Policy: Economy

Welcome to Dave Brat's America: Majority Leader-elect Kevin McCarthy says Kill the Export-Import Bank

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Beltway Confidential,Opinion,Timothy P. Carney,Economy,Kevin McCarthy,Corporate Welfare,Cronyism,Export Import Bank,Dave Brat

House Majority Leader-elect Kevin McCarthy says Congress should let the Export-Import Bank expire, the biggest blow yet to the imperiled subsidy agency whose charter expires this fall.

On "Fox News Sunday," host Chris Wallace asked McCarthy if he agrees with "conservatives who say that the Export-Import Bank is a form of crony capitalism and it should be put out of business -- allowed to expire."

McCarthy responded by tying Ex-Im to "one of the biggest problems with government," using taxpayers' "hard-earned money," to do things the private sector can do. McCarthy supported Ex-Im's reauthorization in 2012, but he argued on Fox News Sunday that this was a vote to "wind down the Ex-Im Bank."

Wallace put the question more directly: "You would allow the Ex-Im Bank to expire in September?"

McCarthy immediately said "Yes. Because it's something that the private sector can be able to do."

McCarthy's statement on national television is the clearest sign yet that the subsidy agency could die this year -- and that in the wake of Eric Cantor's primary loss, the Republican leadership is getting serious about battling corporate welfare and crony capitalism.

Ex-Im already has a powerful foe in House Financial Services Committee Chairman Jeb Hensarling. Ex-Im's greatest ally in the past had been Majority Leader Eric Cantor, who in 2012 cut a deal with the administration and moved the bill to the floor, where it passed with near-unanimous Democratic support and majority Republican support. Ex-Im opponents had suspected that Cantor might circumvent Hensarling's committee, and bring an Ex-Im bill to the floor again this year.

But then Dave Brat defeated Cantor in the Republican primary in Virginia's 7th Congressional District, largely by attacking crony capitalism and corporate welfare. McCarthy, a Cantor protege, easily won last week's election to be majority leader. McCarthy is considered part of the pro-business wing of the GOP that is arrayed against the party's more free-market Tea Party wing.

His announcement today shows a clear shift within the Republican Party against corporate welfare.

If McCarthy refuses to bring an Ex-Im renewal to the floor, the agency would expire, regardless of the actions of the Senate and the White House, both controlled by Democrats.

Tomorrow afternoon, the Chamber of Commerce and the National Association of Manufacturers -- two powerful industry lobbies that traditionally have sway over the GOP -- have a joint conference call in support of Ex-Im. Wednesday, Hensarling's Financial Services Committee holds an Ex-Im hearing.

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