Conservatives were perplexed to learn this week that President Trump had suddenly signaled his support for the Export-Import Bank, an obscure government agency that free-market groups have long cast as Exhibit A for corporate welfare and that candidate Trump had once targeted for extinction.
The shift is part of a broader pattern of reversals by Trump in recent weeks.
Trump’s Ex-Im pivot came in an interview with the Wall Street Journal, in which he casually articulated two other prominent reversals: China is no longer manipulating its currency to gain a trade advantage and Federal Reserve Chief Janet Yellen may not be “toast.” On the day the interview was released, he also told reporters that NATO is “no longer obsolete.” It was a steep departure from a position he had held as recently as January.
But conservatives were particularly incensed by the president’s 180 on the Export-Import Bank. The federally authorized institution has been fiercely criticized by leading political figures in several battleground states that Trump carried last November and is widely seen as a paragon of the crony capitalism he vowed to stop.
“There is no evidence to suggest the Export-Import Bank plays any role in domestic job creation,” said Dan Holler, communications director for Heritage Action, a group that has worked closely with the White House on domestic issues like healthcare reform. “Instead, it frequently subsidizes big banks and overseas competitors [and] only 20 percent of the bank’s financing goes to support the activities of small businesses.”
Holler said Trump would be wise to spend his time “pursuing policies that will actually help make America great again.”
The White House first hinted at the reversal on Ex-Im following a meeting between Trump and two Democratic senators in early February.
“There are multiple options on the table,” White House deputy press secretary Lindsay Walters told reporters after Sens. Heidi Heitkamp, D-N.D., and Joe Manchin, D-W.Va., claimed that Trump had told them he changed his position “once I understood the disadvantage we were at in competing globally and what [Ex-Im] means to the jobs here in America.”
Conservative lawmakers nabbed a short-term victory in 2015 when Congress left for recess without voting to reauthorize Ex-Im, forcing the 82-year-old agency into a five-month lapse. The bank ostensibly exists to provide financing for U.S. companies that wish to sell their products overseas but lack the private funding to be able to do so. Critics say it uses taxpayer money to subsidize loans for high-risk borrowers.
“The bank is systemically corrupt,” said Andrew Roth, vice president of government affairs at the conservative Club for Growth.
Roth spoke to the Washington Examiner at the conclusion of Thursday’s White House briefing, during which press secretary Sean Spicer had thrice struggled to explain the reasoning behind Trump’s shift Ex-Im.
“Let met get back to you on the Ex-Im Bank specifically. It’s a very complex issue,” Spicer finally told reporters.
The policy reversal could cost Trump support among his conservative base if he fails to pursue meaningful reforms to the Export-Import Bank, Roth said.
“For Trump to succeed on policy and politically, he needs to continue to generate enthusiasm among the people that sent him to the White House. And even though Ex-Im Bank is a tiny agent, because Trump promised to drain the swamp and the bank is the poster child for cronyism and all things bad in Washington, D.C., he needs to follow through on his original promise.”
Roth continued, “His credibility is at stake if he continues to back away from the promises he made, so he cannot afford to turn this into a long-term habit.”
Some conservatives are waiting to see the kind of Export-Import Bank reform legislation Trump pursues before totally abandoning the president.
“Office of Management and Budget Director [Mick] Mulvaney suggested that there will be efforts to eliminate mission creep within the bank by nominating new board members who will maintain the original mission of the Ex-Im Bank,” Wayne Brough, chief economist at FreedomWorks, told the Washington Examiner.
“But if the overall mission has not changed, the underlying cronyism will still drive the agenda,” he added.
Trump nominated former Reps. Scott Garrett, R-N.J., and Spencer Baucus, R-Ala., for president and board member of the Ex-Im on Friday. Garrett was an Ex-Im critic while in Congress.
