(Bloomberg) -- Former Republican congressman Scott Garrett faces a tough return to the Capitol this week as President Donald Trump's choice to run the Export-Import Bank.
Garrett will testify before the Senate Banking Committee on Wednesday about why he's the best man for the job and he won't be facing a particularly friendly audience. Democrats are lined up in opposition, citing his past statements that the Ex-Im Bank should be shut down, while several key Republican lawmakers are so far withholding their support. Some of the nation's biggest corporations, meanwhile, are urging Trump to withdraw Garrett's name and nominate someone else.
In prepared testimony ahead of his hearing, Garrett pledged to keep the bank running if the Senate signs off on his nomination.
“Let me be crystal clear on this point: If I am confirmed, the Export-Import bank will continue to fully operate, point blank," Garrett said in his prepared remarks, obtained by Bloomberg News. “It will continue to approve the many loans that support our American manufacturers' ability to export their products."
Lawmaker Opposition
It's not clear whether Garrett will make it to the Senate floor for a vote. It took months for the ex-lawmaker to even get a hearing, as Trump nominated him in April. If just one Republican opposes Garrett on the banking panel, his nomination won't advance.
“Its going to be an important hearing," said Senator Tim Scott, a Republican from South Carolina, where companies that rely on the bank to help sell overseas, including Boeing Co. and General Electric Co., have major operations. “I'm going to pay close attention to what he says about the future of the Ex-Im bank and the need for reform and I will also look at what I think is his overall profile."
It's that “overall profile” that will be another challenge for Garrett. His relationships on Capitol Hill and with corporate America have been strained since he allegedly made anti-gay remarks that prompted some corporate donors to pull their support during his 2016 campaign. He ultimately lost his re-election bid to the northern New Jersey district that he'd represented since 2003.
Garrett will also have to walk a fine line between conflicting views over the Ex-Im Bank that have divided Republicans for years.
Megacorporation Welfare
In the U.S. House, Garrett was a founding member of the Tea Party-aligned Freedom Caucus and twice voted against legislation reauthorizing the Ex-Im Bank. During one debate in 2015, he called it “taxpayer funded welfare for megacorporations” and “a bank that embodies the corruption of the free enterprise system.” His negative view of the Ex-Im Bank is shared by at least two senators on the banking panel, Pat Toomey of Pennsylvania and Richard Shelby of Alabama.
On the other side are traditional pro-business Republicans and the industries that support them. The key swing votes on the committee -- Scott, Thom Tillis of North Carolina, and Mike Rounds of South Dakota -- all have a major manufacturing presence in their states and while they're in favor of some reforms, they have been generally supportive of keeping the Ex-Im Bank in business.
The White House is just as conflicted. During his presidential campaign, Trump slammed the bank as “featherbedding” for lawmakers and corporations and questioned whether it was necessary. But that changed once he took office and started hearing from manufacturers, including Boeing and GE. He's made nominations to fill out the bank's board, with only Garrett generating intense opposition from business groups.
In his prepared testimony Garrett reiterated that he supports the Trump administration's agenda to have a "fully functioning bank." He said that he wants the Ex-Im Bank to operate in a "fair, open and transparent manner," though he declined to offer specifics about what he might do to reform it. It's not clear whether it will be enough to sway some of the skeptics on the Senate Banking Committee.
‘Fully Operational'
The White House has been working with lawmakers “on written reassurances that Mr. Garrett will execute the president's policy to have the Ex-Im Bank fully-operational,” deputy press secretary Lindsay Walters said in an email.
“I've expressed my reservations,” Rounds said of Garrett. “We'll provide an opportunity for him to, in front of the committee, share his thoughts on specific items that we've already asked him for information on.”
Garrett will testify alongside five other officials for the bank, including Spencer Bachus, also a former GOP congressman, Kimberly Reed, a former Treasury adviser, and Claudia Slacik, a former banker who was previously nominated by President Barack Obama. The Senate Banking Committee will hear their testimony, and if they approve, will send the nominees on to the full Senate for a vote.
The Ex-Im Bank, created during the Great Depression, helps foreign companies buy U.S. products when private banks won't provide financing. Some of the agency's biggest beneficiaries include manufacturing and aerospace companies such as Boeing and GE, as well as big banks, like JPMorgan Chase & Co., that help finance deals.
Republican objections to the bank have left Ex-Im without a full board of directors for three years, which means it can't approve transactions more than $10 million. As leader, Garrett would have the power to indirectly approve or block deals and have a say in determining the bank's agenda. In 2014, its last fully operational year, the bank backed $27.5 billion in exports and sent $674 million in profits to the U.S. Treasury.
Company Objections
Lobbyists for big companies have been working to torpedo Garrett's nomination for months, ramping up their efforts in recent weeks. Both the U.S. Chamber of Commerce and National Association of Manufactures have petitioned lawmakers to reject Garrett, sending letters to key members of Congress and running ads in their districts calling him "a terrible deal" for industry. They say there's not much Garrett can do at his hearing to change their mind.
“This is kind of a typical Washington swamp thing, where you've got somebody who wants a job who's willing to say anything,” said Jay Timmons, president of NAM.
But there are also powerful advocacy groups like the Heritage Action that support Garrett because they think he'll be able to crack down on what they see is "waste, fraud and abuse" at the bank.
So between the reformers who want to see Garrett take the helm and the lawmakers on both sides of the aisle who just want to see the bank fully functional again, Garrett may have a shot.
“I mean, we have to compete globally," said Tillis, who also remains undecided on the nominees. “If we take that off the table, I think we unilaterally disarm.”
To contact the reporters on this story: Elizabeth Dexheimer in Washington at edexheimer@bloomberg.net, Arit John in Washington at ajohn34@bloomberg.net.
To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Joe Sobczyk at jsobczyk@bloomberg.net, Gregory Mott
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