R. Bruce Josten is the Executive Vice President of the U.S. Chamber of Commerce. he joined me today to discuss the reauthorization of the Exim Bank:
HH: I was giving Rick Perry a hard time about Export-Import Bank. Everybody knows I’m a big supporter of it, and not just because it supports GE and Boeing, neither of whom I represent, and thousands of small businesses across the United States, but because it’s important for our industrial base. It’s important because the field that we vacate will be occupied by the PRC and other of our near-peer competitors. Joining me now is R. Bruce Josten. Bruce is one of the great men of Washington, D.C. He is the executive vice president of the government affairs at the Chamber of Commerce, and he has been taking on the tough battles for decades. Bruce, welcome back to the Hugh Hewitt Show.
BJ: Thank you, Hugh, pleasure to join you today.
HH: All right, lay out the case for Ex-Im. I just boxed a little bit with Governor Perry, who revoked his support after 14 years as governor. I don’t really know where the battle lay right now.
BJ: Okay, well, your audience first needs to understand that on a global basis, there are 59 export financing facilities, meaning there are 58 other countries whose national governments worldwide have export financing facilities to assist their multinational corporations when contract bids are brought. If we eliminate Ex-Im, we in a sense are unilaterally disarming, and then we are putting U.S. companies at a competitive disadvantage, and most especially the ones who sell expensive capital goods. You mentioned Boeing, so that clearly includes aircraft. You mentioned locomotives. That clearly includes GE, and turbines, that’s GE as well. And it puts them at a unique disadvantage, because their foreign competitors, foreign multinationals, will all still enjoy ample financing from their home country export credit facilities. And that financing advantage will easily knock U.S. companies out of the competition. And that is especially true in two areas, one, nuclear power, where any deal globally essentially requires support from an official export credit agency such as the U.S.’ Export-Import Bank, and the U.S. nuclear industry is completely dependent on the exports. There are virtually no new nuclear plants being built in the United States, while they are being built throughout the world. And they’re required on big infrastructure projects. And in this country, everybody on a bipartisan basis, in fact, politically, supports upgrading and modernizing infrastructure, since it’s the platform that your entire economy runs on. And if we get out of providing some credit agency support, again, ex-im kind of financing is required by most companies to even big on huge multibillion dollar overseas infrastructure projects.
HH: Now Bruce, I understand about 165,000 jobs are directly tied to ex-im financing, but there are also chain of supply and support jobs that are dependent upon ex-im financing. And our opponents, and I say our opponents, because I’m a big supporter of the bank, refuse to engage this. They love to say crony capitalism. They love to bring up Solyndra. And it’s very frustrating for me, it’s like shadowboxing. The key thing is those 59, those 58 other export financing facilities aren’t going anywhere except to wherever we leave.
BJ: Correct. Yes, and by the way, those other export credit agencies worldwide, just from our top trading partners, literally provide close to 18 times more export credit assistance to their exporters than the Ex-Im Bank here in America provided U.S. exporters last year. To your point, roughly 90% of the loan numbers that are dispensed go to small companies. And the big companies, obviously get the lion share of the dollars. Now in addition to those 164,000 workers, what’s frequently left out of this is yes, the Boeings and the GE’s and the Caterpillars and the John Deeres get the big contracts and dollars. But Boeing alone has 15,000 vendors and suppliers that are not included in those numbers. And GE has even more vendors and suppliers. So you’ve got a lot of smaller companies, mid-sized companies that are dependent upon these big corporations to get those kinds of contracts that they’re producing a component, an assembly part for.
HH: So my question becomes what are the odds of getting an extension with some reforms put in place, the Fincher bill, in other words, because I know the House is full of Tea Party dependent, and I think this is a mirage, I think they amplify their voices. But does Mitch McConnell have a way forward to save the bank until cooler heads and a Republican presidential administration arrives?
BJ: I don’t think the bank will simply be reauthorized as is, to your point. I think the key word was in your question. A reform bill, like the Steve Fincher bill, which has a host of reforms, and Steve’s made it very clear to Chairman Hensarling, who’s the opponent of Ex-Im, that he’s willing to consider any, other and all reforms that others would care to put on the table. And some of those reforms, for example, would be having the minority and majority parties appoint some of the people who are on the board of Ex-Im. Some of the requirements would be to work to increase more transparency reporting from Ex-Im to Congress, the more loans to small, mid-sized corporations and a better definition to define what qualifies as a small and mid-sized corporation, those kinds of things. The other thing here is, interestingly, some members of Congress challenge the accounting system that’s used by Ex-Im. The current system that Ex-Im uses, for example, showed a profit of about $2 billion dollars last year. In fact, Ex-Im has returned to the U.S. Treasury a little bit more than $7 billion dollars in the past decade. But you know, they complain about the accounting system. The reality is the accounting system that the Ex-Im Bank is required to use is a requirement of the Congress, not the current members of Congress, but statutorily by the Congress of the United States. So if they want to switch it to a different accounting system, then the Congress of the United States ought to come up with legislation and then convert it over to the fair value accounting system, if that’s what they wish. But I don’t know how you complain about this bank using a requirement under statute that the Congress of the United States itself imposed on it.
HH: So we’ve got a minute left. What’s the end game here, Bruce Josten, in terms of…
BJ: The current end game is they’re looking for a vehicle to attach this to. And the current chatter in town is the Highway Trust Fund, because you have bipartisan support. Everybody wants to move an extension of the Highway Trust Fund, at least a temporary one of a month or two here to get some breathing room to get to a longer term extension at the end of the year. So we’ve got to find a vehicle at the moment before the Bank expires at the end of June to do this. And right now, the powers to be on Capitol Hill are looking at the Highway Trust Fund probably as the vehicle that this could be attached to.
HH: You an optimist?
BJ: Well, I think at the end of the day, we will get the trade promotion authority done, which is hung up as you know this week, Hugh.
BJ: But I think we will get it out of the Senate, and we’ll get it to the President’s desk. And I think eventually, we will get a version of Ex-Im done. I think if it does expire, we’ll find all of ourselves in town a month or two down the pike figuring out how to recreate a version of it.
HH: That is good news, and I wish you well. Come back early and often as the fight progress, Bruce Josten, executive vice president of government affairs for the U.S. Chamber of Commerce, one of the guys who gets things done in D.C., a rare quantity, and but we like to talk to him as a result.
End of interview.