ICYMI: Rep. Jeff Crank's February Hearing Highlights

1. Rep. Crank joins the Armed Services Committee on Strengthening America's Defense to Deter War

Congressman Jeff Crank (CO-05): Mr. Fanning, in your written testimony you touched on how rapid inflation caused by the Biden administration weakened the defense industrial base, and I just yesterday met with Axellio,which is in my district, about that very thing.

They talked about the inflation crisis and how it was especially harmful for the small businesses in the industrial base.

You know, these mom-and-pop shops effectively had their fixed price contracts renegotiated to slash their revenue by 20% through no fault of their own, and for many companies, this means laying off staff or closing their doors.

What flexibility does the DOD have to support small contractors during extreme situations like the inflation crisis that we've had, and how can Congress assist them?

Mr. Eric Fanning, President and CEO of Aerospace Industries Association: Well first, I think recognizing the impact of inflation in my observation in this job, having been in government before, is that industry is the shock absorber of inflation.

The Pentagon seemed to think that it had managed through inflation, because it hadn't hit it yet.

When the next round of contracts or economic order quantities or competitions take place, that inflation that has been absorbed by industry is going to show up and the government's going to have to deal with it.

I think the way that government can do this in real time, which is hard, is to pay for the contracts. Most of the contracts that are directly with the government have adjustment clauses in them, but it doesn't matter if there's no money to pay for those adjustment clauses and that's what caused, you know, the primes.

Anyone who has a direct contract with the government to absorb it and then pass it down through the supply chain. And what you're seeing now is small businesses that are locked into contracts to their customer pre-inflation but are now buying materials and parts in post inflation and their margins are just getting squeezed.

And, we can chase them out of the defense industrial base because they can adjust to inflation much more quickly on the non-defense side of the work that they're doing, right?

2. Rep. Crank Discusses America Taking Back Control of the Mineral Supply Chain

Congressman Jeff Crank (CO-05): China has no intention of relinquishing its chokehold on any part of the mineral supply chain, and rather than taking a proactive, thoughtful and strategic approach to minerals, the past four years the Biden Administration stifled domestic mineral production issuing public lands withdrawals or vacated leases to stop energy and mineral production on federal lands.

They issued a report on mining reforms that lacked any substantial ideas to improve the permitting timelines or projects, and they botched the implementation of Fiscal Responsibility Act NEPA reforms that were intended to make the permitting process predictable.

So, it appears that only when it was necessary or an existential threat to National Security or their climate agenda, did the Biden Administration take any positive action on domestic mining.

Mr. Harrell, I completely agree that the US needs a better domestic strategy not only for our economic prosperity, but also for our national security.

However, China has a global strategy to retain mineral dominance. So, what actions globally should the US be considering to reassert dominance in the minerals market?

Mr. Jeremey Harrell, CEO, ClearPath: Thank you, Congressman Crank, it's a great question. It's an important piece of the puzzle. We have to do things here at home, and there's global moves that we need to make these bilateral multilateral agreements with partners, that jointly try to wane off of the Chinese dominance in this realm.

I think they are going to be really important. We need to use tools in the tool belt that we have here in the US, things that are going to come before this Congress in the next two years. The development finance corporation's reauthorization will be coming up here soon.

That's one tool in the tool belt where we can help finance projects abroad as well that can support our mineral needs. I think as Miss Lyon's referenced the export-import Bank of the United States that's up for reauthorization in 2026; another important tool to catalyze and promote US technology and infrastructure here in this country, if we use it the right way. We have to use those tools in our tool belt.

We're never going to out-subsidize China, so we need to use these innovative free market financing tools that the US has at its disposal to really compete.