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Mr. TOOMEY. Mr. President, this is an amendment that deals with the reauthorization of the Ex-Im Bank. I urge my colleagues to support this amendment. I think it is a very important measure to begin the process of phasing out a very unfortunate practice that we participate in, as do many of our trading partners, which is the active taxpayer subsidization of exports.
I want to be very clear. There is a very real risk that is carried by American taxpayers, and that risk is systematically underpriced. The fact is the Ex-Im Bank extends loans and provides guarantees to countries and companies buying American exports. It provides those loans and those loan guarantees under terms that are not available in the private sector.
There is a reason those terms are not available in the private sector. It is because the private sector necessarily requires full compensation for whatever risks they take, and there is a risk in any loan. The Ex-Im Bank underprices these loans systematically, and that is why it is important, that is why it exists, and that is why it does business that the private sector cannot win away from the Ex-Im Bank. The Ex-Im Bank necessarily and systematically underprices the risks that taxpayers are on the hook for. This is what many of us object to, the risk that the taxpayers are forced to bear.
In addition to enforcing taxpayers to incur this risk, it is quite unfair to American companies that have to compete with the foreign companies that get the subsidized financing. This isn't just theoretical. This happens all the time. Some years ago I was involved in a dispute because the Ex-Im Bank was going to finance the acquisition of equipment by a foreign--I think it was a Chinese steelmaker--which would enable them to make steel at lower prices than American steelmakers could make because the American companies wouldn't be able to obtain this equipment with the subsidy that the Chinese companies could obtain through the Ex-Im Bank.
More recently is the case of Delta Airlines, which has observed that the price they have to pay for jets is higher than the price paid by other countries that are operating competing routes but buying their aircraft through the subsidies of the Ex-Im Bank.
In 2008 President Obama, referring to Ex-Im Bank, said this is ``little more than a fund for corporate welfare.'' I think that is a little bit harsh. I understand how this has come to be, I understand why it has been extended, and I understand why people believe we have to subsidize our exports. It is because other countries around the world subsidize theirs. In other words, if our German and French and Chinese and Russian taxpayers are made to take a risk in subsidizing the sales of their manufacturers, then our taxpayers ought to take a similar risk.
I think there is a logical solution. Let's require the administration to sit down with our trading competitors and negotiate a mutual phaseout of all of these export subsidies. Frankly, it is in everybody's interest. We could have a level playing field on which no taxpayers are subject to this risk, no taxpayers are asked to subsidize the sales of private companies, and I think that is what we ought to do. This is what my amendment would accomplish.
My amendment says we will go ahead with the reauthorization of the Ex-Im Bank, but the first increase in the lending limit we are currently at--the bump-up of $20 billion that is contemplated in this bill that has passed the House--would be contingent upon the administration informing Congress that they have begun the process of negotiating a phaseout of all export subsidies.
I recognize this phaseout would not occur immediately but would be a gradual process that would happen over time. So under my amendment the second increase would only occur when the administration came back and informed Congress that they had, in fact, reached an agreement with our leading trading partners on a framework that would phase out subsidization of exports.
I think this is a very sensible way to deal with the only compelling argument I have heard in favor of forcing taxpayers to continue to take this risk; that is, well, everyone does it, so we must. Since that is the only reason, then let's start the process of persuading everyone else not to do it. We have tremendous leverage in both bilateral and multinational trade negotiations of all sorts. There are ways that the administration--if it makes this issue a priority--can persuade our trading partners that this is the right direction to go.
Each of our trading partners has their own constituency of taxpayers who would probably rather not be forced to subsidize this process just as we do. I think this amendment does it in a careful fashion that allows businesses to continue for now provided we start in a different direction, a direction that will avoid continuing to put taxpayers at risk.
I urge my colleagues to support my amendment numbered 2104.
I yield the floor.
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