The White House announced Friday that it will nominate an outspoken critic of the Export-Import Bank to head the agency, following a week in which President Trump appeared to reverse his position on the controversial bank.
Former Rep. Scott Garrett (R-N.J.), who voted twice against reauthorizing the bank while in Congress, will be nominated as president of the bank. Separately, former Rep. Spencer T. Bachus III (R-Ala.) will be nominated to join the bank’s board. Both nominees require congressional confirmation.
Garrett, a deeply conservative Congressman who helped found the House Freedom Caucus, has in the past heavily criticized the agency he may now be tasked with leading. In a speech on the floor of the House in 2015, Garrett called the Ex-Im Bank a “fund for corporate welfare” and “a bank that embodies the corruption of the free enterprise system.”
The bank, which offers financial support to U.S. exporters, is despised by some conservative Republicans, who have forced it to remain effectively dormant for nearly two years. Yet the appointments themselves could allow the bank to resume lending in earnest, after being effectively barred from acting by a lack of leadership.
Trump opposed the bank during the campaign, but indicated he planned to reopen the bank for business in an interview with the Wall Street Journal on Wednesday — one of several recent decisions by the president that suggest a shift in his views on economic policy.
In the interview, Trump said that he had been “much opposed” to the Export-Import Bank, until he realized that the bank helps small companies and that other countries offer similar assistance. “So instinctively you would say it’s a ridiculous thing, but actually it’s a very good thing and it actually makes money,” Trump said.
Trump — who won the Republican nomination and presidency on an agenda that eschewed conservative economic thinking — has adopted more orthodox GOP positions since taking office. Also Friday, his treasury secretary, Steven T. Mnuchin, declined to declare that China is manipulating its currency in an official report, pleasing economists and experts on trade but violating a promise that the president frequently repeated on the stump.
Conservative lawmakers have lambasted the Export-Import Bank for years. The bank helps U.S. firms sell their products abroad by offering cheap, federally guaranteed loans and other forms of financial support. Opponents point out that the bulk of the assistance provided by the bank goes to major multinational firms, such as Boeing.
In 2015, Trump called the bank's support “feather bedding,” and said the benefits mainly went to “a few companies — and these are companies that can do very well without it.”
How Garrett might alter the bank's operations to win support from conservative Republicans remains to be seen.
A conservative faction in Congress succeeded in shutting down the bank in 2015. The bank reopened later that year, but conservative lawmakers prevented then-President Obama from filling two vacancies on the board. As a result, the board lacked the quorum legally required for any consequential deals.
Trump's nominees — if confirmed by the Senate — may allow the bank to begin doing business again.
Sen. Heidi Heitkamp (D-N.D.) said in a statement Friday evening that the nominations moved the bank's board "closer to becoming fully functional."
"While I have reservations about his nominations and believe they need to be thoroughly vetted, this is a positive step toward helping the Bank do its job of delivering funds back to the taxpayers while supporting American businesses and workers," Heitkamp said.
Despite his history with the House Freedom Caucus, Garrett also has ties to Wall Street, having chaired the powerful Subcommittee on Capital Markets and Government Sponsored Enterprises, which watches over financial institutions and the Securities and Exchange Commission.
Garrett served as a representative in New Jersey, then represented the state in the House from 2003 to 2015. He was defeated in 2016 in a tough race against former Clinton aide Josh Gottheimer.
Bachus served in the House of Representatives from 1993 until he retired in 2015 and formerly chaired the House Financial Services Committee from 2011 to 2013. Bachus voted in favor of the bank in 2012.
Confirmation by the Senate is not assured. Last year, Sen. Richard C. Shelby (R-Ala.), the then-chairman of the Senate Banking Committee, prevented Obama's nominees from reaching a vote on the floor. The current chairman, Sen. Mike Crapo (R-Idaho), could not immediately be reached for comment.