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Published: Sun, April 16, 2017
Economy | By Melissa Porter

Trump's bank nominee once voted to let it die

Trump's bank nominee once voted to let it die

President Donald Trump said Friday he would nominate former congressman Scott Garrett, who has supported closing the U.S. Export-Import Bank, to head the credit agency.

Trump himself was a critic of the Ex-Im Bank, which is the federal government's export credit agency and has been labeled a form of "corporate welfare" by some conservatives.

He retired from Congress in 2015.

"Yikes", said Sen. Claire McCaskill (D-MO) about the news of Garrett's selection.

Trump also said Friday he would nominate Spencer Bachus, a former Republican congressman from Alabama who chaired the House Financial Services Committee, to the Ex-Im Bank board. CEO Dennis Muilenburg met with the president and explained the importance of the Export-Import Bank of the United States, which allows overseas customers to receive government-backed loans in order to purchase US goods. Both nominees require Congressional confirmation.

But this week Trump announced he'd changed his mind, telling The Wall Street Journal in an interview that he now supports it. "When other countries give it, we lose a tremendous amount of business".

Trump's backing of the bank represents a victory for manufacturers like Boeing and General Electric Co, which have overseas customers that use the agency's government-backed loans to purchase their products.

While most proponents of limited government were dismayed by Trump's decision to renege on his campaign promise to abolish the Ex-Im Bank, Garrett's appointment may well be the next best alternative.

Bachus would be a member of the Ex-Im Bank's Board of Directors.

In fiscal 2014, the bank's last fully operational year, it backed $27.5 billion in exports - somewhat less than 2 percent of the USA total.

The bank has been hobbled in recent years without enough board members to produce a quorum, blocking it from approving transactions exceeding $10 million.

"Instinctively, you would say, 'Isn't that a ridiculous thing, ' " the president told The Wall Street Journal. "But actually, it's a very good thing".

The bank said it sends any surplus from the interest and fees it assesses back to the Treasury, resulting in a $5.6 billion profit for taxpayers since fiscal 2007. "And it actually makes money, it could make a lot of money".

How Garrett might alter the bank's operations to win support from conservative Republicans remains to be seen. Conservative groups including Heritage Action and Americans for Prosperity oppose the bank for similar reasons. In 2014, the a year ago that the Ex-Im Bank was fully operational, financing topped $20 billion and profits totaled $675 million.

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