Hearings to examine Export-Import Bank Reauthorization.

Good morning. Thank you all for joining the XM Bank hearing. Mister Jovanovich, thank you for being with us this morning. Uh, we heard it today to talk about the importance of the XM Bank. And in its core, this hearing is about whether we will stay competitive with China, and strengthens American small businesses at home. The committee has the important task of reauthorizing Ex-Im Bank this year. And today's discussion is an important part of that process. China is aggressively financing its industries and exporting its influence across the globe. In emerging markets, China is shaping supply chains, setting standards, and advancing its national interests at our expense. China is also making long-term investments in its domestic economy to dominate the industries of tomorrow. We cannot afford to sit on the sidelines. We must ensure that American companies have the tools to compete globally. That's where the EXIM Bank plays an important and strategic role. The bank gives American businesses the backing they need to compete in strategic sectors, like energy, critical minerals, and events technologies. In many instances, these companies are competing with foreign peers with aggressive expert credit financing of their own. Exim Bank also helps the US workforce, alongside our allies and partners, to build more resilient supply chains and reduce dependence on adversaries. For example, under your leadership, one out one out of every four of the bank's transactions last year targeted projects that directly advance US competition against China. And that's a good thing.

Mm.

I applaud you and the President for playing a critical role in confronting China's economic aggression and securing America's position as the world's greatest and leading economy. But competitiveness abroad starts with strength at home. Just as important, XM Bank supports jobs and economic growth domestically. Across the country, small businesses and manufacturers rely on access to global markets to grow, hire, and invest in their communities. Many small businesses in the US do not have the resources to take on large export contracts without support. XM helps bridge that gap. In South Carolina alone, we have seen that firsthand. In the last ten years, in South Carolina, XM Bank has supported sixty-eight exporters. including small businesses across our state, helping to export roughly nine billion dollars. So many people know uh Boeing and Exim Bank, but they missed the other sixty-four small businesses that are absolutely uh dependent on the relationship they have with the Exim Bank. They represent real estate, real businesses, real workers, and real communities that depend on the ability to compete and succeed in the global economy. XM Bank also works through community lenders and local financial institutions, helping ensure that smaller companies, not just large corporations, have access to the capital they need to succeed. Nearly ninety percent of XM's transactions directly support small business exports, reinforcing the strength of America's entrepreneurial backbone and expanding opportunity in communities across the country. At the same time, we must be clear about what Ex-Im Bank is and also clear about what it is not. It is not a grant program at all. Ex-Im Bank provides loans and guarantees that are repaid, and it is returned nearly ten billion dollars to the treasury over the last three decades. That is an important point, one of great contention, but the bottom line is that the Exxon bank consistently and continues to to deliver for the American taxpayer making our nation stronger, more resilient, and frankly, keeping us in the black, which is a very positive part of your role at the Exxon bank, something we can all be very proud of. As we recon as we consider reauthorization, we also have a responsibility to ensure XM continues to work as effectively as possible, increasing efficiency in the deal-making process, and minimizing risk to the taxpayer. That means improving staffing, streamlining operations, and reducing unnecessary delays so American businesses are not left waiting while the competitors move forward. It also means ensuring the bank is nimble enough to respond to a rapidly changing global economy, while maintaining strong oversight and accountability. We have an opportunity to strengthen EXIM so it can better support American workers, strengthen our supply chains, and advance our economic security. Done right, reauthorization will help ensure that the United States remains the most competitive, innovative economy in the world. I look forward to hearing from you today about how Exim Bank continue to deliver for the American people and how Congress can help position the bank for success in the years to come. Senator Warren, you're now recognized.

Uh, thank you, Mister Chairman, and thank you for holding this hearing. The Export-Import Bank can be a valuable tool for facilitating exports, and for supporting small businesses and American workers in some of our most critical industries. At its best, the bank can help insure we build more things here in America. XM can help us rebuild our manufacturing base and reassure key supply chains. With this reauthorization, we have an opportunity to make sure that we're structuring XM lending in a way that achieves those goals. Now before the last reauthorization, which occurred in twenty nineteen, a small group in the Senate shut down most of the bank's lending and operations for nearly four years. But Congress eventually sat down and reauthorized the bank. I fought for and secured an increase in the bank's small business lending mandate from twenty percent to twenty five percent in twenty fifteen, and on up to thirty percent in twenty nineteen. Congress also provided the bank with new authority to confront the economic threat posed by China's providing enormous financing for its exports, and I supported those changes. The stakes now are even greater, in large part because of President Trump's chaotic economic policies. The president promised he would create quote " millions and millions of new manufacturing jobs". In reality, we've lost nearly ninety thousand manufacturing jobs since Trump imposed his illegal tariffs. He has slashed clean energy projects, which has driven energy prices higher and cost us thousands of jobs, while it has also taken billions of dollars out of the US economy. The biggest beneficiary of Trump's chaos has been China. The XM Bank cannot solve every economic challenge. I understand that. But we have a responsibility to make sure that it is used effectively to advance our economic and national security. So, I just wanna give a couple of examples, and I wanna follow on to Chair Scott's comments that I strongly agree with. First, we should update the China and transformational export program that requires XM to help US exporters who are facing competition from China in sectors like artificial intelligence, biotechnology, and renewable energy. Congress should also evaluate whether XM can do more to promote onshoring of other industries, like pharmaceutical manufacturing or critical minerals, that are crucial to our security. Second, we should ensure that XM's decisions help promote small businesses, innovation, job creation, and robust competition. That means strengthening programs like Make More in America. XM should not simply be providing support to the biggest and the most entrenched industry players or even worse making it easier for them squeeze out the small and mid-sized American businesses or helping to offshore critical manufacturing jobs. But of course there is more that we can do in a bipartisan way to reform XM as part of this reauthorization but I don't want to ignore the elephant in the room here. The deep corruption that runs through this administration makes it difficult to give the president and his appointees authority over huge sums of money, without some guardrails in place. We've already seen companies connected to the president's family, or to the families and friends of other administration officials, get hundreds of millions of dollars in federal contracts or loans, or the opportunity to take part in federal government deals. Foreign countries have thrown billions of dollars at the president, his family, and their friends to try to buy influence. This cloud could hang over XM too, especially because the bank lacks necessary safeguards against corruption. President Trump fired XM's inspector general as part of a larger purge aimed at eliminating transparency and oversight and he has failed to nominate any, any, democratic board members to XM, leaving an XM board that is only two republican appointees, in charge of what is supposed to be an independent agency with a bipartisan board. So, as we work on reauthorization, we must promote strong ethical standards and prevent the bank from being another corrupt tool. of this president. I hope we can do that together, Mr. Chairman.

Thank you. Chairman, the floor is yours.

Thank you. Chairman Scott, ranking member Warren, uh, distinguished members of the committee, thank you for the opportunity to testify today. It's a great honor to appear here as the 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 the scale today's economic competition demands. Why is XM important to everyday Americans? The bank is one of America's front-line economic tools, carrying out President Trump's vision for re-industrializing America, securing our supply chains, and ensuring our economy works for American workers and American companies, large and small alike. Today our companies compete in markets where competitors deploy massive state financing. Subsidies, industrial policy, all meant to capture these strategic industries. This has led to weakened economic security for the United States, and job losses across our country due to de-industrialization. The United States cannot afford to sit on the sidelines. That is why my team and I have set out to use the authority you have provided, to revitalize XM, to deliver results for exporters and manufacturers operating across America, and helping them once again win all around the world. A key part of that effort is expanding export finance access to small and sm- small and medium sized businesses, by working with community lenders across the country. So mainstream businesses can have access to capital, so they can reach global markets, and so they can grow jobs and create wealth in their communities. We focused the bank around four key priorities. Expanding market access for American exporters, ensuring American energy molecules. and technologies can reach every corner of the globe, strengthening our supply chain security, and ensuring the United States leads the industries that will define the future and support well-paying jobs. Simply put, XM is putting American workers, technology, and manufacturing first. The first project I approved as chairman was a direct loan to a company called Six K Additive, in Western Pennsylvania, under our Make More in America program, created by the Alaska administration, by the way. This transaction was significant because XM's financing crucially expanded domestic production and processing of critical minerals, used in aerospace and defense manufacturing. It also represented the first XM transaction coordinated with the Defense Protection Act Title Three program. XM is also supporting the export of American energy technologies, from LNG projects along the US Gulf Coast, to advance nuclear power and fuel processing. These projects help foster lasting economic partnerships with key allies, based on energy security, while supporting jobs and investment here at home. A more recent initiative is Project Vault. On XM's ninety-second anniversary earlier this year, I had the honor of joining President Trump in the Oval Office, to announce this nearly twelve billion dollar project to establish a critical minerals reserve. Project Vault is designed with one clear goal in mind. Ensuring American manufacturers and exporters in your states can absorb supply chain shocks and shortages of critical raw materials needed to manufacture all the powers our economy and everyday lives. It is uniquely American solution that brings together private capital alongside government financing to ensure supply chains driven entirely by market demand and the need of manufacturers large and small, and without taxpayer subsidy. In fact, As both of you kindly said, everything we do is in service of US taxpayers. Since the current government accounting rules were introduced, XM has returned ten billion dollars to US treasury to help pay down debt, all while maintaining a default rate lower than the average private sector lender. And we're just getting started. For the first time in ten years, I'm proud to say XM is projected to fully repay its appropriation and return a profit. Even further, XM is on track to authorize more transactions and support more US jobs than any year in its ninety-two year history. Our current pipeline includes seventy-one billion dollars in active transactions, spanning critical minerals, civil nuclear energy, and advanced manufacturing. These projects alone are expected to support forty-five thousand jobs. As I conclude, to sustain this momentum, I'm asking Congress to support three provisions in this year's reauthorization. First, reauthorize the bank. send that clear bipartisan signal to the market. And, please reauthorize our mission-critical China and transformational exports program. Second, address the constraints under our current default cap, recognizing that risk mitigants already required under current federal credit statute are sensible and work. And three, provide the hiring flexibility necessary to recruit the specialized expertise, required to execute increasingly complex transactions, that support American industry and national security. I look forward to getting into more detail on all three. Reauthorizing and strengthening XM will ensure the next generation of global industry is built with American workers American technology and American leadership. Thank you, and I very much look forward to your questions.

Thank you, Chairman. Uh, Miss Chairman, when, when you and I discussed working closer with the committee, I did, I did not mean for you to take my employees like Kevin. So my first question My first question will be for Kevin, uh, and as opposed to you. Just just joking, actually. Uh, Chairman, you just really did a good job of distilling some of the really important components to what will make the Exxon bank successful and make America even more successful into the future and that really is about reassuring American jobs, reorienting our supply chains here at home, and frankly, standing strong and tall against China. Uh, help us understand frankly, putting, putting more skin on the bones, how that's happening now at the XM Bank, under your leadership. And what critical pieces of the XM Bank today are missing from a staffing perspective. I think that's a really important part of the process.

Chairman Scott, thank you for your continued leadership and for all your support. You know, in our first meeting when I sat in your chambers with you, you brought up the CTEP program. And you asked me what my vision was. And actually I sat in this chair about a year ago and answered many CTEP questions. And I made you a promise that under my leadership, CTEP would no longer be an appendage, something that was an afterthought, something that was outside of our core operations. And the first thing I did was bring it in to and to, and and it's become the nucleus of everything we do. So CTEP has now been fully integrated in all of our global origination and business development efforts. In fact, the individual who ran Ctep now leads all of our global origination efforts. So every single significant transaction is now under her leadership. And the results speak for themselves. Only one out of every four transactions is a Ctep-oriented transaction. Candidly, it's hard for me to think about a single deal we're looking at of size, that doesn't touch Ctep, that doesn't have Ctep as the Intel inside to it, if you will. But what we really need to be successful across those ten transformational areas, We need subject matter experts. And it is really challenging to hire people that we need who understand these very complex industries under the current hiring framework. And so it's no coincidence that one of the only three things that we're asking for today is the ability to bring on folks in this capacity. And so they oftentimes they're not political hires and they're not individuals who are ready to pursue a career in government service, but they know their stuff.

Let me ask you a question on on that topic, because I think you just hit the nail on the head. We talked earlier about the importance of returning more back to the treasury, which really creates better insulation and protection for the taxpayer. Ten billion dollars is a story that should be told over and over and over again. Thinking about the importance of subject matter experts and the low default ratios that you have, it seems to me if you're gonna expand your portfolio, get into areas that we haven't been in

It's that and then some. Some of these areas are quite complex. For instance, you know, I sat and gave Senator Kim an assurance that we would pursue biotechnology efforts. And, you know, Ranking Member Warren mentioned in her opening statement the pharmaceutical needs that we have to reassure here in America. These are things you can't fake, Chairman Scott. You either know it or you don't. And so on the one hand you're absolutely right. It'll allow us to make better risk-adjusted decisions and be more prudent with the capital that we have, but also be able to allow us to tackle evenly all ten areas that are outlined in CTEB.

Second question, for the public who have n- they have no reason to understand the Exim bank, at all, frankly. I'm not sure all members of congress understand the excellent bank. I would ask you to really delineate why it's important for us to have a public apparatus that is engaged and involved and and why some of the smaller financial institutions can't actually do what you do and how working hand-in-glove with these financial partners is actually good for the private sector.

Yeah. I'll give you a real life example. I'll bring it to life for you. The best day in an entrepreneur's life, if you run a small medium sized business in America, could be the worst day of your career. What I mean by that is, if you get a large sales order that really increases your business, but the crisis is you don't know how to finance it, especially if it's export oriented, it's a real problem. And, Ranking Member Warren, when you and I sat in your office together, we talked about the fact that we can't allow small medium sized companies in America to simply rely on the largest banks that we have. And that's because they really don't understand what it takes to help unlock the working capital solutions they need. And so, and we need them because we can't talk about supply chain security without talking about small, medium-sized businesses. It's what they are.

Senator Warren.

All right. Thank you, Mister Chairman. So, President Yovanovitch, um, XM is currently authorized to make up to a hundred and thirty-five billion dollars in loans, guarantees, and insurance. It's a lot of money. And we may even raise that cap higher. So let me start with what I hope will be a softball. XM is required to evaluate specific statutory criteria like job creation and reasonable assurance of repayment in deciding whether or not to extend loans or other financial support to companies. Do you commit that XM will not extend loans based on whether a business is connected to President Trump or his family or his friends, or some other member of the administration.

It's an easy one. Regardless of who you are, Senator Warren, if you come to the Export-Import Bank of the United States looking for a loan, you face the same rules, the same process, the same criteria.

I like it when I throw a softball and you hit it out of the park. Um, look, there is so much corruption right now across this administration. it is important to ensure that XM doesn't become another piggy bank for friends of the president or other administration officials. And that is especially true when the president fires XM's inspector general, and when he refuses to appoint democratic members to the bipartisan board of XM. So, let me ask you about critical minerals. There's a broad bipartisan consensus that we need to quickly reduce our dependence on China. Earlier this year, President Trump launched Project Vault, a public-private partnership to stockpile critical minerals for US manufacturers. Now, it's backed by a ten billion dollar loan from XM. I see the value of an initiative like this. But the American people are gonna need a lot more transparency to be reassured that their taxpayer dollars are being used to achieve strategic goals and not just to hand out favors to the Trump family or friends. So, President Yovanovitch, do you commit to sharing with Congress all of the term sheets, the contracts, and the loan agreements with Project Vault?

Senator Warren, you you know me to be a systematic thinker, someone who takes uh this obligation very seriously.

I do.

We designed Project Vault to actually do exactly what you've described. To actually promote transparency, to be entirely demand driven by the market, so a decentralized decision making mechanism, held over, we held over thirty congressional briefings on this,

I,

over a dozen by myself.

I hear you, but answer my question.

We're we'll we're we're gonna we're gonna give you all the information you need within the process to better understand what's happening,

Okay, so,

what's going on.

we're, Congress can see the term sheets, the contracts, and the loan agreements, as so do,

We're

see I do with the project.

We're gonna continue to work with you to make sure you get all the information you need within the process.

Is that a yes?

It's better than this.

Okay, but I'm gonna just I'm gonna decide what I need here, OK? Good. Despite the promise of Project Vault, uh, reports indicate that it's open to largely blue chip original equipment manufacturers, and that leaves out a lot of the small businesses that we've been talking about, that make up the vast majority of US manufacturers. So let me ask, is it true that only large blue chip manufacturers are included in Project Vault?

Couldn't be further from the truth actually. And so there are two things I think really worth noting on this. Number one is that the participation of blue chip companies actually creates the credit profile in the entire project vault. That will actually allow small and medium sized companies to participate. That's number one. But number two, even the largest blue chip companies, when we talk about their supply chain that they're actually trying to fortify, that they want to insure that they can think about the just in case scenarios, not the just in time scenarios. They're made up of all those small companies as well. So couldn't be further from the truth.

So, but this underscores the point I've been trying to make about transparency. Public reporting suggests that this is a project focused squarely on large established manufacturers. That's what's available in the public reports. As you know, ninety-nine percent of US manufacturers are small or medium sized. We just wanna be confident they're not being cut out. And, it, I'm, I'm perfectly willing to believe you, but transparency is what will make that clear. So, I just wanna do one more on Project uh, Vault. And that is, I urge you to quickly expand Project Vault to small and medium sized businesses. Make sure they're getting a chance to participate here. Will you ensure that it is governed by binding ethics and anti-corruption standards, so that Project Vault is not used to benefit friends and family of President Trump or other senior administration officials.

It'll adhere with all the highest ethical standards and the best industry practices across the board.

I appreciate that. I support EXIM. And I wanna see it out there for our manufacturers. I just wanna make sure that the public can maintain confidence in it. Thank you.

So do I.

Thank you. Thank you, Mister Chairman.

Thank you, Senator. Uh. Thanks for being back here again. The last time, Mister Jovanovich, that you were back here, um, you appeared before this committee as the nominee to be the President and Chairman of the XM Bank. I asked you about countering China's state-backed subsidies and export credit agencies that support their exporters often at the expense of American manufacturers and what XM can do to level the playing field. You responded by saying that doing so will be a focal point of your tenure at XM. Under your leadership, what initiatives has XM launched to counter CCP subsidies? And what can we expect in the next few years from XM in this regard? And what may XM need from Congress to support those efforts, as we consider reauthorizing XM this year?

Thank you, Senator Rounds. So, first off, as I said a moment ago, I brought CTEP, the program that you helped forge and launch, into the center of everything we do. And so now, one out of every four transactions directly uh derives from the CTEB program but nearly every single large one touches it. So that's number one. Number two, we've really focused in on crafting our four strategic priorities that are meant to revitalize the bank that are meant to reawaken all this great ninety-two year muscle memory we have to strengthen our supply chains, to ensure that we're energy secure and dominant, to ensure our exporters can win everywhere around the world, and to make sure we can define the industries of the future, all four of those are meant to win. And finally, I think it's worth noting that the best thing that we could do is what we're here to talk about today is to send a strong bipartisan signal that the Export-Import Bank of the United States is here to stay and that CTEP is a critical tool along with it.

Thank you for that answer. Um, let's turn a little bit to AI and how we impact our capabilities here in the United States with it. You know, exporting the full AI stack. from the hardware layer like semiconductors or memory to the software applications like AI models to enable American AI dominance, it has been a priority of this administration. Can you walk us through the the work that's being done with the White House on the, on the American AI export program and your plans for increasing American AI exports across the AI stack?

Absolutely. So, first off, the Export-Import Bank is very proud to be a part of the president's global AI export plan. Uh it's led by I believe the most brilliant uh practitioner on artificial intelligence of my generation. He just happens to be a good friend and college classmate of mine, Michael Kratzios. Um we are really thinking about how this is a unique challenge that touches all of the aspects that you described. So first off, artificial intelligence means taking um energy and creating uh electrons, that then power bits. And so it all starts with energy security. But fundamentally we're thinking about how can we bundle together a US-led artificial intelligence solution that is accessible to countries rich and poor, large and small. Because everyone who comes and talks to us at our rounds, one of the first questions they ask say, how can I partner with the United States on artificial intelligence? Because they understand that getting AI right will define the twenty-first century and beyond.

Thank you. Uh, I'm just curious. Um. How large is your board?

Our board is uh five people by statute, uh today it's uh comprised of three uh individuals who create a quorum.

So there's two board member positions that are not filled at this time.

Uh there are technically three, there's also a vice chairman role that we have someone in an acting position but yes there are two full-time board roles that are open.

Okay. Working though with the existing with the existing uh quorum present.

That that's correct.

Thank you. Uh, XM supports US exporters by filling financing gaps from private sector, importantly for small and mid-sized businesses that are not well established and may not have access to the capital required to break into the market overseas. Would you please share with the committee how XM currently supports US-based small and mid-sized businesses, particularly those in rural areas such as my home state of South Dakota and the current steps being taken at XM to make sure that US small businesses are able to compete with state sponsored entities from China and foreign markets.

Absolutely. So, first off, it it is a key criterion to everything we do that we are adding something uh to the capital formation not detracting or replacing or crowding out private sector capital. That's very important. On the small medium sized businesses, it's actually nearly ninety percent of what the bank does all day every day. Which makes sense because ninety five percent of companies in America are small and medium sized businesses. Seventy five percent of all payrolls are provided and paid by small and medium sized businesses and as uh Senator Warren mentioned ninety nine percent of manufacturers are SMEs.

Thank you. Thank you, Mister Chairman.

Yes, sir. Senator Kim.

Yeah, thank you, Chairman. Uh, Chair Yovanovitch, thanks for coming on out here. Uh, I wanted to talk about civilian nuclear energy. US exporters often face competitors backed by aggressive state-directed financing from countries like China and Russia. To what extent is XM currently losing deals on speed and certainty alone? Uh, and would a tailored exception for nuclear from the default rate cap help close that gap?

I think having more tools, more clarity, more modernization, particularly tailored to nuclear would always be helpful, Senator Kim. But I think it's worth noting a couple of things.

Yeah.

I I wanna be accountable to the question you asked me when I was here a year ago. Um, nuclear power is very important to what we're doing on the energy security side, is one of our four priorities. Because, as you know, this is what builds the decades-long energy security and economic relationship. So that's number one. Number two, I don't think our nuclear power loan pipeline has ever been higher. We are very actively looking for opportunities to insure that US technologies and fuel supply chains are what power uh the nuclear future. And lastly, I think it's really worth noting that we'll go a step further. Um, it's really hard to win the nuclear energy future without focusing on the uranium enrichment supply chain. And so we've even taken great steps to support start-ups that are looking to re-shore some of that, because we're over-reliant and over-concentrated with having some of our strategic adversaries provide those services, but also looking for existing facilities where um the us us economy uh can have a greater role

uh yeah that's interesting i mean one thing i was thinking about is just how much the early financing commitments are important in this front um it can effectively determine you know who wins the deal so i i guess i wanted to ask you does xm currently have the tools and flexibility to engage early enough to shape those outcomes in the different projects you were just talking about

yes but uh yes we do in that we have loans that are very much tailored

Yeah, that's absolutely right. We need the early financing,

Mm.

but we also need to maintain that steady pipeline going forward because these are longer term projects uh and we need to have that assurance, is that right?

Couldn't have said it better.

Yeah a- and so i'd like to switch gears um, quantum i- is something that i- i've had a number of times uh opportunity to sit down and and talk to uh different industry leaders on this and it's just so important for our competitiveness on this front, so i i guess i just wanted to ask you what role do you think xm should be playing when it comes to ensuring american competitiveness and being a leader when it comes to quantum?

It's a great question. Uh, we're thinking about all it takes to power quantum computing capabilities. Um, so our energy security side is very important. But coming back to what Senator Rounds had asked about the global AI export program, it's also important that we help support nascent technologies that are looking to perhaps create a more modular a faster uh to market solution, uh, to ensure that we could scale. And this is something we can't afford to get wrong.

i agree with you on this i just ask that you take a closer look into quantum specifically i mean i guess you know i get it ai and and other aspects are incredibly important but when i when we ask this question to your team how many deals has xm done on quantum the answer back to us was one ever and i'm not putting that on you i'm just ever

no no no

and and i i just i point that out as i i just think that that i i don't want that to be a blind spot for us uh and so if we can just make sure we're following through on this and thinking about what is the appropriate level in which XM can do because I just think we can be doing more than one deal ever and I think that this is a place to grow.

K, can I ask for something in return to help make this happen? It's really important that we're able to have the hiring authority that we've asked for in our three, three requests. Because, it, again, it's really hard to fake understanding quantum computing.

Yeah.

And so, we just need to

No, I agree and I think, I think having the expertise there, I was also hearing that maybe we could have stronger expertise on nuclear as well. you know across the board and uh just with the last couple of seconds here biotech you you talked about how we talked about that in your confirmation hearing, where does that stand and and what can we do to make sure we're maintaining our competitive edge given what we're seeing with china's push on this

You know, we're we're doing our best to make sure that we're understanding where our vulnerabilities lie as to why we can't have more research uh persist here and more innovation persist here. Again, it'd really help if I had, you know, team members who weren't learning it on the fly or trying to better understand it as they go. So having the subject matter experts really helps. And we're tying it back to how we reassure a lot of the key pharmaceutical supply chains will also be a be a help.

Yeah, Chairman, let's make sure we're following up and make sure they get in the experts there that can do this technical work it's so important.

Thank you. Perfect.

Thank you.

I do think it would be important for my friends, uh, uh, Democrat friends to send some nominees to the White House that we were talking earlier about the importance of having, uh, a bipartisan board. You gotta have some nominees for that to happen. So I would encourage my, my friends on the left of figuring out a few nominees and send over to the White House.

Sounds good. Thank you.

Senator Ricketts.

Thank you very much, Mr. Chairman, and good to see you again, Chairman Jovanovich. Uh, the Export-Import Bank plays an important role in supporting American jobs and ensuring exporters can compete globally. In fact, there's a couple of Nebraska companies uh, Reinke Ir- Irrigation and Deschler and Preferred Popcorn and uh Chapman there are really, uh, uh, helped by the program there. So thank you for that. And, uh, for states like Nebraska, that means supporting agricultural producers, equipment manufacturers, such as the ones I just mentioned, uh, industrial exporters who compete in a tough global marketplace. Uh, but today those markets are increasingly shaped not by fair competition, but by state directed financing from Communist China. Communist China is our country's greatest existential external threat. Communist China has continues uh has and continues to deploy state-backed export f- financing at a scale that outpaces the US. In twenty twenty four alone, Communist China's official export credit agencies provided over twenty-three billion dollars in medium and long-term financing compared to roughly five point nine billion dollars from the US. If you were to take the average of China's medium and long-term export financing from twenty fifteen to twenty twenty four, it would be twenty five point three one billion dollars a year. Over that same period, the US averaged two point nine one billion dollars per year. The XM Bank's twenty twenty five Competitors Report to Congress confirmed these results. Those, the report also shares that US exporter and banking communities continue to view XM Bank as not competitive in the medium and long-term financing arena. Uh, Chairman Jovanovich, I know you haven't been in the role for very long, but how do you explain the recent low ratings on competitiveness from exp the export community and our stagnant stagnant levels of medium and long-term financing over the years?

First off, I think it's really important to note that, um, for quite a long time, XM has been hobbled by first not having a quorum for four years and I know that Sounds like it was a long time ago, but we're just starting to clear the scar tissue from not having a clear authorization and not giving the market a very clear signal that we're here to stay. That's number one. Number two, what I learned in my first hundred days, and a lot of this was actually informed uh by the very helpful book that you shared with me when we were together in your chamber, about Six Sigma, was really about bringing a data-driven approach and promoting accountability and transparency. And so what I found, Senator Ricketts, is people wanna win. And I manage a building that's filled with mission driven people, whether you're a political appointee or you're a career employee. And so giving them a very clear sense of what a win looks like, giving them very clear set of priorities, and pushing and working together has really made a difference. And so, whether it's Project Vault, which is a very key puzzle piece, and we hope a beginning to a whole set of solutions to address supply chain insecurity, de-risk our supply chains, create markets that are free, fair, functioning again, And that's critical. America wins, US companies win, our allies thrive when we have markets that are free, fair, and functioning, and that's what we wanna help promote.

Yeah, great. Well, uh, outside needing our help on reauthorization, how are you planning a course correction for edXM Bank to boost your competitiveness in this area?

I- it's already begun. And so what we've done is we've actually, um, taken down a lot of silos. You know, it's very difficult to eliminate those errors and reduce that. var- variability across uh outcomes, uh if you do, um we very much need the hiring authority that we dis- we're discussing here today. Discuss. It's mission critical. Uh and finally, what we really need to do is send that very clear signal, because we've studied in preparation for not just this hearing but for our proposal, how recent reauthorizations have affected the bank's operations. And any confusion or any concern that the bank won't be reauthorized in a timely and smooth manner. Really such a chill through the market and people just put pencils down with us Senator Ricketts and we can't afford that. We've got a seventy one billion dollar pipeline, forty five thousand jobs at stake that we wanna help support. So many of those small businesses. We just wanna keep doing what we're doing.

Great. Well maybe I'd uh the time remaining just real briefly on CTEB, the um XM Bank Inspector General's twenty twenty four review of CTEB. share the the just portion of share of XM's activity has been focused on two of the ten buckets, uh wireless communications and critical minerals. We've talked about the importance of critical minerals, but there's also semiconductors, biotech, quantum. We just talked a little bit from uh Senator Kim about quantum AI. Uh can you just quickly give us a status and s update on some of those other areas, and how you're gonna focus uh resources on those so that we can make progress there as well.

We're we're aggressively pursuing all ten, uh but what we've learned in short order is that you need the subject matter experts to properly pursue those.

It gets back to the hiring authority to get the right people.

They're It's com- they're complex. You can't fake it. You can't learn it on the fly. And especially when you're putting hard-earned taxpayer dollars at work.

Great. Thank you very much, Mr. Chairman.

Thank you.

Thank you very much, Mr. Chairman.

Thank you, sir. Senator Van Hollen?

Uh, thank you, Mr. Chairman. Mr. Chairman, welcome. I think you're hearing bipartisan support overall for the XM mission. And I Hope we can all keep it that way, and I think part of keeping it that way means sticking to that mission and not embarking on

I think if

political adventures that don't advance the core mission of XM. And it caught my eye recently when Secretary of Energy Chris Wright said it was a quote " real possibility that XM could provide quote credit support for large projects down there unquote meaning Venezuela", and that Secretary Besant made similar suggestions. Now, by law and under its charter, XM can only approve loans if it received a quote " reasonable assurance of repayment", unquote. Right. That's the standard. And Venezuela and its state-owned company, PDVSA, have been in default on debt since twenty seventeen. In two thousand seven, Venezuela nationalized foreign-owned na- oil projects and creditors have been pursuing billions of dollars of claims against Venezuela and its oil assets for years. So, simple straightforward question. Uh, Mr. Chairman, um, you would agree with me that Venezuela can't possibly meet that standard of reasonable assurance of repayment. Right?