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Export-Import Bank of the United States (Ex-Im Bank) Chairman John E. Robson testified yesterday on Ex-Im Bank's fiscal year 2002 budget.

In testimony before the House Appropriations Subcommittee on Foreign Operations, Robson estimated that Ex-Im Bank will have a total of $723 million in program budget funds available for fiscal year 2002, including the Administration's proposed $633 million appropriation plus approximately $90 million in additional program budget funds due to cancellation of prior year commitments. Robson, who took over as Ex-Im Bank's chairman at the end of last month, projected the budget will support approximately $11.4 billion in export credit authorizations. He referred to this as the bang for the buck approach.

What is most relevant in assessing the Administration's fiscal year 2002 program budget request of $633 million — and most important to the execution of the Bank's mission — is an analysis of what dollar amount of export transactions the Bank will be able to authorize based on those and other program budget resources which may be available to us in fiscal year 2002, Robson said. He explained that the bang for the buck calculation was based on an historic average of about $15 in export credits authorized per $1 dollar of program budget used.

Robson noted that the fiscal 2002 program budget is down from $863 million in fiscal year 2001. But he said the funding decline will have a smaller-than-expected effect on the level of exports that Ex-Im Bank can support because of lower credit risks in fiscal year 2002, calculated by the Office of Management and Budget. When credit risks in emerging markets decline, Ex-Im Bank can set aside a smaller reserve for its export transactions, spending less of its program budget funds to support more overseas sales.

Robson projected a range of U.S. exporter demand for Ex-Im Bank credits of between $11.9 billion and $14.5 billion, with a likely mid range of $12.5 billion, which would exceed the Bank's available resources. In response to the question of whether increasing Ex-Im Bank's financing fees or reducing coverage would make transactions less costly, Robson said he will consider conducting limited clinical trials of raising fees and/or lowering Ex-Im Bank coverage of export transactions from the current 85 percent. He said the trials would help shed light on whether such changes in Ex-Im Bank financing support would enable the Bank to fulfill its Congressional mandate of keeping U.S. exporters competitive.

It would be my plan to work with the export community and Congress in designing careful and limited experiments and to make what data was revealed available to Congress and other interested parties, Robson said. Some orderly and cautious exploration of the potential impact of such changes on the Bank's resource usage and U.S. exporter competitiveness could possibly illuminate ways in which the Bank could increase the firepower of its resources without adverse competitive consequences to our exporters.

Robson requested a $65 million administrative budget for Ex-Im Bank, up from $62 million in fiscal year 2001. He said that level is essential to improve Ex-Im Bank's overall efficiency, decrease case processing time, upgrade information technology systems, and expand Ex-Im Bank's customer base by reaching greater numbers of small- and medium-sized businesses.

Ex-Im Bank is an independent U.S. government agency that helps finance the sale of U.S. exports primarily to emerging markets throughout the world, by providing loans, guarantees, and insurance. Ex-Im Bank supported $15.5 billion in U.S. exports in fiscal year 2000.