last thing is not surprisingly about a month or so before the tender was determined china made a $5 billion loan to the rail authority for upgrading tracks, signaling and so forth. what happens that's a coincidence, perhaps not. >> i think you can see why this would be -- we understand the business you're in and i was going to allude to you after 2012 needing to try to get other countries to lower this amount of activity. you alluded to that in your opening comment. but you can tell -- i mean, this is an unseemly business to those of us sitting here where basically we've created had this entity to create financing to complete with other countries that are based -- basically racing to the bottom. the other, i guess part of your quote, agenda is to make sure that smaller enterprises have access to credit and yet we've looked at your application form and there's really no -- nothing

there that requires them to make sure that -- or requires you to make sure that you are the lender of last resort. i mean, you can check other on the application form and sign it. i had an amendment a couple years ago to make sure that xm was actually the lender of last resort. i know you didn't support that. i know steven fincher over in the house is leading an effort to reform xm. do you support those types of things, for us to know that you, in fact, are the lender of last resort and just don't allow borrowers just to easily check another box? >> well there are actually four questions they have to answer with seven subparts. >> but would you be supportive of that being much stronger so we know in fact you are the lender of last resort? >> it should be stronger but let's be clear, you're signing this application you're committing perjury fines an imprisonment if you falsify. >> not if you check other. so will you support much stronger legislation to

absolutely ensure that you are the lender of last resort in those cases? >> well, senator i guess i believe that -- i believe in the certifications and we verify those when warranted. >> i think the answer is no. let me just -- i think we're going to be pressing for that and i'd love to talk to your office about it. i will just close with this, i was in eastern europe -- i was in eastern europe recently dealing with a number of different issues and i have to tell you was peril offended to realize that the xm bank basically had taken on some of the administration's policies without congress being involved in any way. as i understood xm was no longer financing coal exports. that somehow or another you without a congressional mandate had decided that if a company wanted to export to eastern

europe, which is a great market for our coal suppliers, you had decided, the xm bank had had decided because the administration had had laid out this policy that you would no longer do that. i find that to be offensive, not that i'm a lover of coal or not a lover of coal, but that you would be able to do that and i wonder if you could respond to why kpflt m would take on administration policies when congress has not legislated that >> well congress actually put in our charter 23 years ago that we must take the environment into account before making any loan agreement and during the bush administration the bank was sued and in a settlement way before i got to the bank had to do a consent decree about how we actually had a more rigorous environmental policy so that goes back to 2006 '7 and '8 before i got to the bank. over the 23 years we have had to adjust our environmental policy to meet the needs of science and industry over and over again. so this is not a recent --

something that was just inserted recently. >> but if we were to change that you would be perfectly fine with that? >> let me say this i mean -- well we have an environmental standard, that's up to congress to determine it and we try and comply with other -- the world bank, other -- other export credit agencies around the world. but i want to be clear, we actually do support the administration's climate action plan to restrict coal fired power plants except to the poorest countries which total 80 can you please trees which have no restrictions in the wealthier countries we do support that provision. >> mr. chairman, thank you. i didn't know we were carrying out environmental policy through xm bank. >> i didn't, either. we found out something today didn't we? thank you, senator. senator menendez. >> thank you, mr. chairman. before i move on to my questions i'd like to enter into the record a list of 244 new jersey

companies over 70% which are small businesses that have received xm financing since 2007. okay. i fully support a timely reauthorization of the bank and i hear regularly from our con stit wednesday of the irreplaceable role that the bank plays in making new jersey exports competitive on the international market. many of these companies have come to washington to explain how kpchl m has supported their efforts around the world, others have written to me in support of xm's reauthorization and i'm speaking for them here today. now, i'd like to share with my colleagues a story about a situation in ukraine something that provides a great example of how the export-import bank can play a critical role in furthering u.s. national security and economic interest.

ukraine gets fully half of its electricity from nuclear power. historically they have been dependent on russia to manage the used fuel from its plants. after the orange revolution ukraine moved to break that tie by establishing its own spent fuel storage facility. i know about this issue because a new jersey firm hol tech international won the contract to construct that facility. because of russia's military aggression the government in ukraine did not have the resources to go forward with that new jersey form. that's where the xm bank comes in, to help manage the risk of investing in this strategically important done re, something that the senate has clearly ex poused on by virtue of that it has had in the ukraine freedom support act that i wrote with senator corker xm can make this

possible. it will bring income into new jersey where hol tech is expanding its presence it would support ukraine's ability to develop it's on expertise and infrastructure and remove a lever of russian influence in ukraine, ukraine would also keep over $1.5 billion in fees that would otherwise be sent to russia. unfortunately since the contract was awarded the security situation in ukraine has not permitted the pro correct to go forward. now, we heard some argument on tuesday that american firms should essentially sink or swim on their own in international market, that we don't need additional options to pursue our diplomatic and security goals even as other nations including our most significant trading partners and rivals continue to pour more resources into promoting their exports. in a world where all countries wished us well, in a world with no other nations provided support for the international

operations of their industries that would be an appealing idea, but that is not the world that we live in. so here is a median sized business ngs no, not some major cooperation that is on the front line of both nuclear technology an ongoing national security challenge that would be an important beneficiary of the kind of work that xm does. president hochberg how do you see the role that xm bank plays in bolstering u.s. national security and foreign policies of the services that it provides u.s. companies? >> well, thank you, senator menendez and thank you for your support and the many companies you work with in new jersey. our number one right is u.s. jobs, that's what we're here to do we're here to support u.s. jobs through the financing of exports. that said, obviously economic security and national second is writ go hand in hand. the number of defense

contractors who are now moving into commercial fields, osh kosh is a good example, darling is another example, there are a number of them financing theirs, but most importantly it's about u. have energy security and you mentioned nuclear -- uk clear is one of the areas that we've been active in, it's one of the areas commercial banks are reluctant to engage in and certainly reluctant to engage in without our assistance an guarantees. so i think there is a very close relationship between those national security interests, economic security and jobs. >> let me ask you one or question. china has been particularly aggressive in export fpsing. as of 2013 it extended over $45.5 billion in export credits, three times the amount extended by xm. so you touch on this in your written and oral testimony. could you elaborate on the tends you're seeing by major economic competitors. >> china is right now the largest exporter am in the

world, we were number one a dozen years ago, i actually believe we could be the number one exporter again because of the technology and invasion. that said china has four different state-owned banks that do export credit. we have one. just one of those called cynas had hore has done about $267 billion in loans and guarantees. it took us 80 years to get to $590 billion. and they have indicated they have no interest in stopping whatsoever. that said the secretary of the treasury we have been working on negotiating that they join an international framework so we have transparency and we try and tamp that down, but that is an ongoing negotiation and it's taking time. >> mr. chairman, i just had think that we should not engage in unilateral disarmament and that is exactly what we will do if we let xm expire and we are facing global competitors and many countries china bra glil

and others that are helping their companies create the opportunity to penetrate markets which means jobs here at home. thank you. >> senator toomey. >> thank you, mr. chairman. you know, i think -- i think we should hopefully reach an understanding of what is and what isn't going on here. one of the arguments that supporters of the xm bank made is that this is somehow a free policy choice this is a free lunch. the xm bank creates jobs, no jobs are destroyed no cost to the taxpayer. in economics there is no such thing as a free lunch, there's a cost to everything that is provided. the chairman states in his testimony that over the last couple of decades the xm bank has sent nearly $7 billion to the u.s. treasury. i'm sure that's true.

but if you go back a little further behind that then we had a pert when the xm bank was costing the taxpayer direct money in the form of bailouts in the '80s, $3 billion bailout in the mid '90s about $10 billion in taxpayer bailouts and that was at a time when the xm bank was a fraction of the size that it is today. the chairman also it he was that xm bank is restoring free market factors to their rightful place. i don't understand how we could come to such a conclusion. it's clear to me that the xm bank interferes with the free market. you may decide that the interference is worthwhile and is desireable but let not pretend that it's not an interference in the free market. that's my point. chairman refers to the xm bank finances as filling in the gaps. well, if there is a gap then that tells youing is. here's another way to look at

this. if the xm bank is creating jobs, if this is -- if this is to be believed, then it seems to me it must necessarily be the case that the x mflt is providing financing that would not otherwise occur or its providing it on terms that it would not be obtained in the market, right? that's the only possible way in which you can say that it's creating jobs. but if that's the case, if the xm bank is financing at rates and terms that the market is either unable or unwilling to offer, then that's not the free market. in fact, thea the definition of a subs is dee. it's the sub dee that the taxpayers are being forced to pay not in the form at the moment of writing a check but in the form of not being adequately compensated for the risk that taxpayers are being required to take. so i don't think there is even a question that taxpayers are being forced to take this risk, the question is for whom? if it's to large politically

connected corporations then that strikes me as crony capitalism. if it's less that happen credit worthy foreign corporations then we're putting taxpayers at risk to benefit them. none of these outcomes in my view make sense is. let me ask one specific question of the chairman. when we talk about the jobs that are created, do you net out the lost jobs in the industries where the competitive disadvantage that the xm confers occurs? so we know for instance, airline companies that have to compete with foreign airlines that get the subsidy of cheaper aircraft miners that have to compete with overseas mining operations they get the subsidy of mining equipment refineries in the united states that have to compete with foreign refineries that benefit in a similar fashion. it seems to me the last job out

to count. do you include that in your analysis? >> senator, thank you and thank you for coming today. first of all, there are a couple of things you mentioned. we never -- xm has not received a single bailout. from 1934 to 1992 we sent a billion dollars to the taxpayers. after federal credit reform act of 1990 from '92 to 2014 we've sent $6.9 billion. that's cash that leaves the checking account of the export-import bank and goes to the treasury. it is the sadest day for a cfo each year as that money leaves our bank account. let me be clear about that. we don't pick winners and losers, companies come to us if they need our financing to compete with overseas competition and sometimes the markets are not fully free and open in the overseas international market. that's where we compete, that's where we step in when there's a gap in the marketplace. we also do something put in

congress since 1968 called and mic income review. it said if we're going to support the export of capital equipment, use the example of mining equipment, we have to make sure that the benefit to the u.s. economy from that will make sure there's a net benefit to our economy. so is we do that each and every one of those -- we in fact look at every single transaction to ensure -- >> so if it you're looking at the net you're acknowledging that there are some who win and some who lose and then you add it up and see on balance is it a net positive. is that the way -- >> we make sure that there's a net benefit and the board the board that senate confirmed takes that into account. >> how does that not include winners and losers? you have of' kind of acknowledged that there are winners and we count them and there are losers which we create, but as long as the net we think is po testify in our analysis then it's okay. >> well the net winners are the united states economy and u.s. jobs. the choice, sir is they're going to build that mine and we're either going to have u.s.

mining equipment or chinese or japanese or korean. so we wanted the u.s. economy to win and make sure those jobs are here not elsewhere. >> i've run out of time, mr. chairman. i appreciate the indulgence. let me point out the gao has come to the con crucial that this does not create net new jobs, it shifts job creation and in that process in my view it certainly is picking winners and losers. >> thank you. senator warren. >> thank you mr. chairman. i just want to follow up on this question on jobs. we talk a lot about the xm and about jobs and i believe that the xp bank helps create american jobs and pur economic growth, but i also think that the bank's operations can be improved in certain areas so i want to follow up on some questions i asked you the last time that you were before this committee. as i noted at the hearing last year the core of the bank's work is to promote trade by providing financing for foreign companies to be able to buy u.s. goods. obviously that helps the u.s.

economy and we want to sell those goods as you have been testifying to this morning. but in some cases the foreign company purchasing those goods also has u.s. competitors so helping that foreign company can mean that the foreign buyer gets a benefit not available to their u.s. competitors. so i want to start where i left off last time. before agreeing to finance a deal i just want to make sure i hear this right, does the bank determine whether the number of u.s. jobs that could be lost by helping a foreign competitor is counted into the calculation? >> what we look at, senator warren we look at, one, we review every transaction. corporation has made it clear that if the production that would be generated by some capital equipment export exceeded 1% of u.s. production that would trigger a more in-depth review. so if a diminimus amount might go on the market less than 1% that's a threshold established by congress over 30 years ago,

that actually would say that the impact would be de minimis would not be adverse. >> just so i'm understanding what you're saying here, you're saying you don't do the calculation on how many jobs might be destroyed because a foreign company got a financing benefit that was not available to the u.s. competitors, unless it hits a -- this much higher threshold. so in all the rest of those cases, even though cumulatively they may be a lot, you're not doing that calculation? >> well, what congress has established for us in 1986 or 1984, 30 years ago, is that we -- the threshold is 1%. >> i'm sorry. i think what congress established is you must do the calculation if you hit that high threshold. the question i'm asking is whether you do the calculation -- is it only in those cases and you are adding

up the number of jobs lost and the number of jobs gained? >> well, for example let me be very clear let's use an airline example. we have an airline that provides low cost service in south africa. there is no impact on the u.s. economy by that low cost carrier in south africa buying u.s. equipment to fly around south africa. we don't fly there, we don't fly within south afk. >> so -- >> in those cases no there is no potential impact on the u.s. economy. >> so if you -- >> we look at every traib. >> so if the foreign buyer has no u.s. competitors then you say you don't do the calculation, another way to say it is you've done the calculation and it's sfwloe. >> we review every single transaction. >> and if there is a domestic competitor, u.s. competitor for the foreign company that's about to get the financing do you always then do the calculation of how many jobs might be lost by the u.s. competitor? i'm just asking how this works. >> at that level we do it at the

dollar level. >> what does it mean at the dollar level? >> we'll look at the benefit to the u.s. economy of selling that product, how much revenue -- >> i'm asking a jobs measure question. >> we don't do it on a per job basis. we do it on -- at that level we do it on the economic impact, what was the economic benefit to the united states versus potential any economic adverse impact to the united states. >> so is there ever a case in which the bank has decided not to finance a deal because of its potential impact on u.s. competitors? >> yeah. >> and potentially on jobs? >> yeah. >> and is that publicly available? >> what happens is you know, you are at the university. you know, people don't -- universities issue rejection letters, people don't like them from banks. >> actually i understood banks did issue rejection letters. >> they don't like it to -- when we sit down with a customer and look at that situation we will have that conversation about do you know what, this is an economic impact here, we're going to do a more in-depth

study and this may not pass muster. in those cases sometimes they withdrew. i know one particular case the entity in latin america withdrew, let me just finish for a minute -- and what happened, they still built the petrochemical built, built it all with foreign equipment and we still are competing with that petrochemical plant. >> i'm taking from what you're saying is none of this is publicly available. >> sure it is. if it gets as far as doing the study and there's a vote, but frequently a client pulls out before that time. >> i'm sorry so you're saying there is publicly available data on how many times you have rejected a deal because it would cost american competitors jobs? >> our economic impact data is on the board -- is available after the fact to -- the fact to -- that was on the reform we put in in. >> i want to see what the economic impact study would be on this transaction.

>> i think i got it. you're talking dollars here. i believe the bank helps create jobs. it does it while making money for the taxpayer. i believe the bank ought to be doing all it can to promote job growth overall. not helping at the expense of others. that's why i think that the bank needs a rigorous process for assessing how it's work affects u.s. competitors. and i think the bank should make those redaction ss available. the bank has taken important steps while under your leadership, and you moved it in that direction, and i hope we can continue to work on this, to continue to move in this area. >> we're the only export credit

agency of the 85 around the world that does this. we're the only one that actually goes to the effort to say, is there going to be a net benefit to the u.s. economy? we're the only single one. everyone else says they're going to build it anyway we could lose once or lose twice. >> i appreciate we may be more transparent than some other countries. the question we have to address is whether we are transparent enough. and those calculations are obvious enough when we're trying to evaluate jobs. >> sorry for going over this. >> i think it's important that we find out what it does to our jobs here, and that is not been answered yet. a lot of people are concerned about it, i think some of our airlines, as you know, delta has raised that question, for example, others said, they're not getting the financing that their competitors overseas stayed home are getting. which is a subsidy which they

argued and probably rightfully so it caused american jobs. >> actually i would -- i've heard delta make this claim. they've never substantiated. richard anderson just last august indicated they're adding 1800 new flight attendants this year alone. they are the most profitable airline in the country perhaps the world at this time. >> we have a vote on the floor, we're going to try to make it, we're going to come back and -- because we have -- we might have some more senators here. >> when we get back, maybe 15 minutes or so.

>> it seemed strange to me that we would have the challenges we have heard regarding the renewal to continue forward. i have tried to figure out what it is that is causing the upper arc. it i think this might be part of it. i want to ask some questions here. i mean this to give you the opportunity to explain it. i was in the chair, i was not able to get with the other testimony was earlier. i've like to ask a question and work our way through this and give the opportunity to respond. it i understand the bank is part of the federal government and there are rules and regulations that they have to abide by.

i am concerned when i see you as the head of the bank making some significant political statements that may have caused part of the problem. it only bolsters a concerned at the bank is picking winners and losers. it here is the example i am speaking of. it in 2013, you said the bank engages in important balancing act in supporting our exports. we halfway the impact on the environment associate with our financing. without guidelines, increasing coal plants will discontinue to put more carbon pollution into the air. we cannot do this alone. i support the administration's effort to build an international consensus such that other nations follow our lead in restricting financing of new coal-fired power plants.

this powers a lot of the homes in south dakota. i'm concerned that by using a loaded carbon pollution and making personal statements about which types of x warts you may oppose -- exports you may oppose, the bank becomes about policy goals and less about creating american jobs. it do you think that making the statement was a mistake? does it give the opponents of the xm bank the ammunition to say that you pick winners and losers? >> thanksgiving me an opportunity to talk about this. it i mentioned earlier, we have had a environmental policy that we have inserted in her charter

since 1992, we have been required to look at reasonable repayment and the environmental impact. that's not my doing it. at that has been in our charter for over two decades. administration, they bank got sued. before a got to the bank, the bank agreed to a consent decree -- consent decree on how the bank could do a better job to adhere to the will of congress which is to take the environment into account. the bank has been doing this and it has been an evolving policy over the last two decades. this is not something that i inserted. it is not a personal agenda. >> can you tell me any a place where the united states has identified carbon pollution as a part of your role in terms of managing the environment?

mr. hochberg: the court found that the bank, before i got there, was not taking into account the informants officially. part of it was some of the restrictions on the amount of carbon. that preceded me at the bank. >> i understand you have an obligation in which you can and you are expected and required to promote renewable energy, but i cannot find where you are in a position to determine -- is it your role to say that this is a coal fire claimant and if it is, there's nothing we can do ? mr. hochberg: we look at the environmental impact. it's not for call are against cold. we export coal, coal mining

equipment. the really thing that has been a part of a consent degree is -- consent decree is to look at what the environment is impacted by it. >> you shouldn't be picking winners and losers. i think it gives him the opportunity to point to the fact that, in this particular case, when it comes to your statements, on power plants that are coal-fired, that you do have a desire or an interest in promoting those which are not coal-fired. i bring it up because i think it has to be clarified. either you are picking winners and losers and giving people who do not want to see this bank

continue forward, you are giving them the ammo that they want to show that you are part -- are picking winners and losers and that is not the way they were set up in their opinions nor in my opinion. i wanted to give you the opportunity to correct anything if we are understand -- if we are misunderstanding the focus you think the bank has got. mr. hochberg: all i can say is that we are in the best of our ability to follow the will of congress in taking the environment into account. mr. rounds: you believe it is the role of congress that we not promote, as you call it, carbon pollution through the creation of coal-fired plants or the use of the bank to finance coal-fired banks -- coal-fired -- coal-fired plants in other parts of the world. esther hochberg: we are open to

coal-fired plants in 82 parts of the world. what our current law states is that -- mr. rouse: you would do it in 82 -- mr. hochberg: those we do not have restrictions at all. in wealthier countries countries that have options on renewable gas nuclear in our preparation bill, it says that we do not do any coal-fired plants in those countries where they have an a lot of options. esther rouse: is that directed by congress or is it a policy traded within the agate self? mr. hochberg: that is in current appropriate language. >> basically, you are needing to

make a financial assessment on what you make. ache is under consent order to take that into consideration. it is similar to what happened when epa said carbon is not a pollutant. the united states supreme court said it could be and you have to look at the massachusetts case. i want to make clear this is not a policy or came into existence when the president became the president. it is not something you initiated at the bank, although you are administering it. i think it has graded controversy. as a result, the bill addresses this very issue. it puts within their that you cannot discriminate against any legitimate business. that is something that was vetted very strongly during our

negotiations with coal companies as well or i would not sign on this bill. i think we have addressed a lot of the concerns that the senators have expressed regarding picking winners and losers regarding environmental impact on carbon. so it doesn't mean -- it was not appreciated, but obviously cometh that passes, it will be administered appropriately by the xm back. is that correct? mr. hochberg: we will totally and completely follow the will of congress. the events regulation put in by the court, we made everybody unhappy. we have made the environmental community and happy in the orders unhappy. maybe that makes good policy when everybody is unhappy but not everybody is happy with that outcome. ms. heitkam:p your the

piggy bank for these two large corporations. i would tell you that i have had a fair amount of experience with xm back to my first working with the xm bank as a bank of north dakota and kind of an iconic institution that is actually the state development bank in north dakota and they have been at this very long relationship i think that has been very fruitful for north dakota exporters. i want to have your address what you have done to reach out to the small businesses, like you have reached out in north dakota, whether you think in the kirk high camp will we are -- whether you can achieve a 25% target in the next authorization -- authorization period as required in that bill?

mr. hochberg: i know our exporters and your workers are keenly focused on that. i ran a small business and focused on small business. in this fiscal, we put in an 800 number operators open 8:00 to 8:00 monday through friday standing right now if you would like to if you go on our website, you can find an online chat. ms. heitkamp: do you think you can reach that when he 5%? mr. hochberg: we are demand driven. it will come to us when they need us. in some ways they have more options. when there is a financial crisis, they come to us. i will work with any target. we will strive to do better. we are now doing better than 20 are sent our current target. but it is difficult to know because we are demand driven, what the demand is.

that is the only challenge with any particular target in this regard. heitkamp: obviously, there is a lot a concern and i think the chairman expressed some legitimate concern about reforms. and we are very interested in ongoing activities at the -- that the bank has to address concerns that have been addressed by this committee and by gao and by the inspector general. where do you think you are in adapting and adjusting and responding to the concerns that have been expressed about governance in the bank? mr. hochberg: i mentioned earlier these are the reforms that were put in in 2012 to be complied by agent -- we complied with each and every one of them. they are a number of reforms that have been proposed in the bill. three of the bills that are circulating. i understand the will of congress. we will move forward on any of those reforms that are enacted and do our level best to enact to them quickly and efficiently -- and officially. all i am worried about is not

creating more trouble for small business. mrs. heitkamp: when you look at the bank and you look at the hard deadline we have at the end of the month, how disruptive will it be if we allow the charter to lapse and then try to reinstate that? how much additional cost will the bank experience if we were able to reinstate it? mr. hochberg: the insurgency has already caused a lot of concern. it has caused some banks and insurance brokers to pull back. working capital loan has been somewhat constricted to small businesses. and my fear is that there has been a lot of uncertainty. i spent a lot of time convincing foreign bobbitt -- for buyers we are going to be there and they can rely on us and rely on the united states. even a temporary lapse will have a very negative effect because it makes us less reliable. it makes u.s. companies less rio -- less reliable and puts our workers in jeopardy.

>> like you, mr. chairman. i want to brief you on a project near end you to me. we have already seen 400 of these booked. i would say to my colleagues, i am for xm fixing -- picking winners and losers and those winners should be americans. make sure those 400 orders come to the united states. if you know aviation as i do, an airplane is a back essay black of spare parts. although spare parts for the boeing 737 will be american originated. in the case of the sea 919, they will be largely chinese way of coming on this airplane, i hope

they come to the u.s. of a. thank you, mr. chairman. senator merkley: you may have already address this. and if you have, please let me know. but i wanted to have you discussed the subsidies in what we have been hearing in the new initiative to devote $10 million in expert credit to africa bringing their total to $30 billion in export credits to africa, which is roughly equal and come i believe to the xm global volume for the year.

mr. hochberg: china is a formidable competitor, particularly in sub-saharan africa. total u.s. exports in sub-saharan africa but $23 billion to $24 billion. that is all exports. china will provide $30 billion in exports finance alone. we see them everywhere, power plants, infrastructure mining, perhaps soon aircraft, as senator kirk mentioned. so they are a very formal competitor, particularly so in sub-saharan africa, the fastest growing region in the world right now. sen. merkley: so we have a very unlevel playing field that they are providing finance for their industries and we are not doing the same? mr. hochberg: we have one arm tied behind our back. we abide by a number of global guidelines and rules. and china is untethered like that. sen. merkley: we have been

having a debate here over the fast track and the transpacific partnership and other potential transatlantic agreements. there is a real debate for it will lose jobs in america or create jobs. is it 100% clear that this financing creates jobs here in the united states of america? mr. rochford: -- mr. rock -- mr. hochberg: i can say when hundred percent. sen. merkley: can you say how many jobs are at stake here? mr. hochberg: we supported 164 jobs last year. sen. merkley: thank you very much.

>> thank you for being here this morning. i wanted to share two stories from two of our more important employers in south carolina and get your response to the comments they have made to me. the first one is sage automotive interiors in upstate south atlanta. they were part of the militant group initially because of the downturn in the economy milliken decided to spin them off or basically get rid of them. senior management decided to get the capital together by the company and now they are employing more than 600 employees in three locations around south carolina. in the last five years, they have been able to succeed because of their exporting opportunities. sage has used, according to the company, direct peeper, the ceo has used xm bank backing since its inception to support its export business. because it is necessary for them to do so, a very similar story from another company, another

major player in south atlantic grey's management group. race has been around since 1975 and have locations in spartanburg, south carolina, but also places were senator shelby has residence, i believe, in alabama. they have done very well and they have showcases and showrooms in atlanta dallas and las vegas. they do business in 90 countries. it is a wonderful success story from spartanburg, south carolina. and they tell me, because commercial banks in the u.s. are for pitted from using foreign receivables as collateral, they have no alternative but to apply for xm bank banking to support their international sales support. can you comment on whether these happenings are being let in the wrong direction or not? mr. hochberg: companies come to us when they cannot find the

financing at competitive rates they receive overseas. 90% of our customers are small businesses. a full $10 billion came directly from small businesses. sen. scott: i will ask you this question a little differently. according to sage, commercial banks in the u.s. are prohibited -- is that accurate -- from using these foreign receivables as collateral mr. hochberg:. that's correct. when we insure those ads zero through credit insurance, they will then blend 75%, 80%, 90%. so they can blend capital and get their goods overseas. sen. scott: having operations in making sales and 90 countries, not to be able to use a part of those receivables to determine

their cash flow would be a crippling impact if they lost that opportunity. mr. hochberg: it totally disables them and impedes their seeking export sales in the job succumb with them. sen. scott: i was invited to dinner from somhohohohohohohohoopportunity for me. tom, will you talk to? those folks briefly thank you very much. ? they suggest major players in the aviation world that are very much in opposition to the xm bank, i wonder some of those players perhaps access something like export financing and other countries. are you aware of any of those folks? mr. hochberg: the regional jets that we all fly on -- all american players are made into countries. they are made in brazil and in canada. i know for a fact that delta

airlines is a major user of regional jets and a major user of export credit financing from the canadian government and the brazilian government to finance those jets. if any of us fly to new york on a delta shadow, you are flying on a brazilian plan, and all likely -- in all likelihood funded by brazilian banks. sen. scott: on the reform package that has been offered some of the questions that we are pondering as part of the reform package is to reduce the borrowing authority. your thoughts on that. sen. scott: i know there are a number of reforms. it concerns me that we would constrict or reduce the amount of lending authority we have at xm bank where we got countries like china -- 400 orders --

china has given no indication that they will follow any rules when it comes to financing that. i would certainly have a concern -- obviously, we will work with congress on a solution, but i am concerned about restricting our efforts and sending that bad signal. the signal in the message is very important that we stand fully behind american workers and a mac and experts. sen. scott: mr. chairman, will you provide me an additional 30 seconds? thank you, sir. how about on increasing the reserve requirements? mr. hochberg: there are a number of reforms that have been proposed. there are currently four different bills. to in the house and two in the senate. what we have done is provided technical assistance to any member who would like to review reform by reform. i think it is probably a more thoughtful way of doing it.

i am shooting from the head. terms of some of the generalized reforms. we are looking for a solution. we want to work with this committee and with the house to find what is the proper oversight so we can make sure that we move forward and give some certainty to those exporters. sen. scott: last question. on the pilot program for reinsurance, thoughts? mr. hochberg: if it is the reauthorization, we are very much open to that. sen. scott: i have supported the xm bank in the past. i will support the xm bank today as well. my concern is that we do need reforms in the process. i think it is very important for us to figure out a path going forward. frankly, if we were able to negotiate something other than a unilateral disarmament, i would be open to that as well. so i want to get your thoughts and perhaps have a longer conversation with you about the

necessity of reforms as we move forward. sen. scott: if i can just add we have continually improve the bank. we had 18 reforms in 2012. we complied with all of them. we are also not just winning for congress to come up with reforms. i am very proud of the 400 50 people at at -- at -- 450 people at xm bank. sen. scott: thank you. senator donnelly: thank you for being here. yesterday, one of the witnesses talked about how the xm bank was creating $140 billion in taxpayer risk to the people of the united states. i think they were referring to the long -- the loan guarantees the xm bank has made for your customers the

other product portfolios. mr. hochberg: we report that every 90 days. sen. donnelly: how is that considered industrywide? mr. hochberg: i would say most commercial banks are apples to apples, multiples of that. sen. donnelly: and so when they talk about that, what they are exley talking about is the loan portfolio that any bank would have, that any operation would have. so at the end of -- let's say the last three years, did you have a profit or a loss at the end of those last three years? mr. hochberg: we have sent money to the treasury, last year, $675 billion. over the last two decades, $6.9 billion. that is actual cash that leaves the checking out -- checking

account of the xm bank and goes to the treasury. that's actual cash. sen. donnelly: i am from the state of indiana. one of our mutual friends has been very important in the operations of the xm bank and has run a great company. he has used the xm bank, helped in management of it. i think that is reflective of our state. it is small and midsize businesses come over hundred companies that have benefited from the bank in recent years. overall, do you think that those 100 companies would have found similar financing opportunities if xm had not been around? mr. hochberg: companies have to certify that we are the lender of last resort. admiral is a good example. as they have grown with us, they are now in a private sector. he couldn't three or four years ago. working with xm, their sales have grown. it is now bankable by the private sector.

if that changes, we would welcome that. sen. donnelly: which is almost a built-in formula for success for you and for the businesses which is they work with you and it's also good for our banks in that now, there is no need for the xm bank and we are sending exports overseas and jobs stay right here in the united states of america. one other question i wanted to ask you. so if the financing -- if the xm bank wasn't there where would companies -- where would some of these small companies get financing if they are sending product overseas? what other opportunities do they have? mr. hochberg: frequently, what they have to do, which is very bad for business is demand 100% payment in advance. the problem is that is not very competitive. their competitors in china and

korea, you name it, sell an open account. with xm bank, we are able to provide the bank that they can meet the foreign competition. i should quickly add, in the short term space which is what small businesses are operating and, we have seen as many as 20 more export credit agencies focus on short-term and small business in the last couple of years. i think there is even more competition for small business exporters than there has been in the past. sen. donnelly: i just want to conclude by saying, in indiana those over 100 businesses appreciate what xm bank has done. the families who their mom or dad have a really good job have the chance to buy a home and take them on a vacation. those families really appreciated as well. that is the real world. it is a theory. it is in some economic postulation. it is the real world of someone

who gets a job because products are being shipped overseas that were made in muncie, indiana, rather than in beijing or somewhere else. so thank you very much. post: this sunday, we will re-air the interview with jim webb. you can watch it at 6:35 and 9:35 eastern time here on c-span. here are some of our featured programs this weekend on the c-span network. on c-span 2, book tv is live at the chicago tribune printers row that fast. -- renters row lit -- printers row lit fest. our festival coverage is followed by a two or the new york times book review at 7:30.

on sunday a new and, we continue our live coverage of the book festival with our three-our in-depth program with lawrence wright live from the lit fest stage. he will take your phone calls and questions from the audience. festival speakers include scott simon, kevin scholz, and alice goffman. on american history tv on c-span 3, join us for several featured programs on sunday, beginning at 4:00 p.m. eastern on real america, the nasa film, the four days of gemini 4 the 1965 manned spaceflight and the first american to walk in space. at 4:30, world war ii photographer tony for car on his thousands of pictures capturing the were experience and the stories behind those images. at 6:00, on a mac and artifacts we visit with senator lamar alexander as he visits stories

in his washington, d.c., senate office. and at 6:30, bob schieffer peter arnett and david hume kennerly discuss their vietnam war expenses at the opening of the museum's reporting vietnam exhibit. get a complete schedule at www.c-span.org. coming up like today on c-span washington journal's next at 10:30 a.m. eastern a discussion about states compliance with the epa carbon emissions limitations for power plants. at 11:30, a defense department briefing on the u.s. campaign against isis. coming up in about 45 minutes, we will take a look at the legislation that changes the nsa's data collection program. our guess is julian sanchez. at 8:30, a discussion with me been shaped on how radical islam

recruits followers. at 9:30, we will joined by mark kiesling. on transgender rights. host: good morning, it is "the washington journal." we want to get your thoughts on the most important are least important news story of the week. lots of events took place this week. for million federal government workers may have had their data compromised by a government hack. democrat lincoln chafee and rick perry both announce their presidential campaigns. you may want to throw your own story into the mix as well. here's how you can do so this