Ex-Im Bank nominee fairs well in Senate hearing
Ex-Im Bank lacks enough board members for a quorum, making large satellites, and any other deals over $10 million, bigger than what Ex-Im can finance. Satellite manufacturers in the U.S. say they need the bank to have a level playing field with foreign competition.
WASHINGTON — Kimberly Reed, President Trump’s latest nominee to chair the Export-Import Bank of the United States, received a warm reception during a July 19 Senate hearing, indicating a much stronger chance for her confirmation than Trump’s initial pick, Scott Garrett.
Members of the Senate Banking, Housing and Urban Affairs Committee spent the majority of the two-and-a-half-hour hearing questioning another Trump nominee, Kathleen Laura Kraninger, for director of the U.S. Bureau of Consumer Financial Protection, allotting little time on Reed.
Reed’s approval would bring Ex-Im Bank closer to the minimum three full board members needed to approve export credit transactions over $10 million, which includes virtually all telecom spacecraft deals. Ex-Im Bank only has one full board member today, Acting Chairman Jeffrey Gerrish, and has lacked an ability to support large deals since 2015. An Ex-Im spokesperson told SpaceNews July 19 that three other nominees are also awaiting Senate confirmation.
American satellite manufacturers, competing mainly against Europe but also more recently China, claim they have lost business to foreign competitors due to the lack of export-credit agency financing.
Lawmakers and trade organizations critical of Trump’s first pick, a former congressman who once voted against reauthorizing the bank, expressed a willingness to see Reed confirmed.
Sen. Sherrod Brown (D-Ohio), who once likened confirming Garrett to “putting an arsonist in charge of the fire department,” said Reed “is well qualified to lead Ex-Im,” and urged other members of Congress to support her confirmation.
“There are 109 export-credit agencies and export-credit programs throughout the world that support foreign manufacturers, but the U.S. has unilaterally and literally disarmed,” he said. “When it comes to helping exporters, the policy of some of our colleagues seem to be ‘America Last.’”
Sen. Patrick Toomey (R-Penn), one of Garrett’s outspoken supporters, said he was pleased with Reed’s testimony, “consistent with my interest in seeing reforms.”
Reed described Ex-Im as a necessary evil justified only because other nations have export-credit agencies they use to lure international business.
“In a perfect world, there would be no [export-credit agency] financing,” Reed said in her testimony. Reed said that if confirmed, she would work with international groups including the Organisation for Economic Cooperation and Development, the G20 and the World Trade Organization “to move towards the ultimate goal of eliminating all ECA financing.”
“Until that goal is reached, the United States should not unilaterally disarm in a fiercely competitive global economy,” she said.
The Aerospace Industries Association and the National Association of Manufacturers both issued statements supporting Reed’s confirmation ahead of today’s hearing.
The Satellite Industry Association, which represents around 40 companies, did not issue a statement before the hearing, but the organization’s president Tom Stroup told SpaceNews July 18 that Reed has support among its members.
“We’ve been polling our members to make sure there is support, and there is support,” he said. “Ex-Im Bank is important to our manufacturer members. There are other countries that have programs available, and often in seeking a bid from a satellite manufacturer, it’s a requirement [to win].”
Ex-Im Bank, in its 2017 annual report, estimated that nearly $40 billion in pending deals across various industries could not be fulfilled due to its lack of quorum.