In what appears to be an olive branch to conservatives in Congress, newly elected House Majority Leader Kevin McCarthy said Sunday that he is in favor of letting the US Export-Import Bank die in September when its current authorization expires in September.
Incoming House Majority Leader Kevin McCarthy said on Sunday he wouldn’t support reauthorizing the charter of the Export-Import Bank of the United States, placing in doubt the future of a major agency that facilitates U.S. exports.
His remarks deepen a GOP rift over the bank and could aggravate House Republicans’ relationship with business leaders, who say the bank is vital to boosting U.S. trade.
Conservative lawmakers have pushed for winding it down, and House leaders have signaled sensitivity to their agenda after a tea party-aligned upstart defeated outgoing Majority Leader Eric Cantor this month.
The Ex-Im Bank is a truly bad idea and it is time to end it. It represents the worst impulses of the crony capitalism that has gripped a GOP lusting for Chamber of Commerce dollars. Though its boosters trot out all kinds of feel-good stories about Mom-and-Pop operations finding overseas markets due to the Ex-Im bank and tout the fact that 90% of all loans are to small businesses, that is merely spin. Three companies, Boeing, KBR, and General Electric, receive 72% of all loan guarantees; the top 10 recipients get 93%. (see Jeb Hensarling tackles the Ex-Im Bank and crony capitalism). In addition, the Ex-Im Bank has signed huge agreements with Vladimir Putin’s Russia and may have provided support to Mexican drug cartels.
Naturally, the moneyed interest who seem to think they own the GOP are up in arms:
Supporters of the Ex-Im Bank say failure to renew its charter would put U.S. companies at a disadvantage because other countries have agencies offering similar support. The U.S. Chamber of Commerce, the National Association of Manufacturers and a number of corporations were planning this week to launch a public-relations push to support reauthorization.
“This is an all-hands-on-deck effort right now because we are really at a very critical time given the bank’s charter expires at the end of September,” said Christopher Wenk, senior director of international policy at the U.S. Chamber of Commerce.
If this actually comes to pass it is a significant event. The Ex Im Bank has a lot of supporters in Congress. If it is actually allowed to go out of business it will be much easier to kill other forms of corporate cronyism and welfare in the future once people see the universe doesn’t implode if Congress puts an agency down.
I don’t think this heralds the birth of Kevin-McCarthy-as-conservative-warrior. I think McCarthy is doing this out of enlightened self-interest. He knows that he will be up for re-election when the new Congress convenes in January. There is a good chance that Congress will be more conservative than the current one. On the whole, McCarthy would prefer to run unopposed rather than face a Jeb Hensarling or other strong conservative. He also needs support from the conservative caucus in order to be an effective majority leader and giving them this shows that he does not see Cantor’s loss as a fluke but recognizes them as a power center.