Following President Donald Trump’s decision to nominate two former congressmen to key posts with the Export-Import Bank, conservatives are looking now to a new era of reforms that may take place within the agency with new leadership.
But while some are hoping to see changes take place within the 84-year-old agency, there are concerns that a reversal in Trump’s position on Ex-Im could dampen efforts to shutter the bank.
The president will nominate former Rep. Scott Garrett, a Republican from New Jersey, to a four-year term as Ex-Im’s president, and former Rep. Spencer Bachus, a Republican from Alabama, to the bank’s board of directors.
Both nominations require Senate confirmation.
Financial Services Committee Chairman Jeb Hensarling, one of the most vocal opponents of Ex-Im, said he believes Garrett and Bachus would “steer the institution towards reform.”
“Having worked with both of these gentlemen so closely on the Financial Services Committee, I am hopeful they will safeguard taxpayer dollars and put an end to the bank’s well-documented management failures,” Hensarling, R-Texas, said in a statement. “With Ex-Im so captured by special interests, the president was right to choose principled leaders like these to safeguard the agency against further mission creep, fraud, waste, and abuse.”
Having chaired the House Financial Services Committee from 2011 to 2013, Bachus’ selection for Ex-Im’s board of directors is a traditional pick for Trump.
But it’s Garrett’s nomination to lead the controversial agency, which has been in conservatives’ crosshairs for the last five years, that is raising eyebrows.
Garrett is a founding member of the House Freedom Caucus, a group of hard-line conservatives in the lower chamber, and the former New Jersey congressman has fiercely opposed the agency he’s now been tapped to oversee, having voted against its reauthorization twice.
During a floor speech in October 2015, Garrett criticized Ex-Im as an agency “that embodies the corruption of the free enterprise system.”
“The Export-Import Bank transformed the role of government from a disinterested referee in the economy into a biased actor that uses your taxpayer dollars to tilt the scales in favor of its friends,” he said at the time, “and it mocks the American dream by making victims of the startups that dare to compete.”
Ex-Im provides taxpayer-backed loans and loan guarantees to foreign countries and companies for the purchase of U.S. products.
If confirmed, Garrett could usher in a series of reforms at the bank, particularly given his past opposition to Ex-Im.
But in Bachus, the bank has a supporter.
Many conservatives who oppose the bank hoped that a Trump presidency would mean the end of the agency.
During an interview on the campaign trail in 2015, then candidate-Trump called Ex-Im “feather bedding” for some politicians and companies.
But in an interview with The Wall Street Journal last week, the president reversed his stance and said the bank is a “very good thing.”
“It turns out that, first of all, lots of small companies are really helped, the vendor companies,” Trump said. “But also, maybe more important, other countries give [assistance]. When other countries give it we lose a tremendous amount of business.”
His about-face and his move to fill these two positions at the bank have some Ex-Im opponents concerned.
“This just confirms my worst fears,” Veronique de Rugy, a senior fellow at the Mercatus Center at George Mason University, told The Daily Signal, “which is that President Trump will just listen to the business interests more than he will listen to the free market advocates, and that’s disconcerting.”
“The problem is there’s nothing you can do to make the bank acceptable,” she continued.
For the last five years, Hensarling and other conservatives have been working to kill the bank.
Ex-Im opponents believe the bank is an engine of cronyism and corporate welfare, and say that the bank’s financing benefits a small handful of large corporations, such as Boeing, General Electric, and Caterpillar.
Conservatives succeeded in their efforts to close Ex-Im’s doors in 2015, when the bank’s charter lapsed for the first time in its history.
But the agency was ultimately reauthorized in December 2015.
Since then, it’s been crippled in its ability to approve high-dollar transactions because of vacant seats on its board of directors.
The bank’s charter requires the board to have a quorum, or three of its five members, to approve deals worth more than $10 million.
Just two of those five seats are currently filled, despite President Barack Obama sending the Senate nominations to the board late in his term.
Those nominations were held up by former Senate Banking Committee Chairman Richard Shelby, R-Ala., who opposed Ex-Im.