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A Republican congressman bashing “crony capitalism” and “corporate welfare” is no longer a new thing. A Republican congressman actually trying to do something about corporate welfare, however, is nearly unprecedented.
So it’s a sign that the GOP could go in a new direction when the Republican chairman of the House Financial Services Committee sets out to derail some of Wall Street’s favorite federal gravy trains and “reform the corporate welfare state.”
Texas Republican Jeb Hensarling, who chairs the House banking panel, gave a call to arms at the conservative Heritage Foundation on Tuesday afternoon, imploring his colleagues to “reject the Washington insider economy and embrace the Main Street competitive economy.”
“Business’s interests are not necessarily freedom’s interests,” said Hensarling, who laid out an anti-corporate welfare agenda in a talk that borrowed its title from Ronald Reagan: “A Time for Choosing.”
Hensarling called for reform of the “Byzantine” tax code, telling his fellow Republicans, “We may have to tell some people on K Street ‘No’.”
“Let the next farm bill be the last farm bill,” he declared. He singled out the government’s protection of the sugar industry, lamenting that every apple-pie baked in the U.S. is baked with “Soviet-style sugar.”
Hensarling also called on Republicans to continue the ban on earmarks, and to kill the government-sponsored enterprises, Fannie Mae and Freddie Mac, that are so beloved by the U.S. banks they fund.
Mostly, Hensarling went after the Export-Import Bank of the United States. Ex-Im is a federal agency that finances U.S. exports by giving taxpayer-backed financing to foreign governments and companies so they can buy U.S. goods. This subsidizes exporters, their foreign customers and the banks who get loan guarantees.
Ex-Im’s charter expires this fall. Hensarling’s committee controls its reauthorization. Many Republicans want to quietly reauthorize Ex-Im. Hensarling said he wanted an election-year fight over the agency, which he calls “a boutique export-credit agency for some of the largest and deepest-pocketed corporations.”
“Today, I call on every Republican in Congress to simply let Ex-Im expire,” he said Tuesday, “to let the American taxpayer exit Ex-Im.”
Hensarling spent 15 minutes of his 35-minute talk on Ex-Im, and he called the reauthorization fight “a defining issue for our party, and a defining issue of our movement.”
Why is an obscure agency the defining fight? Hensarling pointed to the symbolism of it: “I do not know of better poster child of the Washington insider economy and corporate welfare than the Export-Import Bank. Its demise would clearly be one of the few achievable victories for the Main Street competitive economy left in this Congress.”
Killing Ex-Im is achievable because Republicans don’t need to pass anything to win the fight: If the House does not pass the bill, Ex-Im dies on Oct. 1.
Hensarling recited the defenses of Ex-Im and shot them down.
Ex-Im creates jobs? It creates jobs for the subsidized companies, but it does so by shifting capital around the economy, hurting some companies to help others.
Ex-Im is profitable? Only through accounting gimmicks.
Ex-Im is needed to battle its foreign counterparts? Most Ex-Im financing doesn’t counter foreign subsidies.
Hensarling’s declaration of war against corporate welfare and Ex-Im could be far more consequential than similar conservative critiques.
First, Hensarling holds the gavel. A GOP Financial Services chairman is supposed to be the banks’ best friend. Hensarling, though, is fighting the banks on Ex-Im and Fannie Mae. Most conservative members drop their free-enterprise talk when they get a gavel—not Hensarling.
Also, Hensarling has openly called out some of corporate America’s giants. Like all Republicans, he dedicated most of his fire Tuesday at the late Solyndra, but he also called out Boeing, Ford and General Electric as three of Ex-Im’s biggest beneficiaries.
Finally, Hensarling’s crusade comes in the midst of a simmering GOP leadership battle. House Speaker John Boehner could give up his speakership after the 2014 elections. Next in line would be Majority Leader Eric Cantor. Hensarling is obviously considering a run for Speaker if Boehner steps down–he gave a rambling, unconvincing semi-denial when asked about his Speaker ambitions Tuesday.
Corporate welfare provides the clearest contrast between Cantor and Hensarling. Cantor supported the 2008 bailout, while Hensarling, as chairman of the conservative Republican Study Committee, led the opposition. Cantor in 2012 cut the deal to reauthorize Ex-Im, while Hensarling opposed it.
Republican lawmakers often face a choice between free enterprise and the business lobby. Hensarling is imploring Republicans to make the harder choice.
Timothy P. Carney, a senior political columnist for the Washington Examiner, can be contacted at [email protected] This column is reprinted with permission from washingtonexaminer.com.
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