's Board of Directors. Sincerely, David F. Melcher,

Lieutenant General, USA (Ret.), President & CEO, Aerospace Industries Association. Craig R. McKinley,

General, USAF (ret), President & CEO, NDIA.

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Ms. CANTWELL. Mr. President, I am on the floor with my colleague from North Dakota because we feel passionately about this issue. We are frustrated with the shenanigans that have gone on with the export credit agency. I say ``shenanigans'' because for a long time people said: Oh, well, there aren't the votes. We can't get this done. We don't have the votes.

Well, when you lift the veil behind some very conservative, threatening tactics, there is majority support, in both the Senate and the House of Representatives, for this export credit agency.

Now, one committee is trying to bottle up a nominee--if he doesn't like the nominee, come up with a different name. Come up with two names. Who cares? But what really is happening is that those on the other side of the aisle are enabling one individual to thwart the biggest manufacturing economic opportunity our country has to secure manufacturing jobs in the United States of America. Let's build great products. Let's have a credit agency that can finance deals to developing nations, and let's get those countries buying U.S. products. Why on Earth are we continuing these shenanigans so somebody can say to the Heritage Foundation: I got you one more trophy for your shelf.

That is not what America is about. America is about competing, succeeding, and growing economic opportunity.

I thank my colleague from North Dakota for her leadership on the Banking Committee in trying to move this effort forward and all of my colleagues who care about manufacturing who are willing to come to the floor and make this point.

Time is running out this session, before the summer recess, for us to get this done. It is time to get it done.

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