On Friday afternoon, the White House announced that Donald Trump would nominate former Rep. Scott Garrett (R-NJ) to be president of the Export-Import Bank, which he tried to kill two years ago. Garrett called the government bank, whose mission is to boost American exports, a “corporate welfare program.”
— Scott Garrett (@RepGarrett) October 27, 2015
Garrett, a founding member of the archconservative House Freedom Caucus, said the bank “embodies the corruption of the free enterprise system.”
It’s another example of the White House selecting people to run agencies they have worked to kill, or at least of which they have voiced serious skepticism. Rick Perry wanted to abolish the Energy Department, and now runs it. Scott Pruitt, a longtime EPA critic who now runs the agency, says those who want to kill it are “justified.” Betsy DeVos spent much of her career trying to defund public education and is now Education Secretary. Tom Price has fought to repeal the Affordable Care Act and women’s health programs and is now Health and Human Services Secretary. Housing and Urban Development Secretary Ben Carson voiced skepticism about the Fair Housing Act.
“I don’t find this nomination shocking,” Rep. Bill Pascrell, (D-NJ) told USA Today. “They’re put there to minimize the government. Is he in support of the agency he [said he] would want to dismantle? I’ll take him in good faith, but I can’t see him making a turnaround from his statement.”
The Ex-Im Bank, as it is known, is an Executive Branch agency — a corporation owned by the federal government, and staffed by finance professionals. It provides credit to American businesses, allowing them funds needed to operate, so they can hire American workers and export goods. It also provides loan guarantees to foreign businesses who then buy American products.
Most Ex-Im Bank loans go to U.S. small businesses, most credit goes to large U.S. corporations, and the Treasury Department actually turns a profit on the bank’s operations. It was created in 1934, and unlike some other government agencies has not slowed financing carbon-heavy, environmentally unfriendly projects around the world. The reforms Garrett would espouse are not likely to make the bank more climate-friendly, as he is a climate denier.
Some conservatives see the bank as a disruption of the free market, and groups like the Club for Growth and the Heritage Foundation made it a priority to block the bank’s reauthorization in 2014. Garrett voted against reauthorization twice, and worked with his colleagues on the House Financial Services Committee to rein in the bank — its charter lapsed for five months in 2015. The agency lacks a quorum due to Senate GOP refusal to fill empty board seats, and has not been able to approve financing deals larger than $10 million in two years.
Trump, who called the Ex-Im Bank “excess baggage” during the campaign, reversed course this week (as he did on labeling China a currency manipulator, and the the strength of the U.S. dollar) in an interview with the Wall Street Journal:
I was very much opposed to Ex-Im Bank, because I said what do we need that for IBM and General Electric. It turns out that, first of all, lots of small companies will really be helped, the vendor companies. But also maybe more importantly, other countries give it, and…we lose a tremendous amount of business.
Trump also pointed to the bank’s positive financial impact: “It’s a very good thing, and it actually makes money,” he said. “You know, it actually could make a lot of money.”
Garrett, who helped form the House Freedom Caucus and has been a Tea Party member and conservative gadfly in the House GOP for years, has opposed both the Voting Rights Act and emergency funding for Hurricane Sandy, which devastated so much of New Jersey. He wanted to privatize Social Security in 2010. In 2013 he was one of nine Republicans who voted against the reauthorization of any version of the Violence Against Women Act. He said in 2011 that “other ethnicities” are not as straightforward as Midwesterners.
In 2015, Garrett annoyed party leaders when he refused to contribute the fundraising cash all members pay to the House GOP campaign arm, the National Republican Congressional Committee, because it had supported openly gay GOP nominees in a few races around the country. This caused corporate and financial donors to pull their monetary support from Garrett, who was a subcommittee chair on the House Financial Services Committee, which oversees Wall Street. Garrett lost his seat, which he had held for 14 years, in 2016 to Rep. Josh Gottheimer (D-NJ).
Trump also announced his intention to name former House Financial Services Committee Chairman Spencer Bachus (R-AL) to the bank’s board of directors. Though Bachus supported the bank’s reauthorization while in Congress, he has advocated the subservience of the federal government to the financial sector. He said in 2010: “in Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.”