Add this to the growing list of White House headaches: President Trump’s pick to lead the Export-Import Bank is hanging by a fraying thread in the Senate.
The nominee — former Rep. Scott Garrett (R-N.J.) — faces a buzz saw of bipartisan resistance thanks to his outspoken efforts while in Congress to dismantle the bank he now seeks to lead. Garrett is making the rounds among senators this week, hoping to tread a narrow path to confirmation by making assurances he’ll help the institution get back up and running while pursuing reforms demanded by conservatives.
By all accounts, it’s been a bumpy performance. Garrett opened a meeting with a number of Senate Democrats on Tuesday by volunteering that he was surprised to have been nominated. Sources familiar with the meeting said it went downhill from there, with the New Jersey Republican declining to say whether if confirmed, he’d advocate for the bank’s reauthorization (it's long been a punching bag of hardline conservatives). By the end of the roughly 45-minute huddle, senators were directing their questions to Garrett’s administration minder, White House legislative affairs chief Marc Short, since he seemed better informed on issues facing the bank, sources briefed on it said. The meeting, Democratic participants said in a joint statement afterward, was “bizarre.”
More consequentially for Garrett, Republican skeptics on the Senate Banking Committee aren't committing to approving him. Sen. Mike Rounds (R-S.D.) met with Garrett on Wednesday and said via statement afterward only that it was a good meeting “and we are continuing to do our due diligence.”
Sen. Tim Scott (R-S.C.) — whose state hosts major facilities for Boeing, General Electric and other Ex-Im beneficiaries — likewise reserved judgment after meeting with Garrett. Scott has said the nominee must make a public statement of his support for the bank’s reauthorization, a demand he reaffirmed in a statement Wednesday evening. “My position has not changed,” Scott said. “Mr. Garrett will have that opportunity when he testifies before the Senate Banking Committee, where I will be asking some direct and pointed questions regarding the future of the Bank.”
Scott’s fellow South Carolinian, Sen. Lindsey O. Graham (R), has gone further, last month calling on the White House to pull Garrett’s nomination and replace him with somebody more supportive of the bank’s mission. If Rounds and Scott oppose Garrett in committee, assuming Democrats hang together in opposition, Garrett will be defeated. If he manages to surmount that obstacle, things don't look much brighter on the Senate floor -- if Graham opposes him, it would be all over.
But Trump officials backing Garrett argue anyone friendlier to the bank would lose even more votes from the GOP’s right flank. “If a traditional, Chamber-of-Commerce candidate were put forward, conservatives would not reauthorize the bank,” one senior administration official tells me. ”The bigger issue is that the bank is something that divides the Republican Party and the conservative movement.”
It’s true that the fight over Garrett cuts to the core of a sharp GOP ideological rift. The bank, which exists to provide credit financing to foreign buyers of American-made products, has existed in happy obscurity for most of the time since its New Deal-era founding.
Five years ago, hard-line conservatives led by Rep. Jeb Hensarling (R-Tex.) seized on it because it was small. They’ve aimed to dispatch the bank — and its roughly 450 employees, equivalent to the Office of Surface Mining — as a proxy win in a wider war for free-market purity in the party. “The Bank of Boeing,” as these critics deride it, offers little more than a taxpayer-funded subsidy in the form of loan guarantees to massive corporate interests. Defenders say it provides a critical boost to American manufacturers competing against foreign companies supported by similar facilities in their native countries.
Hensarling, now chairman of the House Financial Services Committee, Garrett and their allies have scored temporary victories. In 2015, its charter lapsed for five months, shutting it down. And the bank has lacked a quorum for months, prohibiting it from approving deals worth more than $10 million (remember: now-ousted White House communications director Anthony Scaramucci was a vice president and senior strategy officer at Ex-Im before he was dispatched from Trump world).
Trump himself has been on both sides of the fight, siding with critics as a candidate, then doing an about-face in April by nominating Garrett in a bid to restore the bank’s quorum -- all while pushing for institutional reforms.
In recent weeks, business groups backing the bank have waged an unusually aggressive campaign to sink Garrett’s nomination in one instance of the divide between them and Trump. The Business Roundtable opposes Garrett:
The Aerospace Industries Association has urged Trump to withdraw the nomination.
And the National Association of Manufacturers has been noisiest of all, launching a series of late-July ads against him in three states and keeping up a drumbeat of opposition within the Beltway:
From the National Association of Manufacturers president and CEO:
In the face of the mounting pushback, administration officials recently considered swapping Garrett’s nomination to serve as the bank’s chairman with a board seat they’ve offered to former Rep. Spencer Bachus (R-Ala.), Hensarling’s predecessor as the top Republican on the House Financial Services panel and a reliable Ex-Im backer. But the senior administration official tells me that the White House remains committed to Garrett.
As one industry source close to the situation frames it, the power to salvage Garrett’s nomination now lies with the nominee alone: “If he can’t figure out how to square the circle here, I don’t see how it happens.”
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— DOW 22,000! The milestone that the Dow Jones Industrial Average achieved Wednesday — surging in part on the strength of Apple earnings, which pushed the tech giant's shares up 6 percent, or $48 billion — is meaningless. But it serves as a fresh reminder of what's become one of the longest bull markets in history, and one that looks increasingly untethered to the chaos engulfing Washington. That's a good thing, to the extent it means investors have replaced their overheated expectations for massive stimulus from Washington after Trump's election with an optimism grounded in economic fundamentals.
As the New York Times's Nelson Schwartz reports, markets are tuning out the "Washington soap opera": "Besides steady economic growth or less regulation, investors also have been encouraged by the loose reins of central banks like the Federal Reserve, which have helped keep interest rates not far above their historic lows. Inflation, too, remains tame, with price increases in recent months actually falling short of the Fed’s targets."
That hasn't stopped Trump from claiming credit, early and often:
Stock Market could hit all-time high (again) 22,000 today. Was 18,000 only 6 months ago on Election Day. Mainstream media seldom mentions!— Donald J. Trump (@realDonaldTrump) August 1, 2017
But sharp market observers have been quick to point out that Trump is more like a fan of a winning Super Bowl team, not its quarterback:
Hi Eric. Every single country on earth has a rallying stock market this year. Your dad isn’t the president in most of them. https://t.co/QIDVXA8mpR— Downtown Josh Brown (@ReformedBroker) August 2, 2017
— There are other reasons Trump should be wary of making too much of the stock market's performance. For one, most of those gains are going to the wealthy. The Post's Heather Long: "Nearly half of country has $0 invested in the market, according to the Federal Reserve and numerous surveys by groups such as Gallup and Bankrate. That means people have no money in pension funds, 401(k) retirement plans, IRAs, mutual funds or ETFs. They certainly don't own individual stocks such as Facebook or Apple. Wall Street is not Main Street. Many presidents have learned that lesson. Rising stock prices don't always translate to higher economic growth. Trump's challenge is to help lift jobs and wages in the 'real economy.'"
— Not to mention, stocks can move in two directions. The Wall Street Journal's Ben Eisen notes the historical case: "Stock-market strategists have warned that hitching his administration to the market may be dangerous. After all, big gains in the Dow during the early months of a presidency don’t always equate to big gains during the rest of the presidency. The fastest 20% rise following the election of a new president was the 63 days it took after President Herbert Hoover’s win in 1928. The stock market was riding a period of exuberance at the time that would soon end with the Great Depression. The Dow ended up losing nearly three quarters of its value during Mr. Hoover’s term."
But if stocks swoon, Trump being Trump, he'll just talk about something else. He doesn't mention his poll numbers so often anymore. And there's a good reason for that. (He could always cheer for global temperatures — they're breaking records.)
— With regrets, Trump signed into law a package of Russian, Iranian, and North Korean sanctions that also strips some of his power to roll back penalties targeting Moscow. The Post's Abby Phillip and Karoun Demirjian: "Trump’s reluctant signing of the bill came nearly a week after it was approved overwhelmingly by bipartisan majorities in the House and the Senate that assured that any veto could be overridden. Trump’s statement, however, raised questions about whether he will enforce all of the law’s provisions. He called the legislation — which imposes new penalties on Russia, Iran and North Korea — 'seriously flawed,' primarily because it restricts his ability to negotiate sanctions concerning Moscow without congressional approval."
— White House economic adviser Gary Cohn has overtaken Fed chair Janet L. Yellen as the candidate most likely to lead the central bank next when Yellen's term expires early next year, according to a Bloomberg survey of 44 economists. Cohn's surge comes after Trump told the Wall Street Journal that his top economic hand is the leading contender for the post.
— Congressional Republican leaders are preparing a plan to force a September vote on a clean debt ceiling hike, Politico's Seung Min Kim and Rachel Bade report. The gambit will set up a high-stakes confrontation would those in the part who say they require deep spending cuts or other policy concessions to support extending the federal government's borrowing authority. More: "But beyond the leadership, there are few Republican takers, at least so far. GOP lawmakers in both chambers of Congress are calling for any debt ceiling hike to be accompanied by spending cuts or fiscal reforms — the same demand they made repeatedly during Barack Obama’s two terms. That means McConnell (R-Ky.) and Ryan (R-Wis.) will have to rely on Democrats and enough moderate Republicans to help them avert a financial catastrophe by Sept. 29, the day Treasury exhausts its borrowing authority and the very last day for Congress to act."
— A top House conservative is relieving some of the pressure around the vote, declaring Wednesday that the United States won't default and seeming to ease up on demands for policy concessions in return for supporting a debt-ceiling hike. Rep. Mark Meadows (R-N.C.), who heads the House Freedom Caucus, told reporters, “I don’t believe we should play around with the full faith and credit of our country. I’m bullish on getting it done." Bloomberg's Anna Edgerton and Erik Wasson: "Raising the debt ceiling is a thorny problem for Republican congressional leaders because, even with Meadows on board, some conservatives say they won’t vote for an increase without spending cuts. Adding those spending cuts would risk losing the eight Democrats needed to reach the 60-vote threshold for advancing legislation in the Senate."
— The Treasury Department can meet the federal government's obligations through September but urged Congress on Wednesday to act — "promptly" — to lift the debt ceiling. The Wall Street Journal's Kate Davidson: "The Treasury has been employing cash-conservation measures since mid-March, when government debt hit the statutory limit at nearly $20 trillion, and had imposed a “debt issuance suspension period” that expired Friday."
— Senate Democrats on Wednesday presented their plan to protect workers and crack down on unfair competition. The effort, part of the party's new "Better Deal" agenda, represents the minority's attempt to reclaim the tough-on-trade mantle from a Republican president who snatched it from them during the last campaign, the New York Times's Binyamin Applebaum: "The political challenge for Democrats is that the proposals echo Mr. Trump’s ideas on trade. Even the rhetoric Wednesday had a distinctly Trumpian flavor."
Trump, meanwhile, is set Friday to announce a major escalation in a trade confrontation with the Chinese. He will make a speech and sign a memo targeting China's trade and intellectual property practices. CNBC reports: "U.S. Trade Representative Robert E. Lighthizer would then initiate an investigation under the Trade Act of 1974's Section 301, which allows the president to unilaterally impose tariffs or other trade restrictions to protect U.S. industries, the sources said. It is unclear whether such a probe would result in trade sanctions against China, which Beijing would almost certainly challenge before the World Trade Organization.
— The Senate on Wednesday approved Marvin Kaplan, one of Trump's two picks for the National Labor Relations Board. The Wall Street Journal's Eric Morath reports: "Some business groups have expressed frustration about lingering vacancies on the board, one of several Washington, D.C., bodies without a full complement of appointed officials, because it has slowed efforts to roll back decisions made during Mr. Obama’s tenure. Labor groups have spoken out against Mr. Trump’s nominees."
- The Senate Finance Committee holds a hearing on various nominations.
The Federal Reserve Board holds a conference on regional food system investments.
From The Post's Tom Toles: "Donald Trump Jr. is channeled in a Donald Trump senior moment:"
1600 Pennsylvania Ave.: The 'President's Palace' or Trump's 'dump'?:
White House senior policy adviser Stephen Miller says an “endless flow of unskilled workers” makes no sense:
President Trump signs Russia sanctions bill, calls it “seriously flawed”:
Apple shares have soared to record prices:
Watch Stephen Miller’s heated exchange with CNN’s Jim Acosta:
Watch Stephen Colbert's take on President Trump's "RAISE Act":