Export-Import Bank critic Garrett might end up its chief
WASHINGTON — Less than two years ago, Scott Garrett, then a Republican congressman from New Jersey, took to the floor of the House of Representatives and laced into his colleagues for resurrecting an institution that “embodies the corruption of the free enterprise system.”
The institution he derided was the Export-Import Bank. He could soon be running it.
In April, President Donald Trump tapped Garrett, who lost his seat to a Democrat last November, to lead the bank, a federal agency that provides loan guarantees to U.S. companies selling to foreign customers. For years, it has been a political punching bag for conservatives who have called it a tool of corporate cronyism and a meddler in free markets. Trump assailed the bank while on the campaign trail.
Trump reversed himself last month, though, and decided to keep the bank alive, coming to the conclusion that it helps small businesses and allows U.S. exporters to compete more effectively around the world.
But the choice of Garrett was widely viewed as curious. As one of the bank’s most ardent conservative Republican critics, he had argued forcefully that it should be shuttered. As a critic of the organization that he has been asked to lead, Garrett fits the mold of the deconstructionists who Trump found appealing in forming his Cabinet, like Rick Perry at the Depart- ment of Energy and Scott Pruitt at the Environmental Protection Agency.
“I think he may have been ill served by the people that advocated for Scott Garrett for chairman,” said Fred Hochberg, the last chairman of the Export-Import Bank. “It’s an odd choice.”
Companies that rely on the bank and lawmakers who fought to save it are once again fretting about its future. “I think there is a legitimate concern about whether this nominee will fulfill the commitment we have to American workers to get the bank up and running,” said Sen. Heidi Heitkamp, D-N.D., who helped make the case to Trump that keeping the bank alive was aligned with his goals of promoting U.S. manufacturing. “You have to make sure you are not putting someone there who is a saboteur.”
Garrett did not respond to requests for comment, but a White House spokeswoman, Natalie Strom, said Trump was confident that he would be a “key voice for reform” at the bank. The Trump administration will direct Garrett to stop the bank from being a target of “special interests” and instead focus on supporting small businesses, she said.
Known in Washington as “Ex-Im,” the 83-year- old bank has been languishing for nearly two years. Since Congress renewed its lapsed authorization to operate in late 2015, the bank has done little business. Ex-Im authorized $5 billion in financing last year, the smallest amount in 40 years and a quarter of what it authorized in 2014, the last year it was fully operational.
H o c h b e r g , w h o w a s fiercely grilled by Garrett in congressional hearings, said that $30 billion in deals and 40 major projects were languishing in the pipeline as recently as January. The inaction has created a backlog of big deals that has left U.S. companies and their foreign customers in a lurch.
Backers of the bank contend that it is well suited to Trump’s “America First” philosophy. They point out that it promotes U.S. exports of all kinds, whether by providing loan guarantees to overseas airlines for the purchase of Boeing jets or helping General Electric and the Environmental Chemical Corp. build a drinking water facility in Cameroon.
Because other industrialized countries use similar tactics to promote their goods, proponents argue, Ex-Im keeps U.S. companies competitive. “We’re dealing with countries that have tre- mendous export machines,” said Deborah Wince-Smith, chief executive of the Council on Competitiveness business group. “The U.S. needs to have these instruments.”
Decades ago, Democrats were the most vocal opponents of the Export-Import Bank, branding it as corporate welfare. But in recent years Republicans and conservative groups took on that role in the name of limited government. During the presidential campaign, Republican candidates often called for closing the bank, listing it among top goals like repealing the Affordable Care Act and securing the border.
They cast the bank as a corrupt organization that helps foreign companies at the expense of U.S. firms.
While many conservatives share Garrett’s views of the bank, his Senate confirmation is far from a lock. A vote is expected this spring or summer, though no date has been set. Bipartisan support for the bank has led to worries about Garrett’s intentions.