Washington’s ‘corporate cronyism’ takes hit from rising Texas lawmaker

Rep. Jeb Hensarling (R-Texas) on Tuesday issued a rallying cry for House Republicans to kill the Export-Import Bank, calling the federal lending agency a “poster child” for corporate cronyism and a “defining issue” for the GOP.

The chairman of the House Financial Services Committee used a policy speech at the Heritage Foundation to make a forceful argument against the bank, a little-known entity that has long enjoyed bipartisan support in Congress and backing from the business community.

{mosads}Hensarling’s committee has jurisdiction over the bank’s charter, which will expire at the end of September if Congress doesn’t act.

“Its demise would clearly be one of the few achievable victories for the Main Street competitive economy left in this Congress,” Hensarling said in his nearly 40-minute address. “I believe it is a defining issue for our party and a defining issue for our movement.”

The conservative Texan devoted the bulk of his speech to the Ex-Im Bank, portraying the battle as central to his broader vision of a Republican Party that will abandon what he called the “Washington insider economy” in favor of the “Main Street competitive economy.”

A former chairman of both the Republican Study Committee and the full Republican conference, Hensarling has been mentioned as a possible challenger to Speaker John Boehner (R-Ohio) or Majority Leader Eric Cantor (R-Va.) after the November midterm elections.

Asked after the speech whether he was considering a run for Speaker, Hensarling stuck to a response he has given multiple times in recent weeks: He’s not thinking about it, but he’s not ruling it out.

“It’s not something I aspire to. It’s not something I’m thinking about. It’s not something I’m working on,” he said. “I see no reason whatsoever why it is in the interest of the Republican Party or the conservative movement to really be thinking about leadership races.

“No, I haven’t been Shermanesque. Again, I’m not sure there’s any opportunity I want to foreclose,” Hensarling continued. He added that he would be happy “to no end” to continue as chairman of the Financial Services Committee in the next Congress.

While he made no mention of a leadership bid in his prepared remarks, he suggested the Republican majority in the House had not been aggressive enough in pursuing conservative proposals to rewrite the tax code, wind down Fannie Mae and Freddie Mac, and eliminate federal farm subsidies.

“This is a call to action for Republicans and conservatives today to reject the Washington insider economy,” Hensarling said. “Let the Democrats embrace it. Let’s embrace the Main Street competitive economy — its fairness, its empowerment, its morality. And when we do, America’s future will be one of unparalleled freedom, opportunity and growth.”

On tax reform, Republicans have talked for years about a comprehensive overhaul, but a plan released earlier this year by Rep. Dave Camp (R-Mich.), chairman of the Ways and Means Committee, is unlikely to receive a vote.

Talking about reform is not enough, Hensarling said.

“It’s time for action,” he said, without mentioning Camp’s specific proposal. “Let’s turn Americans’ frustration and resentment with our unfair tax code into a groundswell for fundamental tax reform.

“Today, I call upon every Republican in Congress to agree to scrap the code. We may have to tell some people on K Street, ‘No,’ so we can tell every American, ‘Yes.’ Be it Fair Tax or Flat Tax, let’s not just say we’re for fundamental tax reform — let’s actually vote on it.”

Hensarling also called on Republicans to back his own PATH Act proposal to end the federal mortgage giants, which passed through his committee but has yet to receive a vote on the House floor.

But the heart of his address centered on Ex-Im, and he made clear that he would use his power as Financial Services chairman not to reauthorize the bank with changes — as some Republicans have advocated — but to end it entirely.

The bank provides loan guarantees to help U.S. businesses reach markets overseas, and supporters argue it has helped support job creation while turning a profit for the government. But Hensarling characterized it as a symbol of a corporate welfare system that was “enshrining America as a bailout nation.”

He argued that the bank turned a profit only due to accounting gimmicks and said the majority of the bank’s funding goes to large companies like Boeing that don’t need help from taxpayers.

The debate over the bank, Hensarling said, was central to the broader battle within the GOP over a continued allegiance to big business interests versus policies that truly boosted free enterprise and benefits people without powerful lobbyists in Washington.

“The reauthorization debate clearly goes to the heart of the question: Which economy do we believe in?” Hensarling said. “The answer to that question lies collectively in the hands of our movement and our party.

It is our opportunity and imperative to reform the corporate welfare state. It is right. It is necessary. For then, and only then, will we have the moral authority and the people’s trust to reform the social welfare state.”

Ex-Im spokesman Matt Bevens defended the bank in a statement responding to the speech.

“In a fiercely competitive global economy, Ex-Im Bank empowers American businesses to tackle new markets, grow through exports, and create new U.S. jobs,” he said. “Last year, Ex-Im Bank approved the largest number of small-business authorizations in its 80-year history, while supporting approximately 205,000 American jobs and generating a $1 billion profit for taxpayers. ‘Made in America’ is still the best in the world, which is why Ex-Im Bank strives to level the playing field for American companies and workers — that’s the winner we pick every time.”

Hensarling’s Democratic counterpart on the Financial Services Committee, Rep. Maxine Waters (Calif.), also issued a rebuttal, saying she was “disappointed but not surprised” at his disparagement of the bank.

Waters said Hensarling was dismissive of small-business owners who relied on the bank to grow their companies and create jobs.

“None of these people are so-called ‘crony capitalists,’ ” she said. “They are hardworking small-business owners that form the backbone of our economy. They are Americans.”

Updated at 8 p.m.