Oversight of the Export-Import Bank

The Subcommittee on National Security, Illicit Finance, and International Financial Institutions will come to order. Without objection, the chairman is authorized to declare a recess of the committee at any time. This hearing is titled Oversight of the Export-Import Bank. Without objection, all members will have five legislative days within which to submit extraneous materials for inclusion in the record. I now recognize myself for four minutes for an opening statement. I welcome our distinguished witness, John Jovanovic, president and chairman of the Export-Import Bank. Today's hearing provides the subcommittee an opportunity to review XM's work and authorities as we consider reauthorization of the bank this year. Established in 1934, XM's mission is, quote, to contribute to maintaining or increasing employment of United States workers, end quote. As America's export credit agency, XM contributes to the global competitiveness of our exporters and their employees, providing financing when the market will not or when foreign exports are backed by another export credit agency. Through its loans, loan guarantees, and insurance programs, the bank's financing supported nearly 40,000 jobs and over $12 billion in exports in fiscal year 2024. XM faces a competitive export credit landscape from large foreign export credit agencies. Nowhere is this competition more acute than with the People's Republic of China, which continues to set export records. The PRC is the world's largest provider of export credit, and it operates outside the OECD arrangement. In 2024, the PRC provided exporters with over $23 billion in medium and long-term loans, quadruple what XM provided to American firms. To help XM counter this challenge, in 2019, Congress created the China and Transformational Exports Program, or CTEP. CTEP is widely supported, and I'm eager to see it reauthorized this year. At the same time, we must renew our work with U.S. allies to counter China's disregard for agreements they've entered into, like the World Trade Agreement, where they committed to be a market economy. This means exerting pressure together through forums such as the International Monetary Fund, the OECD, and the Paris Club. The administration recognizes the challenges our exporters face from China and is giving the bank an increasingly prominent role supporting key initiatives. From AI exports to critical minerals projects, such as the $1.4 billion letter of interest for Graphite One in my home state of Ohio, thank you. As XM looks to take on more strategic projects, I would hope XM will leverage authorities to expand support for nuclear exports, a long-time priority for this committee. A more ambitious role for the bank must also come with tougher accountability, particularly regarding processes and human resources. We are eager to work with you to strengthen the bank and its operations so that American exporters have the support they need to compete against subsidized foreign competition. XM puts America first by leveling the playing field and ensuring that our country is competing with other countries and companies simply need to compete with other companies. So I look forward to your testimony and our discussion today on how we can properly position the bank to achieve their goals through this reauthorization process. I now recognize the ranking member of the subcommittee, Ms. Beatty, for four minutes for her opening statement.

Good morning, and thank you, Mr. Chairman, for holding this hearing, and thank you, Mr. Jovanovic, for appearing here today to discuss the role of the United States Export-Import Bank. And let me also say that we're happy to have you here as a Midwesterner and that you come to us from DFC with a strong background in infrastructure and finance, and let me just say that's much appreciated. As you know, for more than nine decades, XM has helped the United States businesses export American-made goods and services around the world, creating economic opportunity for United States companies and workers. Although the bank's financing does go to some large corporations, 90 percent of XM's authorizations directly benefit U.S. small businesses. In every single one of our congressional districts, XM helps to develop the playing field so that small and medium-sized companies can better compete for global sales. Over the last decade in my home state of Ohio, XM authorized financing or insurance has supported some $6 billion in exports overall and $60 million in my third congressional district of Ohio alone. The Export-Import Bank is also critical to ensure the United States can effectively compete with China. The China and Transformational Exports Program supports United States exporters facing competition from China and ensures that we continue to lead in 10 transformational export areas, including AI, renewable energy, fintech, and semiconductors. By fostering American innovation and expansion into global markets, XM enables the United States companies to really go head-to-head with foreign rivals, resulting in more exports and more well-paying jobs, the operative words, more paying jobs in cities across the country rather than those jobs going overseas. And so as we prepare to reauthorize the bank this year, I look forward to working with my colleagues across the aisle to identify opportunities to strengthen XM and sharpen it as a tool to promote U.S. leadership. We must ensure that the bank continues to work for small businesses, create local jobs, support emerging industries where the United States can compete, and strengthen U.S. supply chains. We should also consider targeting reforms to increase XM's flexibility so that it can more effectively compete with countries that aggressively support their own industries. Democrats have a long record of working with XM, including forcing the reopening of the bank in 2015, I was here for that, passing the longest authorization of XM in 2019, I was here for that, and increasing the bank's lending cap. And let me just add that the last three XM directors have visited my district and taken tours, no pressure on you, just saying that. And lastly, we will continue to defend XM as a catalyst for economic growth at home and a strategic instrument to tackle global challenges. I am very eager to hear about the bank's activities under new leadership, that would be you, Mr. Chairman, and the ideas for key reforms that will enable XM to better fulfill its mission. I look forward to your testimony, and I yield back.

Today we welcome the testimony of the Honorable John Jovanovic, the president and chairman of the Export-Import Bank of the United States. Chairman Jovanovic, we thank you for taking your time to be here. You will be recognized for five minutes to give an oral presentation of your written testimony. Without objection, your written statement will be made part of the record. Mr. Chairman, you're recognized.

Thank you. Chairman Davidson, Ranking Member Beatty, and distinguished members of the committee. Thank you for the opportunity to testify today. It's an honor to appear before you as president and chairman of the Export-Import Bank of the United States. I'm grateful to Congress for equipping XM with the tools necessary to execute our mission to support American jobs, and I look forward to working with this committee to reauthorize the bank so it can continue operating at scale that today's economic competition demands. As many of you have noted, XM is one of America's frontline economic tools, carrying out President Trump's vision for reindustrializing America, securing our supply chains, and ensuring our economy works for American workers and American companies, large and small alike. Today, American companies compete in markets where competitors deploy massive state financing, subsidies, and industrial policy to capture strategic industries. This has led to weakened economic security for the United States and also job losses across our country due to deindustrialization. The United States cannot afford to sit on the sidelines. President Franklin Roosevelt founded XM in 1934 to support American workers and companies, large and small, and ensure they can export the goods, technologies, and services that ended up helping America become the largest economy in the world. 92 years later, our founding mission resonates stronger than ever. That is why my team and I have set out to revitalize XM, delivering results for exporters and manufacturers operating across the country and helping them once again win all around the world. A key part of that effort is expanding export finance access for small and medium-sized companies by working with the community lenders across the country so more mainstream businesses have access to capital, reach global markets, and grow jobs in their communities. Under my leadership and with President Trump's direction, we have focused the bank around four key priorities: expanding market access for American exporters, ensuring American energy molecules and technologies reach every corner of the globe, strengthening our supply chain security, and ensuring the United States leads the industries that will define the future. From artificial intelligence to advanced manufacturing and space technology, all the while helping support well-paying jobs across our country. I would also like to note that in response to concerns several members raised with me last year, we have taken concrete steps to improve employee morale and increase competitiveness by clarifying priorities, streamlining internal processes so letters of interest translate into real transactions, and improving reporting structures so our team can process applications more efficiently. Simply put, XM is putting American workers, American technology, and American manufacturing first. Supporting American manufacturing in particular is central to that mission. The first project I was grateful enough to have the opportunity to approve as chairman was a $27 million direct loan to a company called 6K Additive in Burgettstown, Pennsylvania. While this may seem like a large transaction because I know I'll be speaking about far larger ones and big numbers, XM's financing crucially expanded domestic production and processing of critical metals used in aerospace and defense manufacturing. Projects like these help directly counter our adversaries' monopoly on critical minerals processing and strengthen domestic supply chains for our industrial base. It was executed under XM's Make More in America initiative, created under the last administration by the way, and a program for which we're very grateful, and represents the first XM transaction coordinated with the Defense Protection Act Title III program. Now we're also supporting American leadership in emerging industries. Earlier this year, XM approved financing for a company called CesiumAstro, a Texas-based manufacturer providing advanced satellite communication systems. Their technology strengthens American satellite networks and support more resilient defense communication systems. That project will generate nearly 400 high-quality American jobs while strengthening our country's position in strategically important sectors. Through initiatives like our American AI Exports Program, we are ensuring U.S. companies lead the global race to deploy next-generation technologies that will define the future economy. XM is also supporting the export of American technologies, from LNG projects along the Gulf Coast to advanced nuclear power and fuel processing, an issue that I know has been important to this committee for a long time. These projects help foster lasting economic partnerships with key allies grounded on economic security while supporting jobs and investment here at home. Another important initiative is Project Vault. On XM's 92nd anniversary earlier this year, I had the honor of joining President Trump in the Oval Office, along with Chairman Hill, to announce this nearly $12 billion project to establish the first-ever U.S. strategic critical minerals reserve focused on non-defense manufacturers. Project Vault is designed with one clear goal in mind: ensuring that American manufacturers and the exporters in your districts can absorb supply chain shocks and shortages of critical raw materials needed to manufacture all that powers our economy and our everyday lives. It is a uniquely American solution that brings together private capital alongside government financing to secure supply chains, driven entirely by market demand and the needs of manufacturers large and small across the country. More broadly, XM today is no longer simply an export credit agency. It's a strategic economic tool bringing together capital solutions which strengthen America's industrial base, enhance national security, and ensure the United States wins the economic competition of the 21st century. It is important to note that we are doing so in a way that serves the American taxpayer. Since the current government accounting rules were introduced, XM has returned nearly $10 billion to the U.S. Treasury to help pay down national debt, all while maintaining a default rate lower than the average private sector lender.

Chairman, I hate to interrupt, but your remarks are part of the written record, and we'd ask to continue there, and we'll try to hold everyone to time limits here.

Completely understand. Apologies.

No worries. Thank you so much. And without further, I'd like to move to member questions, and so I'll recognize myself for five minutes for questioning. You know, Mr. Chairman, in the last authorization, Congress included the China Transformational Export Program, CTEP, in 2019. Since then, we've been through a global pandemic, China continues to be a challenge, they're far from being a market economy. Can you please tell the committee what additional tools you need to counter China?

Thank you very much for the question, Chairman Davidson. Thank you very much for the question, Chairman Davidson. Let me first give the committee an update on where CTEP is today. So I made a pledge during my confirmation process that I would bring CTEP from being an appendage at the bank and put it at the nucleus of everything that the bank does. And that's exactly what we've accomplished today. So today I'm proud to say that one out of every four transactions we do at the bank looks to the CTEP program. In fact, the individual who led the CTEP program when I arrived, I quickly promoted her to ensure that she also runs all of our origination and business development efforts around the globe because it's the lens of CTEP, it's that modern tool that you all equipped us with, which is mission-critical for us to achieve our objectives for the American worker. And so today our pipeline linked to the CTEP program, Chairman, is equivalent to all the deals that CTEP has done since its inception. In fact, this year we're going to approve multiples, multiple times larger transactions than we've ever done. So what's mission-critical for us to ensure that we can continue to keep America competitive, to ensure our supply chains are even more resilient and to de-risk them even further, is to actually ensure that we have CTEP as a tool. And that's why in the three points that we put forward here today as we work together towards reauthorization, ensuring that we extend CTEP in line with the reauthorization of the bank is absolutely critical.

You also mentioned Project Vault and of course that has applicability beyond China, but can you speak to how that fits with the China strategy?

Absolutely. So, you know, the problem is a very acute one. It's one that you're all very well aware of is that we've become over-reliant on supply chains that aren't free, they aren't fair, they aren't functioning, and they certainly aren't reliable. And so what we look to do is look to see where EXIM was uniquely positioned to bring together public and private sector capital to actually try to offer a shock absorber to companies large and small manufacturing in America to have them be able to look to a strategic reserve for critical raw materials that wasn't intended for the defense space because these are companies that, again, power our everyday lives, employ Americans all across the country and that's exactly what Vault does. It brings together $10 billion of EXIM debt financing, pairs it with nearly $2 billion of private sector capital so that we're taking risk alongside the private sector. And why it really matters is it ensures that companies, again, large and small across the country can have what they need, what they need when they need it most in a uniquely American dynamic framework so that we're not centralizing decision-making, we're not telling the market what it needs, in fact we're listening to what the market needs and we're providing them with a tool that will actually start to de-risk these supply chains.

Yeah, I think it's thoughtfully structured and creates a real demand signal, so look forward to working with you further on that. You know, Mr. Chairman, EXIM also launched a pilot reinsurance program during the last administration to transfer risk to private sector reinsurers and better protect taxpayers. That program was later expanded but still appears to be used on a limited, somewhat ad hoc basis. So what role does reinsurance play at the bank and, you know, how should we deal with that?

It's a great question and it's a structure that I really love and I think we need to expand and use further. The idea is how do we help transfer some of the risk effectively that we've taken on on behalf of U.S. taxpayers and help share that risk with the private sector? And in fact, it's by and large served as the template for Project Vault. So we have a program called PEFCO which has been in place since the 1970s, which effectively does this same thing. It takes risk off our balance sheet in a way that brings and crowds in the private sector and provides opportunity for us to achieve all of the strategic objectives we have for American workers, for American industry, all while sharing some of that risk with the private sector.

Yeah, thank you for that. And I think my last question, just, you know, under the Biden administration, EXIM was maybe shifted more towards domestic entities. This was a bit of a departure from EXIM's traditional financing of foreign credit for trade and exports. At a time the Inspector General flagged staffing challenges could have been part of that driver. So how's this change in EXIM's ambition been implemented?

Like any leader, you would have imagined that I spent my first 100 days really working diligently within the building to assess what we needed and what needed improvement. And so one of the things was ensuring that we have enough people, that they're well-positioned to compete, and that they work efficiently together. So I know we'll have hopefully more...

Wish I had left you more time, as I've shortchanged you, so please respond further. And I now recognize the ranking member of the subcommittee, Ms. Beatty, for five minutes for her question.

Thank you, Mr. Chairman. I'll get right into it because five minutes goes by so fast. Chairman Jovanovic, the mission of the Export-Import Bank of the United States is to support American jobs, as you know, by helping U.S. companies export their goods and services when private financing is unavailable. What steps is EXIM taking to expand access to export financing for small and medium-sized businesses, particularly those that may not have experienced navigating federal export programs?

Ranking Member Beatty, I love this question. During my confirmation process, one of the things that really puzzled me was when I assessed our community lender program. We had just north of 30 community lender partnerships across the country. That didn't make sense to me because we have 50 states. I thought at least we have one per state. And knowing what I know, having spent a career in energy commodities and critical infrastructure, probably across the country, it's oftentimes the local regional community banks which know these companies the best. And so what I set out to do from my first day in my seat was to say, okay, how do we actually give a shot in the arm to this community lender partnership program? And I was actually shocked to find out there weren't 30 plus, there were only two active relationships. And so one of the first things that we did was actually brought together our office of small business leadership with our senior political leadership and said we've got to do something about this. And so proud to say that we're very close to finalizing actually a partnership with the SBA, which we've been working on quite diligently to see where we can harmonize some of our export tools.

Okay, and I'm going to shorten you because I know you like this.

You know how to get a hold of me, so you'll answer any questions.

Right. So thank you and I'll want to hear more about what the real number is. Let me go to my second question. As you know, EXIM is required by statute to not discriminate on any project by its sector. That includes renewable energy deals like those in the solar and wind sector, employing hundreds of thousands of Americans and again, in my district. So this is a district question. And I'm going to ask you to do a yes or a no. Have you ever, have you cancelled or turned away any solar or wind deals thus far in your tenure?

Not that I know of. And what I could tell you is that we have the same process in place for any opportunity. As you can imagine, we prioritize and we're trying to sort of...

So I'm going to lean yes on that. I mean, I'm going to lean no on that, that you have not.

That's fair.

Yes or no. Will you commit to not discriminating against renewable energy moving forward?

I won't discriminate against any industry because the charter and the statute of the Export-Import Bank explicitly prohibits...

I'm going to write that down as a yes.

Sorry, my wife tells me I'm bad at the yes or nos too.

Thank you. According to the International Energy Agency, global energy invest is set to hit a record 2.2 trillion in renewable energy, renewable energy technologies compared with just 1.1 trillion in fossil fuels. These trends overwhelmingly show that current and projected growth is strongest in advanced and renewable energy development. Foreign markets are demanding clean energy and that is where they are prioritizing their energy spending. What is EXIM doing to help the United States advance renewable energy technology companies export their technology, protect American jobs and satisfy the growing demands of foreign markets?

It's a very good question. What you have to do is you have to look at an industry like that and break it down to its foundational pieces. And it's a supply chain security question fundamentally. And so all of the components that are required to fuel those industries are exactly what Vault is trying to address. And so those supply chains are no different than any of the supply chains that we're describing. They're over-concentrated, particularly the refining, processing, the midstream portions. And for decades, the United States, as we've de-industrialized, we've abandoned all of that work. And so it's absolutely critical that we secure those supply chains because there's a tremendous amount of commonality across them.

Okay, probably my last question, Mr. Chairman. He may have to give this back to me in writing because I know both of you love Project Vault. Project Vault has received, as you know, the largest financing in EXIM's history, underscoring the bank's prioritization of critical minerals. However, the mining of critical materials often leads to human rights violations, conflicts, environmental issues, and corruption that diverts resources. Would you support EXIM implementing a more stringent risk-based approach to perform independent due diligence of all projects, particularly in the mining sourcing practices of supported companies to avoid contributing to conflict and serious human rights impacts? And you're going to have to answer it in writing, I guess, because...

I'm happy to answer it now too if the Chairman permits.

Well, I'd ask that with deference to time we try to stay on the five, but I'd ask you to answer in writing. And I'd also point out that buying anything from China has human rights abuses and that's our current source. I'd ask unanimous consent to enter into the record a letter from the National Association of Manufacturers and National Taxpayer Union regarding EXIM's reauthorization. Without objection, so ordered. And I now recognize the gentleman from Oklahoma, Mr. Lucas, who is the chairman of the Task Force on Monetary Policy for five minutes.

Thank you for holding this hearing, Mr. Chairman, and thank you, Mr. Chairman, for testifying today. The China Transformational Exports Program, or CTEP, has made important progress in countering China's export subsidies globally. However, during the last fiscal year, CTEP's allocation decreased substantially. Can you share how the bank can bolster the use and usage and effectiveness of this important program?

Yes, absolutely. I think the most important piece, Congressman, was to ensure that CTEP was at the heart of everything that we did. And so I think as I mentioned a moment ago, I actually brought CTEP and its key team and integrated it within all of our origination and business development activities. So it was absolutely crazy to me to think about a CTEP team operating independently from all of the high-quality individuals who assess and look to bring in our largest transactions. So integrating them was important, thinking about how the 10 transformational areas apply to existing initiatives, and finally, prioritizing the opportunities where we could check multiple boxes and ensure that supply chain security, by the way, energy security, all these points really touch on CTEP.

Similarly, I want to follow up on the bank's 2025 competitiveness report. That report states that the bank is basically not competitive in medium and long-term lending export finance arena. How are you planning to for a course correction and what are the ways Congress can assist you in that effort?

So thank you for the question and supporting exactly what we're trying to do with regards to high-grading the organization. So part of the reason why the bank has not been competitive in recent past is it's been pretty inefficient, sir. And it hasn't actually thought about all the ways to actually optimize its internal process. There were silos of communication that we've broken down, teams weren't accountable for what they were doing, and there weren't clear KPIs. So with the strategic prioritization, with better communication, with more visibility and accountability on what people need to accomplish, I'm confident that the bank is going to continue to become more competitive. And what would be really helpful is ensuring and sending a very strong signal to the market that we're reauthorizing the bank and that we're able to continue to do what we do.

Let's discuss the renewable energy mandate. I'm of the mind that an all-of-the-above approach to energy dominance may be the most appropriate thing to do. How would giving the bank more flexibility when it comes to U.S. energy exports benefit domestic jobs and national security?

It's a great question. What we've done very aggressively, sir, is we've thought about energy molecules as an export akin to a piece of equipment or a technology or a manufactured good. And so we've started to use the same export credit guarantee tools and facilities to help open up markets for, for the first time ever, American molecules are reaching the shores of brand new customers, directly displacing some of our adversaries. And so we view exporting American molecules as key to not just facilitating energy security for our allies, but to really building those concrete ties that bind and ensuring that America remains as competitive as possible.

In 2024, the bank was rated last among all federal agencies regarding workplace culture. How are you working to improve the environment for staff so that the bank can be competitive in recruiting and retaining expert employees?

It's an excellent question. It's one that weighs on me a lot and has from my first day. I think the number one way to address it, sir, everybody wants to win. They want to know what a win looks like. And if you don't have key strategic priorities, if they're not robust, if they're not needle-moving, it's really hard to come to work every day and feel as though you're making an impact. So the strategic prioritization of the bank has been important, ensuring that we have the right resources. But again, what people also hate is when they feel as though they've spent a lot of time on something that goes nowhere. And so ensuring people's time is used efficiently, again, these are all, I know, very detailed answers, but this is, these are the details that I live in every day. We think all these things culminating together will address this issue.

I've long been a supporter of the bank and its mission to help Americans compete against foreign exports. We must work together to address some of these challenges so that it can continue to be an effective tool. And with that, I yield back, Mr. Chairman.

Thank you, Chairman Lucas. I now recognize the gentlewoman from California, Ms. Waters, who's the ranking member of the full committee. Recognize her for five minutes.

Thank you very much. Mr. Jovanovic, on February 2nd, President Trump announced Project Vault, an initiative to establish a private sector U.S. critical minerals reserve. What is this? This $10 billion project is a huge financial commitment from EXIM. And do you anticipate spending more than 10 billion on Project Vault? If yes, under what circumstances?

Ranking Member Waters, thank you for the question. And I know we've been trying to find a date for me to come sit with you, and I very much look forward to that. Our current commitment is 10 billion, up to $10 billion, assuming that certain conditions precedent are met. So that's what's currently envisioned with our loan.

So tell us a little bit more about the reserve.

So I think most importantly is really framing the problem. What are we grappling with? We're grappling with the fact that supply chains across the country, impacting companies large and small, have become susceptible to supply chain shocks. We've lived it in the recent past. And so at the same time, a lot of the manufacturers across the country have moved to a just-in-time inventory model. It's balance sheet efficient, we understand that, but it ignores the just-in-case scenarios. And so what EXIM was uniquely positioned to do was bring together our $10 billion loan, pair it with private sector capital to put it at risk alongside us, and bring together a public-private partnership to offer these companies a way to have what they need when they need it most to ensure American workers have that stability and that they can manufacture what powers our everyday lives.

Are these, are there ethics, anti-corruption, and anti-fraud provisions in the associated contracts? Are there contract provisions that prevent EXIM resources from going to companies owned by government officials or their families, including the president and his family?

It's an excellent question. And so what's really unique about Vault, Ranking Member Waters, is that it's actually driven by some of the largest blue-chip companies in the country and in the world who are manufacturing in America. And so these contracts will be commensurate with what they require. And so this is going to be the highest industry standards included in all of this definitive documentation through and through.

Are there ethics and anti-corruption and anti-fraud provisions in the associated contract? That's my question.

Yeah, it's my understanding that those are common industry practices and things that are included in contracts of this sort. And so I would imagine that anything that meets the highest industry standards will absolutely be included.

Can you assure members of Congress on the record that no family members of the president, nor his close friends and donors, will serve as senior staff or board members for this company that was incorporated as part of Project Vault?

Can you repeat the first part of the question? I want to answer it concretely, so I want to make sure I get it.

Can you assure members of Congress on the record that no family members of the president, nor his close friends and donors, will serve as senior staff or board members for this company that was incorporated as part of Project Vault?

I can absolutely assure you that we will have the highest standards, that we will abide by all of the ethical practices, which should address all of your concerns.

Okay, I had not intended on going to the next question, but I'm aware that the president has been talking with some countries in Africa about minerals. What is he doing? Is he wanting them to participate as private investors? Does he want to have, you know, acquire minerals from these companies and how?

So it's my understanding, and again, in the context of Vault, so we've envisioned American investors participating in the nearly $2 billion of private sector capital. But I think it's important to note that as it pertains to Africa, we at EXIM have a charter mandate to ensure that we engage in sub-Saharan Africa. And we think working in that context on supply chain security matters is of the utmost importance. And so, but again, the design of Vault actually prohibits us from making any of these decisions. Fundamentally, what it's driven by what the companies say they want, at what price, at what grades, they can even determine where it comes from. And so it really puts the onus on the market, Ranking Member Waters, to decide a lot of these things and simply us, our ability to facilitate it through a public-private partnership.

Thank you. Well, you know, having watched the president closely, coming up with his ideas from time to time, we have to pay close attention now because I understand what has happened with cryptocurrency and the ownership of that by the president and his families and board members. So we'll be watching this very closely. I yield back.

Thank the ranking member. The gentleman from Texas, Mr. Sessions, is now recognized for five minutes.

Chairman, thank you very much. Mr. President, welcome. We're delighted that you're here. I've been, as Frank alluded, we've been here for a few years and strong supporters of not just EXIM Bank, but its reliance upon American jobs and investments that would come here. I'm also a friend of Ray Washburne, who has a strong past with your organization. As proud of Ray and his service, being a Texan, we find much of the work that you bring to the United States helps a lot of jobs in Texas. Thank you. My question is a little bit different, perhaps, but it deals with you receiving a request from people to fund their projects. I get that. But also, there are a lot of countries that seek to do business with the United States and perhaps China. And it's a competitive marketplace. It's competitive for American business and opportunities. It's competitive for them. At the time you receive these requests, are you aware of other people who they are seeking loans from? And can you address, that really just helps us, I just want you to talk for 30, 40 seconds about the marketplace of competitiveness that is brought to your table and where you see that around the world.

Sure. Thank you very much for the question. And please don't hold it against me, but Ray Washburne is a friend of mine, and we're very grateful for everything he did with the BUILD Act and really put us in a great spot. So to answer your question...

I'll tell Ray that. He is a good man.

He is. Specifically to your question, we're absolutely aware, we're hyper-aware, we make it our job to be aware of what the competitive landscape looks like. And in fact, we've proactively built an initiative called Buy American, Build the Future, which actually is meant to capture demand for U.S. products, goods, services, and proactively put it forth so that countries, as just as you mentioned, sir, who come to us wanting to engage with the United States, we give them a one-stop shop. And in fact, we've had instances in the recent past where instead of saying, hey, what companies in America would you like to partner with, we say, what are your needs? What will it take to power the future in your country, and how can this serve as further connective tissue binding you to the United States? And we've suggested American companies. So we actually stepped in the role of sometimes being salesmen for American companies. Now, I must say, we're not always cheaper than our competition. We can't guarantee that companies operating and manufacturing in America always win, but we want to put them in the right position to win. And what we stress time and time again when we work with our interlocutors, our potential partners, our potential applicants, is we encourage them to think long-term about the risk-reward and think about the benefits long-term of partnering with America, and most people really resonate with us, sir.

Okay, now I want to go more to my question, and that is, do you have visibility with these people who seek to come to EXIM Bank? Do you have visibility whether they're also looking at someone else from another country who might be seeking to buy same or similar product, and that you become aware it's not just competitive for your bank loan, it's competitive whether America wins that contract? Do you have visibility at the time someone comes to you, or is that something that they do not tell you?

So I just want to make sure I understand the question. Applicant comes to us, they say they want to buy U.S. goods and services, but they're also contemplating potentially buying goods and services from a competing country.

Do you know that?

Yeah. Well, sometimes we do, sometimes we don't, but here's why it doesn't really matter, because we always push them to maximize their U.S. content. And in fact, we've taken deals where folks have come to us, applicants have come to us with a much more modest amount of U.S. content, and we've said, hey, in order for us to prioritize this and to make it a really big priority for us, you've got to show us that you're serious about U.S. content. We use that soft opportunity, sir, to push them to maximize it, and it's been successful in the recent past.

Good. Well, I'm looking for us to make sure that across the board we allow ourselves to be competitive. There's an old story which I'm sure because you've got a marketplace background, the old question was a salesman for Dell Computer was asked, will you make this computer in purple? The correct answer back is, what color do you want? And this is one of the things that Michael Dell taught his team, that I taught my team at AT&T. What do you want, we're going to get it there. Sounds like you do the same. Thank you for your forthrightness. Good luck, good success. I'll tell Ray you said hi. Mr. Chairman, I yield back my time.

Thank you, Mr. Sessions. The gentleman from California, Mr. Vargas, who is also the ranking member on the Task Force for Monetary Policy, is now recognized for five minutes.

Thank you very much, Mr. Chairman, ranking member, and of course to the witness here today, thank you for being here. First, I want to thank you for your service. I know you're a very capable person and I appreciate very much that you would take this job, and I wish you the best. I think that all of us do here. Now, I've been here a while also. I came in with the very wonderful ranking member, and I remember the fight that we had up here, quite aggressive actually, whether EXIM should exist or not. In fact, I heard some of the accusations against it. The accusations that were leveled against it was EXIM is crony capitalism, it's corporate welfare, the bank picks winners and losers, and we should exit the EXIM Bank. And it was interesting because it wasn't a partisan fight. There were very, very strong supporters on the Republican side, and of course there were very strong supporters here on the Democratic side to keep this bank going. We thought it was very important, and that's why again I do wish you well. I do think it's a very important bank. Interestingly, talking to other banks, one of the charges leveled against the bank was that it was taking work from other banks, and that's why they're picking winners and losers. And the other banks were saying, with the exception of one, was saying that's not true at all, in fact we work with them, it's something that's very beneficial to us. Would you agree that it's a positive thing, the bank in general?

I wouldn't do what I did unless I thought it was an extremely positive thing. You know, and especially with my family background, which we haven't got a chance to visit together yet, but I really hope we have the opportunity. You know, my grandfather worked at a steel mill on the south side of Chicago. My family started over in the United States after being decimated first by communism, first by actually fascism and then by communism in World War II. And we embody the American dream. And so when you think about an organization that's built to help companies large and small, help deliver and support on well-paying American jobs across the country, especially in communities where wealth creation has not been prevalent over the past few decades, sometimes maybe ever. And so where we have the opportunity to deploy our tools, whether it's helping companies for the first time sell abroad or, for instance, with Make More in America, which again we inherited from the previous administration, we're very grateful for it. We want to use it as a tool to roll out that big red carpet for everybody who wants to build in America, manufacture in America, operate in America for the first time, so long as it translates to more well-paying jobs here.

I wanted you to put that on the record because I think at some point we're probably going to have that discussion again up here. It seems to be cyclical. We'll have new members that come in and say how terrible the EXIM Bank is. That's why I think it's important for a person like yourself to put it on the record that this is a very good opportunity for the United States. It really does give us not an advantage, but it allows us to level the playing field in many ways against other countries that I think cheat, like China. And I do want to turn to China and I want to ask you, what flexibility do you need from us to be able to do your work? I mean, is there something that we should be doing to help the EXIM Bank? Because again, I was one of the ones that was strongly in favor of the EXIM Bank. I'm from California. I believe that again the bank has a very good purpose and again, like you said, I think you need to make it more effective, more efficient, and that's why I wish you the best. What flexibility do you need from us?

Absolutely. It's a great question and I really appreciate your impassioned support. As you could see, I share the mission. I think what's really critical is, especially as we've seen how effective CTEP has been in the marketplace, as I said, one out of every four transactions, biggest pipeline we've ever had, foundational at the nucleus of what we're doing. Communicating to the market that it wasn't just a blip on a 92-year history, that CTEP is here to stay, is probably the most important thing this committee could do to help us continue to achieve the objectives that you outlined, for sure.

Mr. Chairman, I hope that we can do that. I hope that we can work in a bipartisan way to do this because I again, I do believe in the EXIM Bank, I do believe that it's good for all states, not just for California, I think for all of the country. And in fact, that was going to be my last question. One of the, and I apologize, only 30 seconds. Does EXIM help the whole country or is it just help particular areas?

I was pleasantly surprised when I got to review the pipeline and the existing loans on the book. We're in nearly every district around the country, certainly in every state. And so it's our goal, especially as we look to things like the community lender program, it's inexcusable for us not to be partnered with at least one community bank in each and every state. And so we feel like we have the visibility to be able to grow our footprint across country.

Well, God bless you and good luck, my friend. With that, I yield back. Thank you, Mr. Chairman.

Thank you, Mr. Vargas. The gentleman from Kentucky, Mr. Barr, who is the chairman for the Subcommittee on Financial Institutions, is now recognized for five minutes.

Thank you, Mr. Chairman. Chairman Jovanovic, I wanted to just ask you a follow-up on the CTEP, the China Transformational Export Program. When we reauthorized EXIM the last time, many of us wanted to reimagine EXIM and the mission of EXIM and target it towards our strategic competition with China. And in fact, our support on reauthorization was conditioned on the creation of this China program. Tell me how much of the work at EXIM now is dedicated to implementation and the expansion of the China and Transformational Exports Program versus kind of just the normal functions of EXIM.

So first off, thank you for your continued support, but also thank you for your foresight, because it's quite ironic that it went from being a condition to reauthorization where we've come and I've come to say today, we don't want to reauthorize without CTEP. We couldn't imagine operating without CTEP today. And so I'm not sure if you were with us during my opening comments, but one of the first things I did was I said, I don't want CTEP to be an appendage. It shouldn't be off operating in a silo with its own team, with its own mission. It is at the core of everything that the bank does. And so the first things I did was actually integrated into all of our global origination and business development efforts so that every transaction that comes in the door that is screened, that is assessed, goes through a CTEP filter, and then we prioritize based on CTEP. In fact, I took the individual, a career employee who runs CTEP, and I made her the global head of all origination and business development activities. That's how important it is. And I think the numbers are starting to show results. One out of every four transactions we do is CTEP, pipelines never been bigger, we're multiples bigger in terms of underwriting CTEP transactions than we ever have been before.

Well, thank you. I appreciate your prioritization of CTEP because I think that's an important tool in the toolbox of economic statecraft we have in our competition with China, and we want you to continue to work to prioritize that. As global export credit agencies continue to evolve, many of our competitors, including China, are deploying a full suite of tools to support their exporters. What additional authorities or flexibilities does EXIM need in its reauthorization to expand the types of financial instruments it can offer, particularly to better compete with foreign export credit agencies that are deploying hybrid financing, equity-linked tools, or novel risk-sharing mechanisms?

Yeah, it's an excellent question. I think it's also worth noting that it isn't just the CTEP tools, it's the spirit of CTEP that actually runs through all of our four strategic priorities. And so I think what would be most important, and this is very much captured thanks to a lot of time I spent with Chairman Davidson, is the three priorities that we put forth for reauthorization, sir, actually capture optimizing our risk management system. That'll allow us to help pursue longer, more strategic transactions. That's where we're going to be most competitive.

Great. And I have long argued that the world needs an all-of-the-above energy approach to promote energy security. That means ensuring that advanced U.S. coal power technologies can compete abroad along with American-sourced fuel. We've seen in the past previous administrations and previous leadership at EXIM discriminated against coal technology or even just coal exports. Can you assure me that under your leadership, the Export-Import Bank will support our coal industry if it looks to your institution for support?

Absolutely. And I've already gone on the record with Ranking Member Beatty saying that we won't discriminate against any industry. Coal is no different, and in fact, in this current macroeconomic environment where energy security is stretched thin for many of our allies, coal will probably play a bigger role.

Let me ask you this. Talk a little bit more, I know you've spoken in your prepared testimony about Project Vault to establish a U.S. strategic critical mineral reserve through public-private partnership. What role could Congress play in institutionalizing Project Vault over time?

It's a great question. And actually, we have held about 30 congressional briefings, all of them voluntary, nearly all of them bipartisan, and have spoken with nearly everyone who has a piece of legislation that is trying to address supply chain security. And the best thing that you could do is keep going with all of our support, because this is what we're doing as a complement to all the legislative efforts. And in fact, I've provided written testimony on some of these pieces of legislation. And so what we feel as though is that we can actually learn a little bit about this dynamic and help inform all of these pieces of legislation, because Lord knows we need them all.

Well, thank you. And Chairman Davidson, just as we codified CTEP the last reauthorization, maybe we could consider codification of Project Vault in this reauthorization. I yield back.

Thank you, Chairman Barr. The gentleman from Illinois, Dr. Foster, who is also the ranking member of the Subcommittee on Financial Institutions, is recognized for five minutes.

Thank you, and Chairman Jovanovic. And I have to start out by just saying I'm a big fan of your operation. As you may know, I'm a manufacturer. The company I started with 500 bucks from my parents 51 years ago now supports 1,600 manufacturing jobs in the U.S. and as of the beginning of last year is now 100 percent employee-owned. And so this is a and and it's been a struggle keeping those manufacturing jobs in the Midwest. But I'm proud to say that that we have pretty much done it. And and also just from an Illinois point of view, since 2014, the EXIM Bank has helped Illinois companies export roughly $6 billion in goods, including nearly $100 million from my district alone. Under the last administration, EXIM revived the New Business Development and Outreach Division to engage with more businesses about about the services provided in the bank. And so what what are your plans generally for the the regional export finance centers as well as the international offices? And how does that work both in the especially in the online environment? You mentioned AI exporting AI products and stuff. It's not doesn't seem natural you'd need a in-person presence there, but for manufacturing, there's a huge advantage to having boots on the ground.

Yes, so there there are a couple of things. And first off, Dr. Foster, thank you for your continued support, especially from your vantage point, you really understand what companies both large and small are dealing with every single day. So a couple of things. Number one is it's the the community lending program and ensuring that our office of small business is actually quite active serves many purposes. One of them is actually to address exactly what you've just described because it's going to be impossible for me or anybody in my organization to know a community better than the regional lenders, the community lenders in those communities. And so there's an asymmetric advantage to being able to cover the country by way of the banks that know these people the best, that can elevate the best credit opportunities, and that could actually put people in a position to succeed. So that's number one. You also brought up an international aspect, which I think is really important. One of the issues that I encountered when I came to EXIM, it was very siloed. And a frontline economic tool for any administration, hardly one this dedicated to reindustrialization and economic alliances, should be well integrated. And so we've rebuilt a tremendous amount of connective tissue, whether it's with the Department of Commerce that enjoys offices in every single country where we have an embassy, they have a commercial mission, whether it's better partnership with the Development Finance Corporation, the Office of Strategic Capital, Small Business Association. A lot of them already have coverage throughout the country, they have offices. And so rather than trying to reinvent the wheel, Dr. Foster, we're saying how can we be better teammates and how do we for sometimes, you know, restore connective tissue, other times actually build them for the first time.

The one of the things that must make your job tough when you start moving into more rapidly moving industries, things like AI. You know, the the thing that I think I always think about your core business is you've got a customer, you've got a mature industry, you know what you're going to deliver, and you've got a potential order and you subsidize the credit for that and ensure the credit and that's, you know, a very good business model and you understand why you're profitable. It's tougher to predict where AI is going for any firm. And so you're taking it seems to me you're going to be taking business risk there. Similarly for the Project Vault, you're now going to be taking commodity risk that, you know, there's a good chance that you're going to buy a bunch of of, you know, critical minerals at some market price and then find there is no customer at that price sometime in the future. And there's also technological risk there. You know, from my point of view, a bunch of people are putting money into lithium and when sodium batteries are going to come in and wipe them out in the next couple of years for many, many applications. And so there are things like that and other there's this wonderful government-funded startup in Minnesota that is making highest performance permanent magnets out of iron rust and and ammonia basically. No critical minerals at all. And so this sort of technological risk. And so how do you handle this because it seems like there is a could be a downside for the taxpayer.

Dr. Foster, it's a very valid concern. In Vault, it's actually been addressed and it's not a risk that we're taking. And so all the manufacturers that come to Vault that want to subscribe to it, they take on the commodity risk. And so the U.S. taxpayer takes on zero direct commodity risk from their funding of Vault because they agree to repurchase the inventory at the same exact price. Commodity risk is theirs. All we're doing is we're trying to enable and bring together and crowd in private sector capital to start pushing them to think about the just-in-case scenario.

So so the taxpayer risk there is that the company simply goes bankrupt and cannot buy it back.

That's that's exactly right. Which is which is true in every single one of our loans.

Right. And if you keep your eyes on that, then that minimizes taxpayer risk. So keep your eyes on it.

That's exactly right. Thank you, sir.

Thank you, Mr. Foster. The gentleman from Texas, Mr. Williams, who's also the chairman of the Small Business Committee, is now recognized for five minutes.

Thank you, Mr. Chairman, and thank you for being here today, Chairman. Small business owner in Texas. Recently there's been increasing competition from foreign export credit agencies, particularly from countries like China, who are not operating under the same rules or standards as the United States. And China is deploying large-scale state-backed financing to support its exports and secure strategic projects around the world. It is critical, I think we all agree, that the United States remains a leader in this space and ensures our exporters have the tools they need to compete and win globally. So, Mr. Chairman, how is EXIM working to remain competitive globally, especially when competing against countries that have less transparent financing structures and do not operate under the same rules and standards?

Thank you very much for the question and thank you for your the very thoughtful focus on small businesses, of course. The way we do it is actually by doubling down what makes America best. And we don't do it by trying to emulate our competition. So we don't pollute, we don't disregard the law. What we do is constantly remind people of the value of partnering with the United States. It's a wise bet in the long term. And so what we really want to accomplish, particularly for our small, medium-sized businesses, because 90 percent of what the bank does every day, sir, is actually help small, medium-sized businesses export for the first time. Makes sense because 95 percent of companies in America are small, medium-sized businesses. And so by way of our community lender program, by way of growing our office of small business, the best way we can do it is to show up and actually have tools that are efficient, that are effective, that are on the ready to help these companies win.

We've talked about the importance of keeping EXIM competitive, especially as other countries continue to support major projects around the world. And if we're serious about competing globally, then we must ensure that EXIM can effectively advance deals that are in the United States' best strategic and economic interest. So again, Mr. Chairman, for strategic projects that clearly advance USA national interest, including major energy and industrial exports, what are some of the barriers for EXIM to finance more of these deals efficiently?

So I think it really comes down to our four key areas of prioritization. And so what we wanted to do is reawaken a lot of the muscle memory. So for far too long over the past few decades, EXIM has has not really been able to match what it was able to do in the postwar period and even during the Great Depression when it was started. And so by reawakening that muscle memory with things like Project Vault, focused on supply chain security, really advancing, as I'd mentioned a moment ago, our energy exports, so bringing American molecules to brand new markets for the first time ever, displacing the molecules of our adversaries. It's that sort of economic competition, that sort of shot in the arm that will really help the U.S. economy and have that translate into more well-paying jobs for everyday Americans.

Good. Small businesses are a key part of the export economy and EXIM has a statutory requirement to support small business participation in its programs. And as chair of the Small Business Committee myself, I know that for many smaller businesses, access to financing and export support can make the difference in reaching an international reaching international markets. So how is EXIM ensuring that small businesses are able to access its programs and compete globally?

We're very focused on growing the office of small business. We're very focused, as I mentioned a moment ago, by harmonizing a lot of our small business tools with our brother and sister agencies. So for instance, with the SBA, we're actively working on crafting a partnership to ensure that as they see opportunities that aren't a good fit for them and vice versa, that we don't lose the opportunity to help support small businesses. And so doing that in partnership rather than in a siloed manner we think is very important. And you know, finally, it's impossible, sir, to work on supply chain security without thinking about what a supply chain is. It's effectively a group of companies, large and small, oftentimes smaller than you think, that come together to deliver on one product, one service, one technology. And so it's hard for us to bring about supply chain security without focusing on small business.

We talk about small business and of course, as you know, 75 percent of the workforce, 75 percent of the payroll is generated by the people we're talking about. With that in mind, I yield my time back. Thank you.

Thank you, Chairman Williams. The gentleman from Illinois, Mr. Casten, is now recognized for five minutes.

Thank you, Mr. Chairman. Thank you for being here and I guess I want to amplify what you were just saying. I think EXIM has financed $200 million worth of projects in my my congressional district and I want to assure you that's not in one project. That's a lot of small projects and appreciate what you've done. I would like to understand your process for evaluating future transactions and particularly the credit risk questions. EXIM, as you know, has this obligation to require a reasonable assurance of repayment in exchange of each transaction. And as a as a hypothetical, this is not a gotcha question, but I think it's safe to say, correct me if I'm wrong, that it would be difficult for EXIM to ensure that repayment if you were making a loan to a government that was in prolonged sovereign default and had nearly $200 billion of outstanding credit that was trading well below par. Is that a safe statement?

We have an entire group of folks at the bank who are trained economists who really track sovereign and non-sovereign debt and exposure. All of those things would be taken into account.

So it would be it would be a challenge. And under your statute, you can't provide financing for a country that's under U.S. sanctions for terrorism, drug trafficking, correct?

Absolutely correct.

Okay. So the OECD has said that Venezuela is a category seven country for risk. EXIM's website, at least the last time I refreshed it, said that Venezuela is a country that's ineligible for any support. And yet Secretary Rubio, Secretary Besant have publicly said that they are considering using EXIM investments to rebuild the Venezuelan economy. I don't understand how that parses. So I guess my first question is just yes or no, is EXIM currently considering any financing proposals related to Venezuela's oil sector, including but not limited to anything with PDVSA?

Happy to clarify for sure. Everything you said is absolutely correct. Those things would have to change for us to be able to deploy any balance sheet.

So so as of right now, just a yes or no, are you considering any any investments or loans right now?

Where we are working is seeing where some of our tools, without deploying a single cent of our balance sheet, could actually help bring about transparency and accountability with how funds are flowing in and out. So we're really saying we have the bones to actually help create the systems and the frameworks. We're not contemplating putting any balance sheet to work at this point.

Okay, but you could put out

It's a distinction with a difference, I understand.

But you have but but your rules clearly say that you can't use your tools to countries that are under sanction. Do they not?

They say they say that we can't deploy capital. That's absolutely correct.

Okay, so what sorts of tools would you be using otherwise?

So if you think about what a any sort of country or any economy looking to rebuild after any sort of calamity is, you know, how does money flow in and out. And so we can offer some best practices, we can think about because over 92 years, sir, we've operated everywhere around the globe. So there's a difference between making a loan and helping people understand how capital flows could become more transparent and accountable.

Can you commit that can you commit right now that anything you would do in Venezuela would not expose taxpayers to any loss or would expose U.S. creditors to Venezuela to any loss or reduction in their credit position?

I can absolutely assure you that I will follow every single bit of law, procedure, charter.

I'm not asking about whether you apply I'm saying should the taxpayers look at EXIM right now and trust that they are not going to be in anywhere adversely affected financially from what EXIM might be doing in Venezuela in your discussions as you explore other tools?

As you mentioned a moment ago, we can't take any risk in Venezuela. So that that should answer the question.

Okay. I'm I'm belaboring this point because a few weeks ago Secretary Besant was here and could not tell us under what authority the United States was taking title to Venezuelan oil, which is one of the assets that's securing those roughly $200 billion of credit that sits higher in the capital stack. I can't tell, we still have not received any clarification of whether the United States has clean title to the oil. Right? We're now hearing that the United States is taking responsibility for managing ships that are holding that oil to the tune of some $75 million. There is a significant taxpayer exposure and I want to make sure that that contagion does not leach into the EXIM Bank. So can you assure me that all of this stuff they're doing is not going to cause contagion within EXIM?

As you know, I don't make policy and so I think a lot of those questions are better directed elsewhere. But totally understand your concern and what I can assure you at every turn that I and everyone in my building will continue to follow the law, will continue to follow every bit of EXIM regulation and every statutory commitment we have. Absolutely.

Okay, well, I I would like a commitment beyond just honoring the law, particularly in an administration that seems to think the law is optional as it relates to

I assure you it's not optional with me, sir.

I yield back.

Thank you, Mr. Casten. The gentleman from Iowa, Mr. Nunn, is now recognized for five minutes.

Thank you, Chairman Davidson, for holding this hearing. Thank you, Chairman Jovanovic, for joining us today. I think this is an important conversation. Look, as a former counterintelligence officer, I've seen firsthand how the CCP undermines the United States at every turn, and nowhere is that more clear than export finance. In 2024 alone, the People's Republic of China provided $24 billion in medium and long-term export credit, nearly four times what the Export-Import Bank of America provided. Moreover, we know that China plays by its own rules, using state-backed subsidies to crowd out American exporters and buy global influence. It's one of the reasons that I introduced the Neutralizing Unfair Chinese Export Subsidies Act. I'm proud it's now in the base text of this reauthorization. So let's be clear, EXIM authorization expires at the end of this year, you know that very well. And we need to make sure that we include these critical reforms instead of doing just a clean or do-nothing reauthorization. I would offer our time to act, Mr. Chair, is now, well ahead of our deadline. I'd like to begin by talking about predatory financing. Let's go to China. It's been the world's largest creditor since 2017. Its Belt and Road Initiative deployed cheap, predatory infrastructure financing to buy global influence, undercut competitors, including the United States and our allies, and trap developing nations in debt. More than two dozen countries now owe over 10 percent of their GDP to Chinese state lenders. Pakistan, $77 billion. Sri Lanka, $11 billion. Kenya, $9 billion. This is not developmental finance, this is debt trap diplomacy. I believe our legislation will help fight back against China's predatory practices. And so, Chairman Jovanovic, one of the things I'd like to ask you is, do you agree we need a clear strategy when it comes to forcing China to comply with the OECD's export credential standards?

First off, thank you for the questions and one of the things that I'm most proud of that we're doing, given your counterintelligence background, sir, is we're restoring a lot of the connective tissue across the federal government to ensure that EXIM has all the information at its disposal to be able to make really thoughtful decisions on behalf of American taxpayers. So thank you. Look, you've brought up a lot of great points. Number one, we've got to continue to put our best foot forward. We can't compromise our values, who we are, our law-abiding nature, our rules-based approach to things, and I don't think we have to do that to compete, but we do have to show up. And so in every instance where we see debt diplomacy or debt traps, as you call it, we have to think about another opportunity to sell U.S. equipment, to ensure that well-paying American jobs here at home could be supported by more demand centers. Ironically, that's what Franklin Roosevelt thought of in 1934 when he was trying to help the United States recover, and sure enough, we used that same industrial capacity, we mustered it, we mobilized it to help make us through the war effort and save the free world. And so this is mission-critical that we think creatively, proactively, and aggressively about how we could push forward American competition because guess what, it's not just about America, it then draws in our allies as we've been talking about. So building that connective tissue, doing it in a way that makes sense for U.S. taxpayers and also supports well-paying jobs here, that's what I'm here to do, absolutely.

Chairman, I would agree with you completely on this. I mean, whether it's soybeans or corn coming from the great state of Iowa, the John Deere tractor that does it, or the farmer or the manufacturer who makes it, being able to compete in a fair space is exactly what we want to do. I'm glad that EXIM has taken that as a priority. In order for us to get to those markets, I'll also highlight that we need to be able to have the key imports and inputs necessary to be successful. Obviously, we have worked a lot on the critical mineral space. One of the things that we've led the effort in with the White House is the use of the Defense Production Act on this committee to secure elements like phosphorus, glyphosate, critical input requirements for those exact manufacturers, farmers, growers here in the United States. The challenge is China continues to be at the other end of those export controls. How does Project Vault, one of the ones we've led on here, shield American companies from PRC supply chain disruptions, and what more could Congress do in this reauthorization to help this momentum?

I love this question. If we had tried to build a very typical conventional strategic reserve for critical raw materials, the answer would be nothing. Which is the reason why Project Vault is dynamic, it's demand-driven, and it involves a bunch of other features that are designed to actually help stand up more resource opportunities here in the United States and more midstream refining, processing, all of it that we desperately need because our supply chains are overexposed on them, right? And so as we think about, by creating a public-private partnership where there's robust capital at play, where there's private sector capital at risk alongside ours, we've now created a market actor, and by the way, one that is investment grade, that's high quality. And so what we've seen is companies come to us and say, can I offtake from an American mine through Project Vault? We say absolutely. Can I toll a facility through Project Vault? We say absolutely. But more importantly, as OEMs, as manufacturers replenish their allocation to Vault, they'll be pushed to do so from American sources.

Thank you, Mr. Chair, and let's get this passed in the reauthorization. I yield my time back.

Thank you, Mr. Nunn. The gentleman from California, Mr. Liccardo, is now recognized for five minutes.

Thank you, Mr. Chair. Thank you, sir, for your testimony. I very much appreciate the work of the EXIM Bank. I represent about half of Silicon Valley, as you can imagine, we are very interested in the work that you and your team are doing, we regard as being very important. So I appreciate the hard work of your entire team. One member of that team is the Inspector General, and back in 2025, Ms. Parisa Salehi and her office issued two reports that were critical of the agency, one relating to cost questions associated with a direct loan the agency awarded. On October 15th of last year, Ms. Salehi was fired without any cause being cited. Are you able to tell us why Ms. Salehi was terminated?

So just for the record, the Office of Inspector General had issued 93 issues that I inherited as open items on my first day. And what I said during my confirmation hearing, I absolutely stand by here now, which I believe in an independent Office of Inspector General, one that is lethally and laser-focused on waste, fraud, and abuse. And so what I've done since my very first day is stood up a task force of my senior-most team members to ensure that we address those as fast as possible. And I'm proud to say that here today, after having inherited nearly 100 of them, we are well over 50 percent of those being retired and addressed. It's not acceptable, I want zero outstanding. So what I can assure you is that we're going to continue to work with the Office of Inspector General. It's a very healthy, very important part of what we do at the bank because at the end of the day, we are stewards of taxpayer dollars. There's nothing more sacrosanct than looking at every single hardworking American and understanding that we have the responsibility of putting their capital at risk. Now we're doing it to promote national economic security and support jobs, but it's the greatest responsibility I've ever had in my life.

Thank you, sir. And can you tell us why she was terminated?

Pardon?

Can you tell us why she was fired?

That's a matter for the White House, it's not something I don't hire the Inspector General.

Thank you. One of the reports that was issued by the Inspector General, I think prior to your tenure, related to a very important program we have been discussing, the China and Transformational Exports Program. And I know there has been some concern expressed in the past by Inspector General and others that a disproportionate share of the activity of EXIM among the 10 transformational export areas really been focused in two areas. Some areas that have been less a focus are, for example, biotech, biomedical service, excuse me, biomedical science, quantum computing, high-performance computing. And there was some concern about whether or not, again before your tenure, EXIM had a strategy in place for some of these types of technologies and areas. Can you tell us about what progress has been made to focus on some of these areas where I think some only 12 percent, I believe, of the TEA authorizations have been focused in those other eight areas?

So first off, those need to be priorities for us. And in fact, I've built four strategic pillars, one of which is specifically focused on exactly that issue, which is how do we help American companies win in the industries of the future? Because those are exactly the sectors, the ones that impact your district because you know this better than anybody, are what's going to shape the 21st century. And so it is not optional, what we are absolutely trying to accomplish is ensure as we rate ourselves, as we measure success, is our ability to impact and do business there. Now, there are a couple of limitations there, which we're actively trying to address. One, we really need to hire subject matter experts. You can't fake your way through some of these very nuanced, very challenging industries. And so that's why one of the things that we put forth before this committee is to help expand our capacity to actually hire apolitical people, subject matter experts who have deep knowledge in their space because that's what's going to help us deliver on that. And furthermore, you also have to build connective tissue with the rest of the interagency because as you can imagine, a lot of people are trying to address this. Why would we try to do it alone? That's silly. And so we're very proud to be part of the President's Global AI Export Plan. It's led by my good friend and classmate Michael Kratsios, and we are constantly in touch and working together to ensure that whatever tools we have, we bring to the table and ensure that we can have these industries and have American companies lead them in the future.

Sir, thank you. With the remaining time I have, do we need to lift your 2 percent default rate cap?

What we've put forth is we think what we need to be really successful, to take this to the next level, and it's not to move the goalpost, it's actually to allow us to go back to what served the bank for 81-plus years effectively. It's effectively to optimize that tool. And so we feel comfortable as though with all the great work and conversation we've had with Chairman Davidson and many of your colleagues, and we hope with you as well, I'd love to come visit with you, that this is what's going to set us up for success.

Thank you, I yield.

Thank you, Mr. Liccardo. The gentlewoman from California, Mrs. Kim, is now recognized for five minutes.

Thank you, Chairman and Ranking Member, for hosting this committee hearing, and I want to welcome our Chairman, Jovanovic. I'm so sorry, I'm going to call you Mr. Chairman. Welcome.

That works.

Thank you. You know, in Orange, Riverside, and San Bernardino counties that I represent, we have seen the impact of EXIM Bank's crucial role in creating real jobs and real growth for Southern California workers like manufacturers and businesses to the tune of almost $200,000 just in the month of January alone. So thank you for that. You know, Mr. Chairman, how can EXIM continue to expand opportunities for smaller exporters in my district while still supporting the large transactions that sustain the U.S. supply chains and jobs?

Congresswoman Kim, first off, good to see you again, by the way. I can't thank you enough for your impassioned and continued support of EXIM. I greatly appreciated all the time we had to visit together, you and I and with your great team. The best way to do it is actually to help send a very strong, clear signal to the market that EXIM is here to stay and that the new revitalized EXIM is what enjoys bipartisan support, not just out of this committee, but across the board. Because we bring together exactly that mission with things like Project Vault. We're working with blue-chip companies, household name businesses to help bring them into a supply chain security framework. On the other hand, their participation allows much smaller businesses, businesses that don't enjoy the same credit rating or credit profile to participate. And on the other hand, I'm sorry you couldn't be here a moment ago, but I'm going to have to repeat myself, I'm sorry. We're working to try to expand our community lender program because nobody knows these small and medium-sized businesses better than their regional and local lenders. And so I was kind of appalled that we only had two community lender relationships that were active. And so our goal is to be active in every single state in America with multiple relationships covering all the country to ensure that if there's a company out there that wants to win, that wants to succeed abroad, that we help them do so.

Well, let's welcome you to my district and we can have companies come in and we can do a roundtable conversation and really promote EXIM Bank. I'm willing to do that and work with your team. You know, outside of the work in my district, which is California's 40th District, EXIM continues to be the tip of spear in our work to protect our supply chains and counter the threat from Chinese Communist Party and its economic coercion. The announcement of Project Vault represents that innovative public-private partnership that will help secure our critical mineral supply chain, something that I'm passionate about. And we've already through the Foreign Affairs Committee that I serve on, we authorized or reauthorized the DFC. EXIM is another financing tool that we're trying to utilize through the DOMINANCE Act that I'm working on, which I know you are supportive of. So can you talk about how, I mean, this is stockpiling our critical mineral supply chain also. And so can you talk about how you are planning on purchasing those critical minerals for the stockpile in a method that does not create a price surge and further worsen the shortage of the available critical minerals?

Absolutely. So first off, thank you for all the work that I know you were instrumental in to ensure the DFC was reauthorized, not just because I'm a proud DFC alum, but because we work with them consistently and having that sort of having all these puzzle pieces come together will really help American competitiveness. You ask a bunch of really good questions. They all inform the way in which we designed Vault. So the first question we asked ourselves after we said, okay, who are we, you know, who's benefiting from this and how do we get them to pick up part of the tab, right? We said, how are we not inviting more problems with this potential solution? And so a lot of the design and framework, having it be demand-driven, so we're not overriding very clear market signals, ensuring that we have a very clear ability to use Vault to actually help catalyze new projects in the United States, whether they be new mining projects. As you know, the real choke point is the midstream, the refining, the processing, all of the midstream handling. And so it's really designed to, on the one hand, deal with the market realities as we meet them today, but on the other hand, have the design, have the foresight, much like this committee did with CTEP, to say, okay, how can we use this framework to address the problems and the challenges of the future? And that's exactly what it's doing.

I want to quickly talk about the commercial diplomacy because that's one of the tools that is available to EXIM as you seek to finance quality deals. So can you talk about what efforts would help improve the commercial diplomacy and improve the competitiveness of U.S. businesses abroad?

You know, the biggest question that we face given some of the scar tissue from recent reauthorizations is, are you going to be around and do you have bipartisan all-government support? And so having the support of this committee and being reauthorized is the best thing we could do because they want to work with EXIM. Many of them have over our rich, robust 92-year history. They just want to know that we're here to stay in the future and I know you support that.

Yes. Thank you very much.

Thank you, Ms. Kim. The gentleman from Texas, Mr. Gonzalez, is now recognized for five minutes.

Thank you, Mr. Chairman. Thank you for joining us, Mr. Jovanovic. Earlier this month, the committee passed the bipartisan Save Our Shrimpers Act that I led with Congressman Troy Nehls. The bill sends a clear message that American taxpayer dollars should never be used to finance foreign shrimp farms that directly undercut U.S. fishermen and coastal economies. In South Texas and across the country, shrimpers and farmers are already struggling with cheap imports, rising fuel costs, and labor shortages. Yet instead of standing firmly with American producers, this administration has chosen to bail out failing economies like Argentina. How can the Export-Import Bank better prioritize strategies that leverage its financing tools to support American producers, including shrimpers and other agriculture industries, so that we're growing American jobs, strengthening domestic supply chains, and expanding U.S. exports instead of indirectly propping up foreign agriculture?

Congressman Gonzalez, thank you very much for the question and I have spent a good chunk of my career in your district and near it and in the great state of Texas. You can ask my wife. So we've spent a lot of time really in these communities understanding how they're very much tied to the natural resources that they have at their disposal, and whether it's waterways, whether it's shrimping, whether it's fisheries, whether it's multimodal ports, these are the lifelines of these communities. And so there are two things that I would note very specifically to answer your question. Number one is that we have a very stringent economic competitiveness test in every single one of our transactions to ensure that by way of whatever we're doing, we're not actually competing with an American company or an American industry. And number two is that by way of actually having strategic priorities that really put the American worker and the American manufacturer at the forefront and doing so in a meaningful way, we think is the best opportunity to help communities not just like yours, but across the country.

Okay, they're really struggling. I've been trying to find ways to keep them in business because we're losing the fishing industry in this country to foreign-purchased and grown shrimp.

And also the environmental impacts and harming the ocean and we totally follow that. We understand it.

All right, thank you. In my district, we have 12 EXIM customers who together account for more than 213 million in exports supported by the U.S. Export-Import Bank. South Texas sits at the center of one of the most dynamic cross-border economic corridors in North America and means our region plays a strategic role not just in economic growth, but in strengthening our economic security and the resilience of our supply chain under USMCA. At the same time, China is expanding aggressive export financing across Latin America as uncertainty in U.S. trade policy risks pushing partners to seek capital elsewhere. What more can EXIM do to expand or tailor its financing tools to strengthen supply chains within the USMCA region, particularly cross-border corridors, so that we can reinforce partnerships in the hemisphere?

It's a really important question. And actually, one of the things that we've done is integrate the President's National Security Strategy, which puts the Western Hemisphere at its core, into a lot of our underwriting and business development activities. And so we see a great deal of opportunities in the Western Hemisphere. We're looking to act on them pretty aggressively. But you know, coming back to your question, I think the best way we could do so is again, I come back to this market signal is so important because we have counterparties, we have applicants, we have other banks with whom we partner with, who have spent an entire career not knowing the EXIM of old, the historic, big-muscle, American robust institution that's delivered so much. They've just known a lot of the scar tissue of recent reauthorization efforts. And so sending them a very clear signal that it has bipartisan support is really important. And number two, helping think through how all of these supply chain elements work together. And that's where, you know, I made the point earlier in response to one of your distinguished colleagues is, you know, we've been overly communicative with how we're trying to effectuate a lot of our supply chain security tools and we think working together with legislators is the best way to do it.

Thank you so much. I yield back.

Thank you, Mr. Gonzalez. The gentleman from Tennessee, Mr. Ogles, is now recognized for five minutes.

Thank you, Mr. Chairman. Thank you, Mr. Jovanovic, for being here. So you mentioned the old versus the new. You know, some critics of the EXIM Bank of old would argue that EXIM benefits a small handful of large corporations versus truly supporting the small business owner. So you look at, you know, overall dollar volume concentrated in a hand and again, a small number of large corporations, whereas overall transaction is driven by the small businesses. Then the other question or criticism would be is that is the EXIM essentially subsidizing risk that the free market would otherwise not be willing to take on, sir? What's different?

Sure. All those are those are really good questions. They're compelling. They're catchy. They're just not true, especially of EXIM today. And so let me take the first one. More so than ever, I think we're focused on supply chain resiliency and that really means the small and medium-sized companies because 95 percent of companies in America, 75 percent of our payrolls are actually SMEs. And so I think it's a misnomer and we do it too. We talk about our office of small business. It's actually SMEs that make America thrive. But even in the larger transactions that you referenced, nobody does anything alone in this integrated economy. And so there are downstream, sometimes dozen, sometimes over 100 companies that will benefit from one of our loans. The second piece is really important. And there is absolutely a point of additionality because on the other hand, you wouldn't want me to sit here and say that I'm crowding out the private sector. And so when a private sector bank or an investor or any sort of lender wants to finance something, the last thing I want to do, having spent my entire career by and large in the private sector, is push them out of it because they're better suited to do it. However, there is this concept of additionality. And so where I challenge it though is we're not subsidizing it, right? This is a profitable bank. It's returned $10 billion since the new accounting rules have come into play to pay down national debt. This year it'll return all of its appropriations with profit for the first time since 2017, right? This is a bank that actually makes money for the taxpayer, but drives home the need to push forward national economic security. We can't sit on the sidelines. We see it all day every day. And I want workers and companies large and small in every single one of your districts to be able to win in every corner of the globe. And what I need for that is to send a clear market signal. There's a new EXIM, there's a new mandate, there's a new set of challenges that we're grappling with around the world. And with this key set of priorities, we can deliver and we can help protect America's economic interest.

You bring up a good point. So as my colleague mentioned, Ag for example. And we may have a national security reason why we want to support Ag in another country, whether that's to our own supply chain, our own resiliency, to displace or compete against China. But do we track, so again, he mentioned fisheries, if we're supporting a fishery in South or Central America or wherever, are we tracking what that is doing to our market and to the jobs here in the United States? Because as you talk about the priority is the taxpayer, I would also say that the priority is the American worker versus someone in Venezuela, Argentina, or wherever. And so do we track the impact that we're having on the flow of goods, the price of goods, and that effect on local economies, ultimately the American worker?

So if I had to sum up what EXIM does to somebody who's just walked off the street, I'd say we support American jobs, right? Fundamentally, everything we do has to translate, has to distill down to that. Absolutely. What we look at is economic competitiveness and are we creating and supporting jobs in America? For sure. But I'm really glad you brought up agriculture because I was hoping somebody would. Basically, what we have been, we've enjoyed as a country, a trade surplus in the agricultural space for most of my lifetime and probably yours. We inherited a deficit in the agricultural trade space of something to the tune of $50 billion at the beginning of our administration. Today, I think it's down to $28 billion. But for the first time, we're actually working with USDA to try to figure out how can we harmonize our tools the same way we're doing with SBA to help some of these struggling farmers ensure that their agricultural products can help reach every corner of the globe and open up new markets for them. So couldn't agree more.

And I only have a few moments, but you know, I serve as the chairman of the Homeland Security,

You know how to find me though, I'll come answer questions.

Right, cybersecurity. So the thing that keeps me up at night and makes me turn gray is China. So what are you doing to ensuring that we beat China on every front, every sector, and that we put America first?

The CTEP program is at the center of everything we do. Its senior leader is now in the middle of everything we do. It's one quarter of everything that is done by the bank, and at this point, its pipeline is bigger than ever. And so for America to win, we need to be reauthorized, we need to know that we have all of your support, and all day every day we'll defend the interests of the American worker, I can promise you.

Well thank you Mr. Chairman for being here and Mr. Chairman thank you for the hearing. Well, thank you, Mr. Chairman, for being here. And Mr. Chairman, thank you for the hearing. Yield back.

Thanks, Mr. Ogles. The gentlewoman from Florida, Ms. Salazar, is now recognized for five minutes.

Thank you, Mr. Chairman. Thank you for putting this hearing together. And to you, Chairman, for being here with us. I'm Maria Salazar. I represent District Number 27 in Florida, the heart of the Cuban exile community and the Venezuelan community. So we are delighted that President Trump took the initiative to rid that country from communism, and now is the time for us to be able to invest and help them revamp, specifically the oil industry. A few questions. I know you have $8 billion to lend. Any specific amount that you're thinking about investing in this priority for the White House? Let's start with that question.

So, Congresswoman Salazar, I'm sorry you missed a very animated discussion a few moments ago. But so fundamentally, as I said, the President's National Security Strategy really puts the Western Hemisphere at its core. And so one thing that we've done, I think at least for the first time in at least modern EXIM history, is we've actually integrated the National Security Strategy into our credit underwriting and business development efforts. And so it's a priority, we've made it a priority. And so what we've actively done, and in fact, I was very honored to be asked by President Trump to attend the inauguration of President Paz in Bolivia. And so what I encountered firsthand was 25 plus years of corrosive, corrupt leadership that had created this calcified layer of the...

But that's all over Latin America. So all over Latin America. Yeah, we do know. I know the area very well, but why don't we go back to Venezuela because of the time. Yeah, so specifically Venezuela, any type of American sectors that have approached you? What sectors within that country? What American companies?

So, so...

So I can then see how I can help you. Yes.

Now I totally understand, forgive me.

No problem. It's just time is of the essence.

We, we, you'll know where to find me too, I promise. We have some restrictions with our ability to actually deploy our balance sheet into places like Venezuela until some of the statutory issues are addressed. However, what we've started to do is say, how do we use our know-how, our best practices in conjunction with the State Department, in conjunction with Treasury, the Department of Energy, the Department of Interior? As you can imagine, as Secretary Rubio said it perfectly, there's a multi-stage plan in place. The initial is focused on stabilizing Venezuela. That's the President and Secretary Rubio's...

Right, but any specific sectors that you have in mind?

It's the natural resource sectors, as you can imagine, which are highest priority.

And what about any specific American companies that have approached you to help them be able to invest in Venezuela?

There are a number that have approached the White House, that have talked to us. So absolutely.

All right. Any specific ones that we can help you with in order to do their homework so we can start that investment? What is stopping them from investing in Venezuela?

As you can imagine, I have a lot to manage and so I'm not across all of the policy and all the restrictions. I think one of the things they're very focused on is, can I get paid for the work that I do? And the best way to think about that is transparency and accountability around fund flows. And I think that's exactly what has been said about EXIM's efforts to try to help them. I'm sure there are a number of things that you could do to help the situation writ large. But from EXIM's perspective, what we're trying to do is help build, rebuild their confidence, understanding that we still have some limitations in terms of what we can do in the country.

So what do you advise me to do? I have hundreds of hundreds of supporters who have the wherewithal and the resources and the willingness to invest in the country, but they're always coming to us and asking us, how can I make sure that whatever I invest in Venezuela will be protected and I'm not... these are Venezuelan Americans, people who have been in the country for 25 years. So there's a lot of, like you were saying, there's a lot of private sector resources that are willing to go back, but they need our back, our backing. What should I say to them?

It's a great question. To the extent that they're interested in the natural resource space, which I can imagine many of them are...

Yes, they are.

We've found that our partners at the National Energy Dominance Council are a fantastic interlocutor because they sit across all government agencies trying to mobilize all of our tools together because there are many instances, Congresswoman, where something I can't do, somebody else can. And so they're a very important clearinghouse and I would say probably the Department of the Treasury because many of these licenses are quite dynamic, the ability to operate in country...

But Treasury doesn't lend them the money, you do. So is there any way that we can invite you...

I can't lend them the money quite yet until some of these issues are addressed.

Understand, but they will. We're trying to create the runway for you to be able to do that. So is there any way that you can come to my district? I'm publicly inviting you to come and sit with these people, people who are very willing to help us, help the United States do the job in Venezuela. So it will not just fall on our, the United States Congress's shoulders.

Name the day, I'll be there.

I love it. Thank you. Thank you for your time. Yes, we will welcome you to District 27. I yield back. Thank you.

Thank you, Ms. Salazar. Chairman Jovanovic, thank you for your testimony today. Without objection, all members will have five legislative days to submit additional written questions to the witness to me. Those questions will then be forwarded to the witness for his response. Chairman Jovanovic, please respond when you get those no later than April 22, 2026. This hearing is now adjourned.

Thank you.