WASHINGTON — The Senate is expected to vote this week on three nominees to serve on the board of the Export-Import Bank of the United States, giving it the ability for the first time in years to approve large deals, including for satellites and launches.
Senate Majority Leader Mitch McConnell (R-Ky.) filed cloture motions May 2 for the nominations of Kimberly Reed to be president of the Ex-Im Bank and Spencer Bachus III and Judith DelZoppo Pryor to serve on the board of the bank. The Senate is set to vote on those cloture motions May 6. If senators vote to invoke cloture, it would set up votes to confirm the nominees after debate of no more than two hours per nominee.
Should all three be confirmed, it would give the five-member board of the bank a quorum for the first time since Congress passed a reauthorization of the bank in 2015. That board is currently vacant with the exception of an acting chairman and president, Jeffrey Gerrish. Without a quorum, the bank is unable to approve deals larger than $10 million.
The aerospace industry has been among those calling on the Senate to confirm the nominees, who were favorably reported to the full Senate by the Senate Banking Committee in February. In a May 3 statement, the Aerospace Industries Association argued that, without a fully functioning Ex-Im Bank, the United States was at a competitive disadvantage to other countries with functioning export credit agencies.
“Other countries around the world are supporting their industries through their export credit agencies, while the United States is not using this vital tool in our economic toolbox,” Eric Fanning, president and chief executive of the association, said in the statement. “By creating quorum for the Bank, we are sending a clear signal that America is serious about competing in the global marketplace.”
The bank has faced opposition from some conservative organizations, who believe that Ex-Im distorts the market in favor of large manufacturers. That debate held up reauthorization of the bank in 2015, causing its charter to lapse for more than five months until Congress approved a reauthorization bill.
While reestablishing a quorum for the Ex-Im board would allow it to resume approving large deals, it’s not clear how big of an effect it will have on the space industry. Prior to the lapse of the bank’s charter, it had backed a number of contracts for geostationary communications satellites and their launches. However, demand for such satellites has plummeted in recent years, from an annual average of 20 to 25 to fewer than 10.
Industry officials, though, say Ex-Im is needed to remain competitive, particularly with China. In testimony at an April 25 hearing of the U.S.-China Economic and Security Review Commission on China’s space efforts, Mike Gold, vice president of Maxar Technologies, said Chinese companies like China Great Wall Industry Corporation are able to provide “aggressive financing” that American manufacturers, without Ex-Im support, cannot match.
“If the U.S. government fails to resuscitate the Export-Import Bank, domestic satellite manufacturers will be unable to compete with Chinese or, for that matter, rival European and Japanese firms,” he said.
Gold said later in the hearing that he expected some growth in GEO satellite orders in the near future. “I do believe, frankly, that the pendulum is going to swing back with GEO. Maybe it’s not 20 satellites per year again, but it could be closer to 10 or 12,” he said. “If we don’t get Ex-Im back into action, this whole issue is going to be moot.”