House Majority Leader Kevin McCarthy (Photo: Getty Images)
Following the stunning defeat of former House Majority Leader Eric Cantor (R-VA), the man who took his place gave clear indication that he was allied with conservatives on an important base — the Ex-Im Bank. Now, two of American’s most powerful free-market advocacy groups, the Club for Growth and Heritage Action For America, are holding him to it.
In a letter sent to House Majority Leader Kevin McCarthy (R-CA) on the Ex-Im Bank today, the groups reminded the House leader of his prior statements to Chris Wallace back in June of this year.
We were greatly encouraged by your comments on Fox News Sunday on June 22nd, in which you stated that the Export-Import Bank is ‘something government does not have to be involved in. The private sector can do it,'” the letter stated. “You also quite explicitly answered ‘yes’ to the question of whether or not you would allow the charter for the bank to expire.”
Since April, the Main Street versus Wall Street and K Street battle over the Export-Import Bank has been heating up. Conservatives have once again found themselves in a political fight with the Chamber of Commerce, a group that has spent millions pushing immigration reform to obtain cheap labor to benefit corporate America.
McCarthy, the former House whip, needed an issue to help bridge the divide between the Establishment and conservative wings of the Republican Party. He is run for the leadership position didn’t go unchallenged and, even though he defeated or scared off his more conservative challengers, his current position has not yet silenced familiar criticism.
“We’re going to be doing our damnedest to focus some minds,” Christopher Wenk, the senior director for international policy at the U.S. Chamber of Commerce said of the intense lobbying effort underway over the Ex-Im Bank.
The Chamber and the National Association of Manufacturers stepped up lobbying efforts early this year, as they almost dropped the ball and lost their favored interest group status the last time reauthorization came up. They have poured millions of dollars into the effort to save the bank.
“In the past several months, the bank and the private corporations it benefits have launched an all-out public relations campaign to repair the bank’s image,” the groups said. “This simply confirms what we have said all along – the Export-Import Bank is a crony-capitalist slush fund benefitting mainly politically-connected companies that receive its subsidies.”
Still, this year represents the best chance to date conservatives have to shut down what many see as a revolving door between members of Congress, K Street and Wall Street.
The Export-Import Bank, which was established in 1934 by Franklin D. Roosevelt, is supposedly in existence to “facilitate exports and imports and the exchange of commodities between the United States and other Nations.” But a past PPD investigation tells a very, very different story.
Even though the argument to keep the Ex-Im Bank in existence is filled with rhetoric focusing on U.S. jobs, in practice the money tends to benefit those who do not have the interest of the taxpayers in mind. Gennady Timchenko, one of Russia’s richest billionaire oligarchs and long-time friend of President Vladimir Putin, benefited from Boeing’s deal with the Ex-Im Bank. He sought a U.S. government-backed loan from the Ex-Im Bank to purchase 11 luxury Gulfstream jets for himself.
“To smooth the path for financial backing from the U.S. Export-Import Bank and allay possible U.S. government concerns about him, Timchenko hired lobbyists from powerhouse Washington law firm Patton Boggs, according to emails and documents viewed by Reuters,” the news agency reported back in July of 2013.
Ironically, Democrats, to include so-called populist Sen. Elizabeth Warren (D-MA), are standing in line to defend the money flowing to special interest groups from the taxpayer through the Ex-Im Bank.
At a recent House hearing on reauthorization of the Export-Import Bank, lawmakers were handed a friendly reminder in the form of index cards noting which companies in their districts receive funds from the bank and how many people are employed as a result of those projects. The lobbying trick came directly from lobbyists for corporations, including Defense Department cash-cows Boeing Co. (NYSE:BA) and General Electric Co. (NYSE:GE).
Senate Democrats plotted to pull a legislative maneuver to ensure big business supporters they would keep their favored status with Uncle Sam. Sen. Chuck Schumer (D-NY) crafted a plan to push the Senate to take up and pass a bill to reauthorize the bank before Congress left for the August recess, so conservative groups and their allied lawmakers in the House, including Financial Services Chairman Jeb Hensarling (R-TX), have not been without opposition.
“I think that if we can pass it in the Senate, particularly with a good bipartisan majority … it will put pressure on the House,” Schumer said of his plan in July on a conference call with reporters.
When McCarthy made his past statements, he didn’t seem as if pressure from Senate Democrats would weigh to heavy on his decision-making process, and was more forward than usual during his appearance on Fox News Sunday.
“One of the problems with government is they go and take hard earned money so others do things that the private sector can do,” McCarthy said in June. “That’s what the Ex-Im Bank does.”
It remains to be seen whether the majority leader’s words are coming back to haunt him.
“The Export-Import Bank is a small thing, this we know,” the letter said. “But Leader McCarthy, if you can’t start with the Export-Import Bank, then how can Americans trust the Republican Party to tackle the big challenges our nation faces after six years of President Obama and his failed policies?”
