question. fairness is a very subjective term. i understand that. >> right. >> but we seem to have a federal policy that says, you know, if you create a product, and you want to sell it to foreigners, if you want to sell it to the chinese, the federal government will step in and subsidize you. but if you want to sell your product to hard-working americans, then, no. no subsidies for you. and so, i'm thinking about, you know, small businesses, my own district, a nexus personnel business, services in mesquite. the owner said my mother and father opened up the business they used their 401(k), other resources to pay for rent. we had to go to auctions to buy office furniture. you know, small businesses like ours quote/unquote can't rely on the government. again, i guess by definition, you received the subsidy, you

believe it's necessary to your business model, i accept that. but how is that fair to the other millions and millions of small businesses who sell to americans who don't get their products subsidized to the federal government? >> sir, i'd love to compete on a fair basis in america with my green technology to take bio gas into methane. i don't get a subsidy. i take exception to your remark. but my point is -- >> does xm not subsa die finance for your products? >> i don't believe that i'm subsidized. i don't believe that at all. >> yes, sir. >> let me speak to that point, if i may, mr. chairman with all due respect. and i do respect you from the bottom of my heart. my point is, you asked a question. i can't sell my technology here because there's barriers to entry to the market. and the barriers to the entry of the market is the oil and gas industry who subsidize the 15%

oil and gas depletion allowance. i don't get that as a producer. i can but my bio and gas -- >> mr. wilburn, we'd be willing to work with you and be much more competitive in areas. i've got limited time. so does dr. de rugy. have the opponents painted an apocalyptic vision and if so why not? >> i will don't think it's an accurate version, mr. chairman. for one thing, as i said in my testimony, less than 2% of u.s. exports are backed by xm. and that doesn't consider the possibility that these exports would happen independently of the existence, absent the bank. more importantly, we have to

think of what some of the other witnesses have said. so, for instance, a large part of the activity of the bank is to subsidize big companies. boeing in particular. and the loan guaranteed 66% of the activity of loan guaranteed through xm benefits boeing. well, boeing is selling planes to a company that could get access to credit as we've heard without the loan guarantee. more importantly, boeing has a really important and wealthy financing arm, and it could do a lot of things. and it does. >> my time has expired. the chair now recognizes the ranking member. >> thank you very much, mr. chairman. i'd like to explain to those who are wondering why there are three individuals presenting who all seem to be opposed to the

reauthorization. let me explain the rules. these three individuals were invited by the opposite side of the aisle. and we only get one witness. and that's mr. wilburn who's here. so i don't want you to think that somehow these were objectively chosen and that there are more people against reauthorization than for reauthorization. we just only get one witness to come here today. having said that, i'd like to enter this letter into the record. this is a letter that our witness told us about where he lost a multimillion-dollar contract because of uncertainty regarding the future of xm. >> without objection. >> letter reads, in view of the uncertainties of the reauthorization of the xm bank and project finance structure you propose have become problematic. we've made the decision in may this year not to proceed with your project offering. our previous partner developer has provided us assurance of the

certainty of obtaining satisfactory finance from the export-import bank of korea for our bio gas waste to energy project. with previous discussions with you, we had the impression that your company firmgreen can provide the best technology for our project. but without terms similar to that being offered by the xm bank of korea, it would be impossible for our company to conclude a transaction. thank you for entering that. i have other letters i'd like to read and share with you. this is from your district, mr. chairman. fritzpac corporation, during the past five years -- i'm reading an excerpt. during the past five years we've grown our international sales from 15% to over 35% of our business. we now have major trading partners in over 30 different countries including brazil, russia, india and taiwan. most recently, we exhibited our products at the balma international trade fair in munich, germany. in addition, our products were used in the construction of

sochi winter olympics in russia. so what is fitzpac organization, we're the inventor are of the best concrete mixtures in the world. we sell them to canada, as well as south and to new zealand. we may be small, in place we're thriving here in the u.s. and it is in no small part due to the services provided by xm bank. this is from your district. the president. we have a letter from your district. i'll read an excerpt. as a small business that employs 265 people, 25% of these employees are supported by the xm bank. we use xm bank to create jobs in rural america. xm bank levels the playing field so that small businesses can grow. xm bank is a self-sustaining operation that has a solid

history of making money for u.s. taxpayers. it has created millions of new jobs in the united states. reauthorization of the xm bank is a simple issue. xm creates and sustains jobs, strengthens the plan of american made goods and reduces our deficit. if xm bank ceases to exist, the deficit would decrease. and we'll lose jobs in texas. you're going to hear a lot from small business today. we have received a number of letters coming from all over america, many of them from small businesses talking about the importance of xm bank. jobs, jobs, jobs. as it was said earlier, we all talk about jobs. we've been through a redepression. we almost went through a depression. we still have high employment in many areas and we're all saying to our constituents that we're going to do whatever we can to provide jobs. but when we look at how we lost

our manufacturing base in this country and how xm is helping us to re-create and develop and sustain manufacturing which creates jobs, we say that that's what we want. but here we are, talking about not reauthorizing xm, which is responsible for these jobs and job creations. i submit to you these letters. i would ask my colleagues here on this side of the aisle, if you have letters or information from your businesses in your district, now is the time to share them. and with that, mr. chairman, i won't use up all of the time that you allotted me. of course you used extra time. i just think the message is clear, jobs, jobs, jobs, i yield back the balance of my time. >> the chair now recognizes the chairman from california from the policy subcommittee. >> thank you, mr. chairman, i

sat in this very room however many years ago it was, three or four, whatever. when the xm bank was reauthorized for its current reauthorization, there were about six people sitting throughout. the vast majority of the american people have never heard of the xm bank. this american had never heard of the xm bank before being elected to congress but yet, i doubt that the xm bank's footprint on on the american economy has grown or contracted since that time. but, yet, this room is full. and i understand there's an ante room that is also full. and it seems that the debate over this bank has become a proxy for a bunch of other things but amongst the things that it's become a proxy for in my view is how we operate around here. and how we operate in this place. and it seems there are only two options that are being discussed. one is the complete elimination

of the xm bank. and the other is the complete reauthorization of it as it is. but you know what, i think there's a third option. i think there's another way to do this. that doesn't involve complete elimination and doesn't involve, assuming that the bank has nothing wrong with it, and that it is absolutely perfect the way it is. some months ago i formed as the subcommittee chairman of the relevant subcommittee, i formed a working group to work on reforms for the xm bank. regrettably, none of my friends on the other side of the aisle, that's my fault, not theirs, were in that working group. but amongst the republicans on our side of the aisle, we had a brought spectrum of republicans. it included people who were and probably are still opposed to the xm bank and its reauthorization. and others who came in favoring it. and we did develop a work product which until now i have

not released to anyone. mr. chairman, i have a discussion draft. this is the work product of that working group which i would request be entered into the record. >> without objection. >> and for those of you out there, my -- this will be up on my website very soon. and i'll be issuing a press release on the same as well. now this is a discussion draft. it is in bill form. it has about 20 different reform to the xm bank. certainly i and i don't think in the group think this is the final answer or the only way or whatever. but it's an idea, and i believe an idea that we need to have, not only about this subject, but perhaps about other subjects as well. where we need to, rather than we're going to do this over here or this over here, that perhaps there's something that we can agree that there's some problems we need to fix. but maybe we can fix them.

and maybe this thing can do what it was originally intended to do, what we would all like it to do which is support american jobs and american exports. and enable us to compete against all of those other export-import banks around the world. and do so in a more objective, a more -- just a better manner than it is right now. and in my last little bit of time, mr. anderson, i heard you say that you felt the bank should be reformed. i didn't hear you say that it should be eliminated. is that correct? >> that's correct. and our position, by the way, the last time we were around when we were here, the reason there were only six people in the room, we've been working on this for five years because it's hurt us. and we got reforms, and they were ignored. so that's why our position the second time around is if it's not reformed, it needs to be abolished. because we got all the reforms. and they were totally ignored.

i can read you the language. but it's -- the language was strong. and the bank has totally ignored. >> okay. mr. anderson, and i don't know whether the reforms -- this working group, we didn't have you -- we didn't have boeing, we didn't have anybody in the room. it was just us working on what we felt was right. what we felt was right. and we did something which we believe begins to address your issue, doesn't necessarily eliminate your issue, but we believe it begins to address it. but that's what we tried to do. mr. wilburn, just picking someone on the other side of the issue. you're obviously supportive of the bank. do you have any objection to looking at things we can do to reduce the taxpayer but helping it? >> helping businesses compete whether slow, large on the global stage, i'm all for that. i'm a free market guy. basically, i agree with 95% of

what's been said here today. so, i mean, i applaud the delta chairman and the other members for stating that they don't want to abolish the bank. >> thank you, i yield back. the chair now recognizes the gentlelady from new york, miss maloney, marketing capital subcommittee. >> i thank the chairman and all the panelists and the ranking member. i believele we live in a very inconvenient truth right now. especially in global capitalism. and as much as we would like to think that american businesses may not need any help, but what they're competing against is that total support in some cases, subsidy, in some cases, even owned by the foreign government. and if we were not, we would be uni unilaterally disarming in the international stage putting jobs at risk.

oftentimes, what we hear in congress, we're not exporting enough. why isn't america exporting enough? and our number one exporter is boeing. boeing exports a lot of planes. but they're competing against airbus that is subsidized, financed and even owned by a government. and a lot of the areas where we're exporting and competing, the subsidies from their governments are far deeper and stronger that ours. and i fail to understand why we would in any way want to disrupt an agency that is helping export american goods, create american jobs and is not costing taxpayers any money. i think this is something that we should expand. i was at one export meeting where literally a company in new york was exporting clothing to china. i thought that was a great thing. why in the world why would i

want to stop an agency that is helping them to do that? therefore, i would like and request a place in the record, a document that's been signed by 835 businesses -- 865 organizations and businesses in america, supporting the xm bank, including the chamber of commerce. and also the national association of manufacturers. >> without objection. >> i got to think that 865 organizations and businesses can't be wrong. i'll tell you. and i just want to ask, mr. wilburn, the opponents of the bank claim that trade finance should be left to the private sector. what has been your experience with finding commercial lenders, willing to extend credit to foreign buyers who want to purchase your company's services? >> recently, i just obtained

some private finance for my three works in progress in brazil. the problem is, that i had to pledge my house, my intellectual property. my inventory. everything i own. i'm a risk taker. i'm willing to do that. but i can only do that once. because once i pledge that collateral for those three, i can't take care of the next six, seven that we're working on. and if there are those sources out there and the committee members know them, the chairman or anybody, or anybody hearing these words today, if you know these sources of private finance, please get in contact with me. and the other small business peep that i know that would desperately like to have that as a solution. thank you. >> i have all these stack of letters from businesses in support of the xm bank.

i'd also like to ask unanimous consent to put it in the record. and also one from labor. labor is supporting it on the basis this creates job in america. i ask you to place it in the record. >> without objection. >> and in response to mr. anderson. i'm a big fan of delta. i fly it like once a week. i love the airline. >> thank you. >> i was pleased to vote for the support of the bailout by the federal government after september 11th. and i think we voted to transfer the pilots' pension obligation to the pension corporation. so we provided that help. and that's a subsidy, i would say. and we needed to do that. i supported it. i voted for it. and i think also to this day, we have passed bills that restrict and prohibit foreign air carriers from competing with delta by flying routes within the united states.

that we are trying in our own way to help the private sector compete and win in a world economy. and provide the wonderful service that you do. but i, for one, am goi ing to b writing boeing and ask them to write in their own words whether they think xm bank has been helpful to allow them to compete and win. and who are their competitors and compare who they're subsidized if they are, and also to g.e., and to any small company that is getting any help from the xm bank and all our members should do the same. >> the time has expired. the chair recognizes the gentleman from alabama, mr. baucus for five minutes. >> i thank the scharmachairman. >> i would say to all members, mr. anderson, what he is saying

is identical to what he and the airline pilots' association, and to when we introduced the bill in may of 2012. and i met with the chairman in march. both sides expressed the concern that mr. anderson. and i was told at that time that they would sit down with delta. and i was also told that boeing would take a look at it. we then put in the language of the reauthorization directing the treasury secretary to initiate and pursue multilateral negotiations for reducing and eliminating government export

subsidies for aircraft. we specifically told them that we were concerned about wide body aircraft. to companies that were -- had government-owned subsidies. rich companies as mr. anderson said. and everybody expressed a great sensitivity to this. and we documented losses by american air carriers on overseas routes. and that's what we're talking about. we're not talking about routes within the united states. that's got nothing to do with this. our american airlines used to lead the world in these overseas routes. from the time that we reauthorized this with -- really, i say it's strong language, but it turned out it wasn't that strong. because it didn't forbid the sale. and i can tell you that they're

going to -- as long as we don't forbid them, they're going to have them. because when mr. hochberg met with my office. later when he testifies i'm going to show you my letter to him and his response which was a nonresponse. we've always got that. members also expressed to me great concern on the australian loan. but there were members on both sides. i wrote chairman hochberg about that on behalf of several members on august the 2nd. we then inquired about the status of our letter. and we were told they were going to respond. december the 20th, i woke up to read in "the wall street journal" that the loan had been approved.

after my august letter. no response. finally, on february the 19th, my office two months after the loan was approved and announced, an iron ore industry, the miners, all sorts of groups expressing concern, he wrote me back and said we approved it. in my letter i asked them to get with us and we wanted -- there was no detailed analysis of the financing request and how it would affect u.s. jobs. and i asked him to share that information with me. even -- i know mr. hochberg is here, i look forward to any explanation, but no one from xm gave us any information. they didn't even give it to us -- just said if i have

questions he gave me the number of -- his number. i said i could call him. this is a loan that had already been made. we -- you know, i had what i considered a commitment from xm bank and so did mr. anderson. on a directed prohibition that was costing probably 10,000 u.s. jobs. these jobs have been eliminated since 1978. when they starteding doing this. there are estimates that this one mine produces more iron ore than our entire u.s. production. and it shut down iron ore production in this country as a result. a lot of it. but we --

>> a lot of promise to reauthorize -- >> and even the treasury department which i asked if i could have 30 seconds -- i asked them what are we going to do -- they basically told us, what are you going to do, are you negotiating? well, wee formed a talking group. basically just blew us off. the staff. thank you, mr. chairman. >> the time has expired. the chair now recognizes the gentleman from california, mr. sherman. >> ranking member notes that only mr. wilburn who is outnumbered 3-1, but i'll point out his arguments are three times as good. therefore, i think it's fair. it's been noted that xm bank is financing the sale of airplanes to airlines that could get credit from somewhere else. that is entirely true. every one of those airlines could get credit from the export credit agencies of germany and

france. there's only one catch, they'd have to buy an airbus. so the question here is not whether the buyer could make the purchase. the question here is whether the buyer will purchase the u.s.-made product. and we're told that only 2% of american exports are at stake here. america is running the largest rate deficit in the history of the world. we can't afford to give up 2% of our exports. we can't afford to give up half a percent of our exports. we're told there's a scandal involving some officers of xm bank. there's also been a scandal involving officers of the united states navy, dealing with the repair of ships in the pacific. yet, no one is proposing that we de-authorize the united states navy. i look forward to working with the gentleman, perhaps the gentleman from california, to improve xm, because i don't

think that everything is perfect and none of these criticisms deserve any attention. one of those reforms would be to have language and even more clear language, to say that they can't make a loan or guarantee a loan without looking at the total effect on u.s. jobs. one particular area is airplanes. we're supposed to have an xm bank to finance exports. if you're talking about a power plant being built in india. the turbine is an export. if the turbine is not in india, it's not an export. planes are different. they fly. and whether a plane has been exported or not, doesn't, shouldn't depend upon the headquarters' building of the buyer, it should depend on where the airplane will be used. there are two approaches we could take. one is to allow u.s. airlines to

ask an export and therefore get xm financing on a plane they're going to use in international routes in competition for foreign airlines that are also eligible for xm financing should they buy american planes. the second approach is to deny xm financing to those foreign airlines when they're buying a plane that's going to be used to fly to and from the united states. but these are things to explore. to throw out 2% of our total exports because of one issue, affecting flights to asia and the middle east, i think would be a mistake. now, mr. anderson, you have financial statements that you send to shareholders. and maybe you've got really a choice. you could use gaap accounting, generally accepted accounting principles. sore some have suggested fairy tale accounting.

when you present a p & l statement, do you present the reports that you have based on your deals with your bondholders, or do you instead report the interest expense you would have had if you lived in a fair world? when i read your income statement do i see as income expense, what you're actually going to pay your lenders? or some notion of fairness as to what you would be paying if only the world were fair? it's an easy question. >> no, it's not. generally accepted accounting principles have various methods for how you account -- >> do any of them involve you reporting, as your interest expense, what the interest expense would be in a fair world? >> yes. in some -- in some instance, in the case of a merger, where you have to go back and fresh start an account. >> okay, some limited -- >> no, we have a lot of interest expense on our balance sheet

that is not the actual interest we pay. because the generally accepted accounting principles require you to market to market. >> that may be. but you don't do it and say, in a fair world, interest rates would be the same for you as they are for the emirates? you don't say pizza hut should report the same interest cost as the local pizzeria or the local pizzeria reports the same costs as pizza hut. you report -- you just had a big merger, or at least you have experience with it. in the ordinary case, i don't think xm bank is going to do a merger with its german competitor. you report interest expense based on the deal you negotiated not based on an imaginary and fair world. >> look, in some instances, you do, in some instances you have to come to a fair accounting

standard. i wish it were that simple. none of those reflect a really fair world. >> the time of the gentleman has expired. the chair recognizes the gentlelady from west virginia. >> thank you, mr. chairman. mr. anderson, how many employees does delta airlines have in the united states? >> we have about 78,000 employees in the united states. and probably 250,000 retirees. >> is that up or down or pretty steady? >> actually, we're hiring quite a bit right now. so we are hiring about 600 pilots a year and over 1,000 flight attendants so we're growing our business, without any government aid, by the way. >> you mentioned in your comments with xm bank's behavior in financing wide bodies around the world, you kind of quantified it to maybe 1,000

jobs it might have cost you. could you expand on that a little bit? >> well, that was in specific response to air india. when i hear the arms battle -- what the xm is doing is putting our employees in the cross fire. because it's u.s. jobs lost when heavily subsidized foreign-owned airlines are able to also get a subsidy from our treasury. and it has reduced the growth of our company. this is the first year it will actually have any real growth in the last five. and we see it in the marketplace by the entry of carriers with xm bank finance, below mark financing. >> so the argument to either relook and reshape like mr. campbell is saying or de-authorize, it is a jobs -- it's small business jobs, but it's businesses that have 75,000 employees at the same time? >> exactly. and the point is, i don't

understand why we don't have the same view about jobs that are hurt by the bank, as we do about small business jobs. these are all really important jobs. in the small business part of what xm does is actually really small and it's pretty new to the bank. because after the last reauthorization fight, the bank went into a really aggressive marketing mode to small business so that it would have constituents in every congressional district. let's set that aside. the real issue is 90% of this goes to the top ten biggest companies in the united states. that are well-funded and well-capitalized. and that's what we're focused on. >> thank you, mr. wilburn. i'm over here. i don't know if you remember in my opening comments, i commented about the administration of the xm bank's policy of not funding coal-fired power facilities and clean coal technologies, except

in developing companies. your a green energy company developer. and i love green energy jobs. we love our coal jobs, they're just as important to us as a green energy job is to you. do you think, in thinking about this, that it is a proper place for an entity such as the xm bank to say to american employers and american workers that because we have a certain environmental belief, that we should disenfranchise one american job over, say, one of the jobs in your company as a green energy company? don't you think those jobs should be treated equally if we're going to be looking at financing exporting across the globe? >> let me respond that basically i'm very supportive of technologies that are good for the environment. and i think the coal industry, particularly my family, has a background in that and we're affected by it.

i think the point here is, though, that the bank is looking at the environmental policy. okay? and i'm not an expert on it. i served on the advisory committee of the export bank on the environmental and renewable energy committee. and what i try to advise them of is be cautious when we're taking a look at the environmental impact. make sure they have the data. make sure that they have the studies and the reports. don't just make arbitrary decisions. and i think for the most part, they have been listening to me but i understand your argument. and all i can say is that i want an environmental sound policy by xm bank that creates and protects american jobs. >> thank you, thank you. i would say i looked at the your list of vendors. you're in around around the state of west virginia, you just need to slip over the state

there and export -- >> give me the names of businesses i'll be happy to. >> thank you very much. >> the chair recognizes the ranking member of the subcommittee for five minutes. >> thank you, mr. chairman, and thank the ranking member. let me first -- first, i want to say thank you to mr. anderson. you know, delta airlines is one of the largest employers in our district, and we really appreciate what you've been doing at jfk airport and the expansion there and the folks that you've been putting on. so we want to thank you for that. as a result i made sure that i was reading your testimony very, very carefully, because we do want to create jobs. and i think that's tremendously important. but in looking at it, i just wanted to double-check. because i'd just like to ask, first, out right, and i'll start -- i think i know where mr. wilburn is in reference to the reauthorization of xm. but i just was wondering,

captain moak, do you think that we should do away with xm, or should xm be reauthorized? i just want to know yes or no? what do you think about xm? >> first, i want to thank the congressman. i fly out of the kennedy, you do an incredible job out there. flying a boeing airplane, 667. great airplane, i want to thank you for what you've done and we have thousands of members up there. the xm bank needs to reformed because we have lost jobs at john f. kennedy airport because of actions of the xm bank. it needs to be reformed, period. >> i know we've got to figure this out, but xm was not there. one of the things that concerns me, i am the largest -- one of the largest supporters of trade. and the reason why i support trade, i want to export our

goods to other places. and then when i hear an example, for example, trying to level the playing field. there's an example i know took place in 2011, for example. where brazil had the largest land line telephone company and reportedly wanted with china's access on a 30 billion credit line. with an interest rate of two percentage points below the market. that's one example how china has used its banks to win new exports. this is our competition. and there are hundreds of other examples of which i could give from all over the world. and my concern is, and to all of you, wouldn't you agree that several industries that export jobs throughout would devastate america. and i wish i could just say i'm

focused on jfk. i've got to think bigger than jfk. i've got to think i'm a member of the united states congress that i represent my district, but first, the overall benefit. and sometimes, you got to figure out on a balance, wouldn't we be really jeopardizing export jobs without xm bank? >> sir, just to follow, you know, we're here because we need your help to level the playing field. right now, we're not able to compete, and we're losing jobs out of kennedy, so we need leadership to reform the bank. the bank hasn't followed the will of the congress. >> what i'm getting at is this, as i said, mr. anderson, you i go to you also. see, because what i have to weigh here, you know, is the overwhelming balance of companies that come to me because i'm a pro trader who say

this is absolutely important to them. if i would show you the number of companies that come to me and the jobs they represent that would be absolutely december stating to them, compared to one company who i like who have done, i'll have to say good, but then compared to one company, you know, then i've got a decision to make as a member of congress. especially me, because i've got to defend my own record of wanting to export things all over the world and making it easier so we can compete. and when i look at, for example, to know there's other ecas, upwards of 60 ecas, export credit agencies, that exist in other countries, many of whom don't comply with standards established. countries like china, brazil, india offer below-market concessionary alternatives. wouldn't you agree that's what

we have to look at so we can level those playing fields? if we don't level those, then we are putting at risk hundreds of thousands of american jobs because we cannot export to these other countries because there's no level playing field there. i see i'm out of time. >> time has expired. the chair recognizes the gentleman from new jersey, mr. garrett. >> and i thank the chairman. there's a number of areas that we can talk about here, i think the gentlelady to the right of me may go into this in more detail. but just as a beginning, i'll just do the highlight. and that is the fact although there's a statement saying that xm has never lost money, i think we have some documents to show that has not been the case over its somewhat sordid history of mismanagement, severe losses and past history of having to bail out and recapitalize in the past

i'll led the gentlelady address that issue later. secondly, to a technical point, as to accounting, gaap accounting under fasb rules, i think it's 157. we've been in here hearings before. fair value accounting, right? that's part of it, parse and parcel of your process, isn't it? >> that's correct. i think a lot of businesses in america would love to have the government's accounting system. >> exactly. >> the next point is on reform. maybe i'll throw it it back to mr. anderson and anybody else. the captain as well. maybe we can just reform this, but as some of you indicated before, we've been done this road before, we reformed it before. passed legislation just a few years ago. we instructed treasury to do something and we instructed xm to enter new agreements.

and we tried to have xm do cost benefit analysis. neither of those things were completed, correct? >> you were totally ignored. >> so the question i have before i think about re-re-reforming something, if we do that, you don't have to answer this, i'm wondering why i anticipate being here two or three years from now after this re-reform has been ignored again? >> that's why we thought this problem was fixed last time. and then we worked over the course of the last two years to try to get the reforms that both sides of the aisle enacted. lowell braynard told me they were not going to interact with the subsidies right across in the treasury department. >> in the meantime while we wait for reform to be implemented and find out it's not going to be implemented, how many jobs will we lose in the interim?

>> we're going to lose thousands. that's why our position has changed. last time, we thought we had it fixed. now our position is if there's not a stop on wide-body financing for state-owned. >> i appreciate that, mr. wilburn, what you're doing, i appreciate your service as well as your entrepreneurial spirit. i just have one bone to pick with you. i know you say you're a free market-type of guy. i think you said i pledged my collateral, you can only pledge that once. and i get that. but i guesses that the way the free markets work. if i have an idea or product or business and i have capital, i can only pledge it once. and i guess the industry in front of us, they can only pledge it -- that's the idea why you're a big guy or little guy. you only pledge it once. even though i've got lots of great business ideas doesn't seem like anybody would want to invest in them. just because you have a great

business idea and great business model doesn't mean that you can look to somebody else to finance it. you can try to seek somebody else to finance it. and that's what you're trying to do. and it's great that you're on tv maybe today so people will help you out there. but -- >> with all due respect -- >> well, my point is, we should not be asking the american public to step in and be the one to be the one to ultimately finance, once any business, big or small, pledges their collateral once. independent investors should be the one who are responsible for doing that. we should not ask the taxpayer to step in. and i'll close then with dr. de rugy -- sorry -- can you quantify, any of what we're talking about here? mr. anderson's tried to, as far as without a cross-benefit analysis being done like xm should have done, what we're really looking at when we

continue down this road or path of picking winners and losers in this current system that we have as far as job losses. do you want to talk on that? >> well, it's very hard to know exactly how many jobs are lost. one of the things which we know is who the beneficiary are. and we also know that the xm bank picked winners and losers. and that is very different from the free market. and also we have 200 years of economic literatures that explains that free market is the way to go. and protectionism is then because it hurts consumers by raising prices. and with the xm bank it is not free market -- >> the time of the gentleman has expired. >> the chair recognized -- >> mr. chairman, i would request unanimous consent for mr. wilburn to respond to the teaching that he just received from mr. garrett on oil and gas subsidies that he mentioned in response to mr. garrett's claim

that the government should not be subsidized. >> i'm sure there are many members on your side of the aisle that would be happy to yield more time to mr. wilburn. the chair now recognizes the gentleman from massachusetts. the ranking member of the housing insurance subcommittee for five minutes. >> i thank the panel for being here. mr. wilburn, i just want to thank you for your common sense approach. it amazing me that people can disagree on substance. you deserve more respect than you received here today. and i regret that approach. mr. anderson and captain moak, i think you raised very interesting points i actually worked on a similar issue just in massachusetts, using taxpayer dollars to help encourage wealthy foreign airlines. i'm more than happy to look at this. and mr. campbell and others have suggested that. however, i am not willing to shut down the bank. because very simply, miss de rugy, i've got to tell you, i

don't live in the ivory tower. in the ivory tower what you say makes sense. and if every country in the world would legitimately shut down their xm bank or a comparable one to it, i'd consider it. i don't disagree this should be unnecessary. but i don't live in the world. i live in the real world of get position. when france has 4600 people working for their xm bank and we have 400, if we're to compete, we need to do business. i'd like to yield my time to mr. hochberg who knows a lot more than i do. >> thank you congressman. first i want to thank mr. wilburn and captain moak for their service. it's deeply appreciated. mr. wilburn, i'm interested, as a small business person out there trying to build something for his family and his employees, kind of one day at a time. one contract at a time.

whether or not you would be surprised that the company to your right which has claimed such material damage, and is represented by its own spokespeople is now the most profitable airline in the united states. and arguably the world, indeed, made $2.7 billion in profits last year. which i'm grateful for. i think that's a good thing. i'm really glad. i'm not asking the question of you, mr. anderson. would it surprise you that the company has paid no federal income taxes for the last six years and is projected not for the next three years? >> are you talking -- >> mr. chairman, it's my time. not mr. anderson's? would it surprise you, mr. wilburn? >> i don't know if i'm surprised. i can't characterize it as surprise. it's new information to me. i was not aware of it. >> mr. wilburn, i'm wondering if

you would consider what the gentleman to your right has repeatedly said. again, i want to interject here. my gratitude for living in a bu airplanes in the world, flown by the most competent pilots. i did 150,000 miles last year, and i didn't lose one wink of sleep about my personal safety. and i thank you all for that quite genuinely. but mr. wilburn, the gentleman to your right said repeatedly in his opening testimony -- i want to make sure i get it exactly right. i don't believe in subsidies. mr. wilburn, would you consider a subsidy that the federal government through its pension benefit guarantee corporation took over the pension liabilities of delta and at the point of which the captain collects his will be provided by the taxpayers of the united states? would you consider that a subsidy? >> again, with all due respect, i don't think i'm really qualified to answer that, but i

think i understand your point. subsidies exist in a variety of different ways. i'm faced with that unlevel playing field every day. i'd have to have some more information on that, but you've piqued my interest. >> so lastly then, i'm wondering whether or not you would consider it at least inconsistent that the company has argued that the existence of the export-import bank to loan money to their competitors, would you consider it inconsistent that they have that view when, in fact, that same company bo r rrrowed from the kd wan import authority what i deem short-hop airplanes? >> again, i'm not familiar with those facts. i'm learning things -- a lot of things today in real time. as a small business guy, i'm more focused on my issues, but i can tell you this. there are a number of issues raised here today, including the ones you mentioned, that lead us to a broader discussion. the broader discussion is, what

role does the xm bank really play? and these gentlemen have opined and they've given their opinion. i can tell you just from my perspective without the export-import bank of the united states, people are going to buy in the philippines, not my goods, but they're going to buy korean goods. they're going to do that because it's financed by the korean export-import bank. so i think we need to get to their reasonable position and do some reforms and save the export-import bank of the united states. >> time of the gentleman is expired. the chair now recognizes the gentleman from texas, charmt of the housing and insurance subcommittee. >> thank you, mr. chairman. mr. anderson, i detected you might want to respond to some of the questions that were raised a while ago. would you like to -- >> well, i'd start by saying boeing got a refund, didn't pay any taxes. but delta accrues its taxes at the full federal tax rate. we don't have any offshore subsi

areas. the reason year not a cash taxpayer is because we went through a very painful bankruptcy and restructured our company without any subsidies from the government. we paid our premiums into the pension benefit guarantee corporation, and unfortunately for our pilot, we had to terminate their pension plan. so captain moek, i would correct the record, doesn't have a pension because his pension was terminated. and we were able, with the help of this committee, to pass the pension protection act in 2006 and save the pensions by getting an amendment to the law so that delta can pay out over $1 billion of pensions to our retirees today. and we're overfunding those pensions. so you hit a raw nerve when you looked back at these people who went through a really tough restructuring and were a full taxpayer in this country. and these people bore the brunt

of a tough bankruptcy, and a lot of them lost their pensions. >> i thank you. and i want to expand on something that's been brought up that i don't think people realize to the scope of that. that is i was shocked to learn that 14 of the largest 20 state-owned or state-supported airlines receive xm funding. so just to put that in perspective, so these countries that -- many of them who have fairly substantial sovereign wealth funds are able to get financing backed by the u.s. taxpayers to compete with u.s. companies. you mentioned, mr. anderson, i think a couple. i think india. emeritus, china. there's a long list of airlines that the american taxpayers are subsidizing to compete with your

airline. and that puts you at a disadvantage. >> that's exactly right. the prime examples would be singapore airlines, which is owned by the largest sovereign wealth fund in the world. our government finances the airplanes. the largest oil company -- oil-owning company in the world is abu dhabi. it has the largest oil reserves in the world and owns and operates a government airline. our treasury finances their airplanes well below market to fly into our markets. >> now, one of the things you mentioned in your testimony, too, is that you said that you did not support reauthorization of xm bank because you kind of felt like you got double crossed on the last reauthorization. but you would support possibly a reauthorization that had some reforms. do you want to elaborate a little bit on that? >> absolutely. our position has been consistent. it was consistent at the last

reauthorization. language was put in the bill to fix these issues that hurt american jobs, and it was ignored. so we've take an harder line position this time, along with all the employees i have here and the 3,000 employees we have in seattle, washington, to require that there be real reform this time. we aren't talking about small businesses. i respect small businesses. i want him to be successful. we want all small businesses to be successful. and this isn't about small business. this is about 90%, 95% of the money that this bank uses are for the top ten corporations. so let's not confuse the small business issue. this is about putting safeguards in place so that you, as members of congress, are not picking and choosing which companies win and which companies lose. i think these jobs are just as important as the manufacturing

jobs. if they aren't, i would invite any congressman here to just tell my employees that their jobs are not as important. >> i thank you. i had a question for mr. wilburn. has your firm ever received any federal grants, loans, guarantees? >> no, sir. >> okay. thank you. and doctor, you've done some analysis on xm and their financing and their structure. i see my time is out. i'll submit it to you in writing. >> time of the gentleman has expired. the chair now recognizes the gentleman from missouri, mr. clay. >> thank you, mr. chairman. dr. rugy, do you believe there's an appropriate role for

government to make sure financing is available for u.s. businesses in cases where the private sector is unable or unwilling to provide financing to legitimate business ventures? for example, what about commercial exports for nuclear power projects? i understand that these deals are often untenable for commercial banks. is it appropriate for the government to help finance such deals? >> i don't think the government should be in the capital market business because the way government allocates money is based on politics and not on sound economics. and more importantly, you have to understand that when the capital market does not allocate funds to someone because they're cash poor, it's a feature of the capital market, not a bug. and it's unfair for congress to demand that taxpayers be the one footing the bill because some people want to borrow money and

are not able to find lenders to actually lend them that money because they don't think it's a worthy or a safe bet enough. >> well, doctor, isn't it true that congress picks winners and losers every year as far as through our tax code? >> i agree. >> and so -- >> and i'm against that too. >> oh, you're against that too? >> i'm against the government picking winners and losers. i think the general rule should apply. >> and you've lobbied your members of congress on that, i assume. >> well, i don't lobby. i write research papers. >> at least you've talked to them. >> yeah, i mean, i'm not -- i specialize mostly on the budget, but when i've talked about tax reforms, i've talked about leveling the playing field. i don't believe in giving tax credit to some companies or to taxpayers based on the fact that they're buying a house rather than renting.

i believe in the general rule. i believe in a flat tax, for instance, rather than the system that we have today. yes, i am against the government picking winners and losers across the board, whether it's through taxes or whether it's through government funding, whether it's through long guarantee. >> thank you. mr. anderson, a review of u.s. airline purchases by u.s. carriers between 2012 and 2014 reveals that all of the recent capital market deals have been on more affordable terms and would have been available if the carriers had used the export credit that is made available to foreign purchasers of u.s. aircraft. given this, how do you defend the claim that the u.s. is providing below-market rates to our foreign competitors? >> this is a competitive business. and depending upon what your

interest rates are, your interest rates are determined by your capital structure. and when the government gets involved and takes that market component out, we're no longer competing on who's the best at managing capital. you've distorted the market. just because we have lower interest rates, that means because we pay our debts better. and we should have lower interest rates. and if a competitor gets lower rates for an artificial reason, they're getting a subsidy. they should be in the marketplace raising capital the way we raise capital and having to pay a market-based interest rate and compete on that basis. >> you don't think france or england uses their ability to level the playing field for their airline makers like air bus? >> no, because there's something called the gentleman's agreement

between air bus and boeing. it's an oral understanding that creates something called the home market rule. so the united states, britain, germany, france, and spain do not use and are not allowed to use export credit. >> okay. thank you. i want to yield the remainder of my time to my colleague from missouri, mr. cleburne. >> thank you. mr. anderson, some of your points i actually think are good. i think everything becomes partisan here. but let me ask you one question. you were talking about the employees behind you and what do you say to them. what would you say to the 16 exporters in kansas city, missouri, my congressional district which supports -- because xm bank supports about $84 million in exports each year. what do i say to them when i say that the xm bank is closed? >> i think we should put both our employees and your employees

and say we're going to preserve and grow both of their jobs, and that's the reform that needs to take place. >> time of the gentleman has expired. the chair now recognizes the gentleman from georgia, mr. wes mooreland. >> thank you, mr. chairman and mr. anderson. thank you again for being here and bringing the crowd with you. so i guess to put it in really simple terms, if a european government subsidized, or any government subsidized airline, buying a plane from boeing, you compete with them on some of the same routes. is that not true? >> you compete on virtually all the routes internationally. in some form or fashion over the hub system. >> and so if you're buying 60 planes from boeing, is that not correct? >> right now we have about 100

airplanes on order from boeing. >> 100 airplanes. and if you maybe had some of the same -- even though you said you're paying cash, if you had some of the financing options that some of your competitors had, you may even buy more planes from boeing and give boeing more work to do. is that true? >> well, the market needs to dictate how many airplanes we own. i am not in favor of opening up export financing for u.s. carriers because i don't think that's a free market. >> thank you. ms. rugy, could you please tell me why it's misleading for the export-import bank to claim that

90% of its loans actually go to small businesses? >> well, the number is correct only if you look at number of transactions. >> i'm sorry. i'm not sure your microphone is on. >> no, it's on. that number is only correct -- actually, it's not 90%. it's a little less than that. but when you look at the money, when you see is it's roughly 19% of the money goes to small businesses. that's less than even the bank's charter asks. by the way, they have a very expensive definition of small business. even the -- you know, when you talk about small business, people think about mom and pop stores or 10, 50 companies. the definition of xm for small can go to a company of at least 1,700 employees. these are big businesses, in my book. but what it means is, really, over 80% of the money goes to very big companies. and we know that they go to

leading manufacturers. the number one u.s. exporter, boeing, is obviously leading the pack. >> thank you. >> yes, congressman, i just wanted to add one other thing that might have gotten missed earlier. airplanes, if you want to have an apples-to-apples, airline manufacture -- we're actually getting impacted twice. not only by what the u.s. xm bank does by financing airlines at below-market rates, but what happens, since we don't have the ability to access that along with a few other countries that manufacture airplanes, countries like the middle eastern countries not only are they using xm bank financing and putting them on routes and costing us jobs, they're also using european credit agency airbus airplanes, overlaying our routes at a number like $3

million per year per airplane. so you start out the beginning of the year $3 million behind. it's hard to catch up. we have to pull out of markets, and we lose jobs. so we're getting hit not just by xm bank practices but also by eca practices, and that's why we came before this group, to ask them to negotiate taking that down. because the middle eastern countries are taking advantage of it. >> and so mr. moak, would it be true when the other side of the aisle says that labor is for the reauthorization of the xm bank, that would not be entirely true? >> labors for reform, fair practices, competing in the world. we have the best workers in the world. we need to be given the opportunity to compete. because when we have a fair opportunity to compete, we win. and we're coming to this place because government policy matters. we need your help or we wouldn't be here. >> and mr. anderson, just one

last thing. you had made an attempt at the last reauthorization to do the right thing. you're back here today because it didn't work, and they did not do the things that were promised. is that not true? >> correct. >> time of the gentleman is expired. chair now recognizes gentlelady from new york, ms. mccarthy, for five minutes. >> thank you, mr. chairman. i appreciate the opportunity. number one, i think it should be noted that we're not against any of the unions. we're not against any of our american airlines. we certainly support them. and i think that what i would like to ask mr. anderson on one quick question, are there any other american airlines that are experiencing the same problems you are? >> yes. >> captain? >> i represent 51,000 pilots, 31

different properties, all the major u.s. airlines, and the answer to that is absolutely yes. we're getting hit by this. we need reform. >> all right. so let me go baa to mr. anderson. we did negotiate two years ago, which we thought was a fair agreement. so here we are at this point. what do you think would be a fair agreement? where would you want to change the language? is it only enforcing xm bank? is it something different? >> it needs to be mandatory. the language that was precatory last time needs to be made mandatory. and it's specific in our business. look, we've tried to be narrow because there's plenty of merit to what happens with small business. there's no question. and we've tried to be targeted to try to just go at the very issues that hurt our employment. and the issue that hurts is that

our government further subsidizing deeply subsidized foreign airlines. >> let me say something. number one, i doubt very much whether you'd ever get language that would mandatory. it's just not going to happen. people here, many included, don't like to use the word mandatory. so if we don't get the language in as mandatory and you're basically saying that we should, you know, abolish the bank, then, to be very honest with you, your union, all the other unions are going to have a problem. a lot of my constituents will have a problem. so we have to come up with some sort of solution with that. but with that being said, too, you know, i know that you are probably the most profitable airline. that's great. we want to see that. and i know you had your ups and downs, especially when you had to go through the bankruptcy. but wasn't going through the bankruptcy more because of what was going on in the world that

day -- that year, as far as oil prices and everything else like that? and you had to reconstruct. >> well, the terrible tragedy of 9/11 -- and i sat in one of these rooms on september 15th, 2001, representing the industry. so we lived through that. and it dealt a devastating blow to our industry. you know, our capacity fell off 25%. it's taken ten years to get back. so i would have to say that between very high oil prices -- and we could have another discussion on the depletion allowance -- very high oil prices and the 9/11 tragedy and then the aftermath of that really wreaked ha eed havoc on industry. >> i'm only trying to bring out whether corporations or small businesses, we really want to support them, because that is jobs. but sometimes we, even in the government, can't do everything. and we can't.

i want to also say that someone that's been always supporting my unions, i'd like to insert the record, mr. chairman, from four other labor unions. >> without objection. >> thank you. so i think one of the things that fascinates me about this, as we did two years ago, was trying to find that common ground. you know, which is really difficult around here. it seems all or nothing the last several years. so i hope we can come to an understanding because i do believe in the export bank. i do believe it helps an awful lot of our people in this country. i do believe it brings good jobs and keeps good jobs here in this country. but with that being said, i want to turn over the rest of my time to my colleague. you wanted extra time? >> are you pointing at me? >> yes, i am. >> yeah, sure. thank you very much.

mr. chair, i'd seek unanimous consent to enter into the record verified excerpts of a speech given by former vice president richard cheney. >> without objection. >> and with your permission would like to just quote him briefly. there are those who say the bank is just some form of so-called corporate welfare. they obviously don't know that for every dollar appropriated in the last five years, xm has returned approximately $20 worth of export. that's the kind of successful government program that even a fiscal conservative such as me can embrace. thank you, mr. chair. >> time of the gentlelady has expired. chair now recognizes the gentleman from new york, mr. king. >> thank you, mr. chairman. thank you for holding today's hearing. it's a vital issue. i want to thank all the witnesses. i want to thank mr. anderson. certainly delta is a good employer in my district. in fact, i just got my flight confirmed for tomorrow on delta. so i want to thank you for that. dr. rugy, besides your testimony today, i want to thank you for the work you've done on homeland

security over the years. i've sometimes plagiarized some of your words without giving you credit. let me do that now. thank you. also, captain moak, i've had a good relationship with the airline pilots. mr. wilburn, you do, i believe, represent an american success story. so with all of that, i think i'm trying to find a way if we can be on the same page. i was impressed by what mr. campbell said about trying to find reforms. mr. anderson, you believe reform is necessary. i believe we have to find a way to reauthorize the export-import bank. i know we hear of crony capitalism. that may happen in some cases. certainly the businesses in my district are small businesses. we have a musical instrument string manufacturer, a woodworking tool manufacturer, a seafood distributor. i believe there's ten companies in my district. i know mr. mccarthy mentioned a number in her district, which is next to mine. in downstate, new york, districts are one on top of the

other. so probably within adjacent four or five districts, there are hundreds of employees from each of our districts that works in businesses in adjacent districts. so it is important. i also voted every free trade agreement that's come before congress since i've been here in 22 years. i believe in free trade. i also don't like the idea of unnecessary government intervention. but i also know that countries such as germany, france, china, brazil, india, and korea provide up to seven times the support that export-import does. and to me, that is not a level playing field. and what we have to do, i believe, is find a way to level the playing field. if we just end our export-import bank, i believe we are definitely giving advantage to our foreign competitors. and, you know, i think of former cbo director who s if i can use the partisan term, a republican economist. he's said the reality is he

would like to live in a world and i would love to live in a world that does not have a need for an export-import bank. one where international transactionings were done on a level playing field. that's just not the reality. many other countries, notably china, have an export credit agency. they're all out there trying to gain market shares. the west simply has to not disarm. end of quote. then jim russell, a former republican congressman, i served with him on this committee. he ended up being the director of omb. he said, export-import is self-funding and has generated income for the treasury since 1992. now, i bring these arguments out not to just, you know, make the appeal to authority, which they taught us in law school is one of the easiest things you can do. find somebody who agrees with you who supposedly is on the other side and sounds good. but i just feel what mr. campbell said is important. i don't see how we can just end our involvement with export-import now. i don't know if we should end

it. obviously reforms are necessary. we've seen the stories of corruption that's there. obviously, that has to be changed. but on the other hand, i think the blow to our economy by suddenly ending export-import, putting small businesses and larger businesses at risk is -- especially at this time. at this time when we're still have not fully recovered from the crash of 2008, at a time when there is, you know, the increased burdens of obamacare, of the epa, of regulations, of burdens. it's just not appropriate and it's not the responsible thing to do to end the authorization of export-import. at the same time, i believe reforms are necessary. if a way can be found before the expiration dates bring that about, i would springily support that, work with that. i think it's essential we do it. i think the chairman has raised important issues. i think we go too far if we just say we're going to end it. as we saw today, there's always some government involved in the company.

bankruptcy is a government involvement. i support that fully. but that is the government getting involved in the economy to help businesses get back together. so we use that. protections given to labor unions that are in our economy. we have veterans. we have senior citizens. everyone has some government involvement. my goal is to keep that to a minimum. but i think we'd be going too far if we did not reauthorize export-import. but we should do, i believe, with reforms. i certainly look forward to looking at the working paper of the gentleman from california, mr. campbell. mr. anderson, if nothing else, you've certainly forced congress to pay more attention to you now maybe than was done two years ago. >> chair now recognizes the gentleman from massachusetts, mr. lynch. >> thank you, mr. chairman. i want to thank the witnesses for their willingness to come before the committee and help us with our work. i've been involved on the oversight committee and this committee on dealing with some

of our trade agreements just trying to rebalance our export-import balance with a number of countries. spent a little time in china recently, south korea, india, france, germany. i noticed in my trip to south korea in connection with the south korean trade agreement, travel there for a few days. i couldn't help but notice that this is just anecdotal, but we're there for several days, and the only u.s. cars -- now, south korea is a booming economy, very modern, big highways. the only u.s. cars i saw there in the days that i was there was the one i was riding in and the one that had my security detail from the embassy. so no u.s. cars. okay. in japan, same thing.

you need a detective to find an american car in japan. so those countries obviously have closed markets in order to boost their domestic car production. i walk outside this door here, i can't spit without hitting a japanese or a korean car. so they are doing massive investments and highly protective structures to protect their domestic markets so that they can export goods. as mr. king pointed out just recently, they are pumping in about seven times this morning in terms of what we're doing with credit assistance through their versions of their xm banks. in addition, in my state in massachusetts, the french government just came in and took

over one of our rail systems, the commuter rail system. they backed one of their companies. france's idea is they want to become the world's rail company. they want to manufacture the rails. they want to go out into other countries and dominate those markets. kind of like what boeing is trying to do in the aircraft industry on behalf of american machinists and american workers. spain gobbling up a lot of the construction firms. it's become a globalized strategy. and they are there to push their workers, and i understand the theoretical arguments i'm hearing today about it would be nice, we want a level playing field. well, the playing field is going to become much less level if we exit the battlefield, which is

what you're suggesting that we do right now. i wish, i wish that our exit from the xm bank -- and let's not mistake anything. we're not talking about reforming the xm bank here. it's going away. so it's going to increase the imbalance here, but it'll tip it in favor, drastically in favor, of foreign competition. we're opening up our markets. we are walking off the battlefield. we will no longer try to protect our workers in this iteration the way we have been doing. and it hasn't been smooth. it hasn't been fair to smaller businesses. i'll agree to that. but we are protecting a whole boat load of workers right here. but the reality i'm dealing with is if you succeed, if the xm bank goes away, and it looks likely that will happen, the result will -- because no other nation is going to disarm.

we're going to be at a huge disadvantage. and foreign manufacturers will be handed a huge advantage. and i think it will be a very good day for airbus. you'll see their stock go right up. it'll be a great day for them. but at the end of the day, when the xm bank goes away, government will still be picking winners and losers. it just won't be the u.s. government. and the governments that are picking the winners and losers will be the foreign governments. and those winners, you got to be kidding me. if you don't believe those foreign governments are going to pick their own companies, their own workers. you see what china's doing. you see what japan's doing. you see what south korea and india and all these other countries. it's a nice theoretical argument you have here, but when this goes away, it'll be a bad day for america. bad day for the american worker. >> time of the gentleman has

expired. dr. de rugy, i think i have been informed that you have asked to be excused from the panel at this time. you have a prior commitment. is this correct? >> yes, i have a plane. >> in that case, members who -- i won't ask which plane, and i won't even ask which airline. but members will have five legislative days to submit questions to dr. de rugy. we would ask you respond as quickly as possible. >> can i add just one thing? >> not substantively. processwise, yes. substantively, no. in which case we will excuse you at this time. the chair now recognizes the gentlelady from minnesota, ms. bachmann, for five minutes. >> thank you, chair. if ms. de rugy would make to make her comment, i would be more than happy to let her.

>> thank you. based on the discussion, i think it is important to remember that the bank itself only justified 30% of its activity based on the need to contra vail foreign subsidies. so the idea that everything that the bank does is to compete with foreign government is not accurate based on the bank's data itself. and finally, i mean, i will say that we're talking a lot about jobs. we're talking a lot about businesses, but we're forgetting consumers. i mean, it hurts consumers in the form of higher prices. economists care about producers and consumers too. i think we have many years of economic studies that show that basically protectionism tends to benefit -- even for the beneficiary of the protectionism does not outweigh the cost to all the unseen victims. >> thank you so much. that goes to my point. a lot of what i've heard here today is that we need to

continue to provide subsidies and stay on the subsidy train because the rest of the world is on the subsidy train. and to continue that logic means that nations of the world have to continue one upsmanship on subsidy. so it's subsidy versus subsidy and it's a complete rejection of the free market. i don't think that's the direction we want to go. the free market has built up the most magnificent economies of this world. i remain a defender of the free economy. one of our former presidents said that nothing is more representative of eternal life than a government program. and i think we heard the defenders today here of this program, despite the mismanagement, despite the fraud, despite the failures. we have an executive summary in front of me that says, as a matter of fact, the export-import bank operated a loss every year from 1982 to

1995. when reform was passed back in -- when reform was passed, the fcra, that meant then that the losses were back filled by the taxpayer and xm bank received $9.92 billion in direct appropriations from the government between '92 and '96. when we talk about free economies, the united states used to be considered under the category of a free economy. we're not the freest economy in the world. we're not the fifth freest economy in the world. we're not even the tenth freest economy in the world. we have actually fallen out of the status called free economy. we've now dropped out of the top ten. we're considered a mostly free economy. and while the fault isn't at the foot of the xm bank, it is death by a thousand cuts. this is just one example. and i think that congress needs to look at itself in the mirror

and see what we have done to contribute to a less free economy. and i think there are four areas. one is we have the highest -- look at the tax code in the united states. we have the highest corporate tax rate in the world, bar none. 35%. then you add on to that the obama new tax rate, the 3.8%, various state corporate tax rates, and you see how uncompetitive the united states is. we need massive tax reform. then you look at the next factor. regulatory burden. dodd-frank was brought up today. obamacare was brought up today. the new epa rules are new regulations. we have heaped upon american businesses the uncompetitive factor of a tax rate, you might say, through increased regulatory burden. that's number two. number three is the united states government, which has exceeded growth upon the taxpayers' ability to pay for government services.

we are growing the cost of government. and number four, the lack of sound money. we have seen through what the federal reserve has been doing the increased inefficiency with sound money. those four reasons alone aren't your fault. those are the fault of the united states congress and this government. we are the ones who need to look in the mirror at how we have made this a less free economy. regarding the export-import bank and the four firings that just occurred, that also doesn't include the 74 cases since april of 2009 when bank officials were forced to act on the basis of integrity investigations by the office of inspector general. there are dozens of other fraud cases involved in the xm beneficiaries that have now been referred to the department of justice for prosecution. i see that my time has gone, but i will enter into the record several recent stories about the fraud that's going on at this bank.

>> without objection. >> i want to stand on record. i opposed continuation of this bank because reform hasn't worked. we've been ignored. >> time of the gentlelady has expired. the chair now recognizes the gentleman from georgia, mr. scott. >> thank you very much, mr. chairman. this has indeed been a very, very interesting hearing. a very important one. let me say at the outset that atlanta is the world's busiest airport. i always like to tell people that whenever you land at the airport in atlanta, you land in congressman david scott's district. so i say welcome to that. certainly welcome to you, mr. anderson. now, i've listened to this discussion with a very john tised air, and i don't see where the success and the movement forward of the xm bank is not

mutually -- is mutually exclusive to addressing the concerns of our airlines. i would like to see the committee, mr. chairman, give some very thoughtful -- we have a very talented, we have a very skillful committee. and it seems to me that we ought to be able to address these concerns narrowly focused on what mr. anderson and captain moak are saying without into fearing with the forward progress and the very basic need that the bank has provided for small businesses that mr. wilburn has done. there may be some on this committee that want to do away with the xm bank altogether. i'm not one of those because it has been very beneficial. but i think we would be very derelict in our duty as a legislative body to ignore the very pointed concerns that have

been raised by mr. anderson and mr. moak. i think we can have some folks from both sides go to work to try to put some language into this xm extension that will address those concerns. so with that, captain moak and mr. anderson, let's narrow in specifically. i think what concerns you most is the competition with the wide body or the boeing 777. what can we do to put in some language that could address that? it could be a trigger mechanism. it could be an assessment, as ms. mccarthy said. mandating things are rather difficult. what could we do to address those concerns and move this forward? >> congressman scott, i want to first thank you. i don't know if you remember, but you stood by my side in front of 1,000 delta pilots on

keep delta my delta, and your speech is still viewed in that light with when you stood up and said this is truly a david and goliath. when david was walking back and said, is there a cost, there is a cause. he turned around and went back. the cause here is xm bank reform. and i commit all our resources, everything to work on that narrow part of the reform that we need so that we meet a fellow veteran's needs, small business needs, but we meet our needs so we stop losing jobs. i'd be happy to help. our team will help. anything we can do. and thank you again for that day. you know where we've come from there. >> oh, absolutely. i certainly understand. mr. anderson, what would be the narrow scope of language that we could add that could address your problem as we move the xm

bank forward? >> the bank would not finance below market wide-body airplanes for state-owned, state-subsidized airlines that are otherwise credit worthy. there won't be a need. and that would solve the competitive issue. because what we're dealing with is a much broader competitive issue. i think both sides of the aisle have addressed this. we don't compete in my business against other companies. in our business, we compete against government. so my big competitors, our big competitors interfacially are governments that happen to have a department that's an airline. and they get huge, huge subsi dies. and it really hurts us when our government gives them a subsidy on top of the huge subsidy they already collect. >> my time is running out. mr. chairman, i think it might be wise if we could make a point of order that as we move forward

with this that we could develop some language. i would be delighted to work with your side on that, that i think could accomplish that as we move this bill forward. >> time of the gentleman is expired. the chair now recognizes the gentleman from new mexico, mr. pierce. >> thank you, mr. chairman. appreciate each one of you making the appearance here today. mr. wilburn, you had mentioned barriers to entry and subsidies to oil and gas being one of the problems you have as a business unit. could you tell me a little more about those obstacles? >> i'm sorry, congressman. could you repeat your question? i didn't quite catch it. >> yeah, i was asking if you could go a little bit deeper into the obstacles that you face as a small business.

you had mentioned the barriers to entry and the subsidies to oil and gas. i think you specified the depletion allowance. how is it that those keep you out of the domestic market or make it less available to you? >> make it less available to me because i'm basically competing with the price of natural gas. trust me, i'm an advocate of strong natural gas resources here. but i go to landfills and pollution sources, and i take that organic material and make methane. and that methane has a cost. but it also has some benefits to it. doesn't go to a landfill, okay. oil and gas has a subsidy, if you want to call it that, that allows them an advantage over my product. i don't have access to that. so i have to go to markets where i have a chance to compete. and those markets are where

there's not the natural gas reserves and they don't receive those subsidies. that's the barrier entry i was speaking of. >> the oil and gas company has to pay for that. in other words, they don't just get the oil and gas for free. they have to pay for it. so basically, all that is, is a depreciation of what they've paid. now -- >> the same benefit. >> well, when you go to a landfill, do you have to pay to get the right to harvest that gas? >> absolutely. >> and so you don't get a write-off for creating that gas? you don't get a write-off? >> no. >> that is probably something that we should consider. but in contrast, it's not the major producers that would provide a barrier to entry don't get the depletion allowance. it's just the independents, the small producers. that's about 12% of the market. mr. chairman, we've talked today

about the catastrophic effects that we're going to have on the job market if we don't take action one way or another, and there's been all sorts of suggestions here. but i don't think what we do here is going to affect jobs nearly as much as other things. the gentlelady from minnesota had gotten this covered pretty well. the corporate tax rate, the president has said, is probably one of the biggest impediments to business in america. i sent him a letter personally saying i'll work with you on that, sir, across party lines, because i agree one of the greatest impediments to manufacturing in this country is the corporate tax. i have yet to hear from the president. that's been four years ago. but the regulations are where we really are killing the job market. for instance, the timber industry, 85% of timber jobs are now gone from america. 123 mills in new mexico closed

because of a government regulation. one government regulation that said the spotted owl is going extinct because of logging. and the government came back this last year and said, oops, logging wasn't the problem. so we have not only a government that intervenes, but we have a stupid government that intervenes. 23,000 agriculture jobs in the san joaquin valley went begging because of a two-inch delta smelt. another regulation. now we're importing 80% of our vegetables that spray things we could not spray before. that has hurt the job market in america more than what we do in the xm bank. we, in 2007, passed a bill through this congress that outlawed incandescent lightbulbs. that killed that industry. that last manufacturing facility closed down, and china is able to produce the small curly bulbs that require more labor because of actions by this. and that was not an xm problem. we have continually put the

consumers at risk by driving the price of electricity up. and the president has said, yes, electricity is going to be higher because of our regulations. we're a 70% retail economy, yet i hear no one in this committee who's defending the job creation of the xm bank addressing that. we're killing the consumer market by higher electricity. it's the government. it's the government that's at fault. the government is not the solution. i yield back. >> time of the gentleman has expired. the chair now recognizes the gentleman from texas, mr. green, ranking member of our oversight investigation subcommittee. >> thank you, mr. chairman. i thank the witnesses for appearing. i especially thank our two veterans who are part of this panel. and mr. wilburn, i thank you because you indicated that you may have -- or may be impacted by ptsd, and that says to me

you've had some experiences that were less than pleasant. and my prayers are with you. i'm reminded of chairman barney frank, who on the topic of reality versus desires would often say he wished that he could eat more and lose weight. i wish that i had options other than ended or extended. i would dearly like to have options other than ended or extended. but these are the options that we seem to be confronting. and i'm a person who believes in compromise, and i'm willing to work across lines to do something other than end or

extend. but given that these are the options, let me just share some of the comments associated with the options that are before us. "houston chronicle" published on june 25th, 2014, which would be today. editorial, no time for games. export-import bank loans support american jobs, including houston-area jobs. apparently mr. hockburg was interviewed by "the chronicle." they go on to indicate, large or small, export-import loans support american jobs, including jobs in the houston area. bank officials told "the chronicle" that its financing has supported 11 billion in export sales from the area since 2009 with 3.5 billion of that

attributable to small businesses. the bank also costs taxpayers nothing. it supports itself through the fees and interest it charges and regularly sends money to the u.s. treasury to reduce the debt. this is from "the houston chronicle." i concur with the ranking member with reference to there being persons of note who were not here to testify today. and if they were here to testify, i believe they would say, some of them, what the greater houston partnership says. the greater houston partnership indicates -- and this is an excerpt -- small and medium-sized businesses in our region also benefit directly from export-import. small businesses account for nearly 85% of xm bank's

transactions. further, these transactions' figures do not include the tens of thousands of small and medium-sized businesses that support goods and services to large exporters using the bank. we trust -- this is addressed to me. we trust you will carefully consider the impact xm bank has on our region and our position as a global economic leader. now, this letter, while sent from the greater houston partnership, appears to be supported by the bay area houston economic partnership, the bay town chamber of commerce, the brenam washington county chamber of commerce, the clear lake chamber of commerce, the greater houston partnership, the houston each inn chamber of commerce, the houston northwest chamber of commerce, the lake

houston area chamber of commerce, the league city chamber of commerce, the paraland chamber of commerce, the west chambers county chamber of commerce, and the warden chamber of commerce. finally, there are some small businesses in the houston area, if they were given the opportunity to testify, would indicate that they're supportive of the xm bank as well. this would include the south coast products business. also includes the hallmark sales corporation in houston. this is not the card company. also include the everest valve company in houston. and others. thank you, mr. chairman. i will yield back. >> time of the gentleman has expired. the chair now recognizes the gentleman from missouri, mr. liukin mire. >> thank you, mr. chairman. and thank the witnesses for being here today. i certainly appreciate your

testimony. mr. anderson and captain moak, thank you for your comments and concerns. i appreciate the fact that you have brought some issues to light with regards to the aircraft manufacturing sales portion, our financing portion of the bank. i think those need to be addressed. but i congratulate mr. wilburn, also, on being here. and thank you for your testimony from the standpoint we have several different things to look at and discuss here today. that's the small business portion of this as well. in 2013 aircraft manufacturing made up only 40% of xm's financing. 40% went to other manufacturing. 20% went to oil, gas, telecommunications services, and mining. so it does have a lot of other financing interest it takes care of and works with. i think the statement has been made many times this afternoon and morning about 3400 of the 3800 loans it made were to small businesses.

so i think that at the end of the day, it's something we need to consider how we can find a way to reform it, make it work for everybody. you know, i get this crony capitalism comment, and it kind of sticks a little bit from the standpoint that, you know, crony capitalism is truly when you hand out favors for somebody else as a favor for them having done something for you. and yet, the federal government helps with sba loans. is that crony capitalism? helps with va loans, helps veterans own a home. is that crony capitalism? we have in our treaties and export and trade tariffs and all sorts of treaty protections with regards to everything from automobile manufacturing to agricultural products to intellectual property to be able to protect and incentivize businesses here in this country, to be able to compete internationally and protect their products so they can compete and provide jobs here.

you know, dr. de rugy made the comment she'd like to see it all go away. that'd be great if we lived in a perfect world. that would be fine. you know, but if that would happen and none of the rest of the world disarmed as the comment has been made before a couple times, what would happen? let's stop and think about that for a second. what would happen if we went and did away with all our tariffs, all intellectual property protections and the rest of the world could really come in and rape and pillage our stris throughout this country? they would have no ability to protect them. they can compete, subsidize, and talk all our jobs away. yeah, we'd lower the price of products at the supermarket and other hardware stores and whatever, but our jobs would certainly be gone, wouldn't they? and we'd suffer. quality of life would go down. and some things would be a national security problem for us because we lose the ability to be able to build things, provide services for things that are of national importance.

in my district alone, we had the last lead smelter in this country, and it went out of business because of epa beginning in january. now you know what we do with the lead mined in my district? we send it to china. now you know what we want to do when we want to build a bullet? we have to go to china and buy our lead back. that's what would happen if you continue down this path of kind of forgetting about how to protect our industries, protect our ability of our industries to compete. is it a perfect world? no. it's not. it's not what i would like to have either. but at the end of the day, i think that we have to find a way to come together to realize that there has to be a way to find a middle ground on this, to reform this bank. i'm a banker. i could tell you there's a half a dozen things i'd love to see changed about this thing, and i'm working with congressman campbell. i'm trying to do that because i believe this can be done. i believe that there's enough good about this thing, this entity, that we can use it for the good of our people, our country, and our industries.

does it need to be reformed? absolutely. there's a few things in there that drive me up the wall. and i'm glad that mr. anderson, mr. moak, you brought those to light today. but mr. wilburn, you also make a great point from the a great po standpoint of importance of how this bank can help small business compete, can grow, market a product that may not be able to market in the country but can be around the world. by enabling our entrepreneurs to build that product, market it and bring revenue to our country instead of sending it out. yield back the balance of my team. >> recognize gentlelady from wisconsin. i'm sorry, if the gentlelady will consent, recognize --

>> without objection, now the againel lady. >> thank you very much for having this hearing. i think it's extremely important to everyone. i do want to raise a bit of caution to captain and mr. anderson here. i've heard you say continuously you want the bank to be reformed and not dismantle it. i've clearly heard that. i want you to be clear that this hearing is about whether or not we are going to reauthorize this bank and the authorization is going to expire in 90 days or so. there are not many days left in this session. our chairman has been very articulate in indicating that he does not believe in this kind of government activity. we had a very passionate

witness, the doctor. i'm sorry she had to leave before i had a chance to ask her some questions. very passionate, giving her economic view this was bad. i want you to be clear you are sitting on the side of people who did not want this to be extended. i also want to associate myself with many of the excellent questions and comments that have been made by my colleagues on both sides of the aisle and just really want to remind people that we're not talking about just boeing or the airline industry here, i represent an area that is home to six fortune 1,000 companies. manufacturers like johnson control, rockwell, harley davidson. we're second in the country in manufacturing and we're dominated by small to medium-sized metal fabricators that export all over the world and really need the xm bank.

we're not just talking about one group of employees. i'm very, very sympathetic and empathetic to them, but there are, you know, hundreds of thousands of other employees that rely on these activities. indeed, delta got $45.5 million subsidies from the export, import bank for engine, maintenance services. 400 jobs that rely on the export/import bank in order to do maintenance for brazil. i see you shaking your head over there. maybe i'll give you a chance to answer. >> i have a chart up here, because there are a couple of things that i really want to point out. we've heard a lot of testimony about how the export/import bank

bank creates competition and green line below shows last nine airlines built by boeing. that is the interest rate and the price that they paid as compared to the commercial bank financing rate in the red and the blue line there is the oecd agreement, the gentleman's agreement we've heard about, with regard to text a export it provide. delta is buying planes at that green level. we're not squeezing out the private sector. one of the things i continue to hear over and over again is about the cliff mine in michigan, how the export-import bank was creating an uncompetitive situation. i'm disturbed because caterpillar is red quarterheadq

the southwest, huge operation right across the street from my district. many of my constituents work at caterpillar. the iron ore that was coming out of the mine in australia and the ones coming out in michigan were two different iron ores, two different applications. apples and oranges are both fruit but they are not the same. so that was not true. i don't have much time, so i will yield the rest of my time. >> i just like to make the point that the threat to american manufacturing base is existential. it's very real. as we sit here chinese considerable state investment are developing an airplane to complete with both airbus and boeing, c-919. they have an export credit authority larger than ours,

larger percentage of gdp than hours. be assured when they successfully complete their airplane they will compete on the open market. >> time expired. the chair recognizes the gentleman from tennessee. >> thank you. i'm going to give mr. anderson a chance to briefly respond. also have the question you received financing from canadian import-export. >> i'm glad you asked the question about airways. first of all, a huge manufacturing company. we have 7,000 manufacturing jobs and we're one of the largest engine overhaul companies in the united states. we run the largest shop in the united states. it's a terrible example from the bank. it's something they tried to say an opponent of delta. in 2010 we won a worldwide

competition to overhaul engines at the airway in brazil. we won against lufthansa and ge. two years ago the bank went to brazil and gave them a loan at 6.22%. i know this because we own part of that airline. then released a press release saying it added 40 jobs to delta. that's false. >> someone who lives 60 miles north of memphis, i love delta air lines. the pilots, airline, flight attendants do a great job, so please don't hold anything i say against me today as we fly in the future. i was born at night but not last night. i didn't support reauthorization

of xm bank because i felt that the reforms that needed to be made were not made. today listening to the testimony of all three of you and the doctor is gone, reforming xm bank with reforms, i think you all would support reauthorization, correct? >> with reforms. >> with reforms. as we have been talking and i have a whole package of reforms here we've been working on the last six weeks, two months. 1,000 jobs in the eighth congressional district are supported by xm bank. i've heard people talk about 10 big companies, or whatever. this is not about leadership in our party. i think as republicans we are all trying to get to the same

place of having a government that's more accountable and more transparent and more responsible with taxpayer dollars. this is about, for me, the jobs in my district. it's going to be hard for me to go back home, mr. anderson, and captain and mr. wilburn. my constituents say, congressman, have you balanced the budget? i'm going to say, well, we're working on it. they are going to say, congressman, did you get rid of fannie and freddie? i'm going to say, we're working on it. we are. well, congressman, the only thing that you've done is you've gotten rid of an investment that was creating 1,000 jobs in our district. now i'm on unemployment. i don't have a job. i have a paper right here. u.s. economy shrank at 2.9% in quarter one. commerce department said first

quarter was more severe than 1% annual design it estimated a month ago. another major factor was a bigger trade deficit than initially estimated. again, if we don't reform xm bank, we've got problems. a lot has been said about the way xm bank is being operated. if they won't respond to the changes that we're trying to make, maybe xm bank needs to be -- maybe we need to clean house there. but please, lets don't overreact. lets try to fix this investment. lets make it better. lets get back to the original mission of xm bank. don't hurt jobs in our districts. i'm going to have a hard time, i'm just going to tell you, going back home to my district and telling my people, my folks, that the only thing i'vee