Until conservatives undo a system that grants favors to well-connected business interests, they will lack the “moral authority” to reform a social welfare state that traps too many Americans in poverty and dependence, Rep. Jeb Hensarling (R-Texas) said this afternoon in a speech he bluntly acknowledged as “a call to action.”
In a half-hour address at The Heritage Foundation called “A Time for Choosing,” Hensarling described the need to decide between a “Main Street economy” that thrives on competition among hardworking Americans and a “Washington insider economy” where corruption and cronyism determine winners and losers.
“The Main Street competitive economy relies upon hard work, creativity, perseverance and ‘can do’ optimism to create wealth,” Hensarling said. “The Washington insider economy, in contrast, relies on earmarks, regulatory barriers to entry, subsidies, tax preferences, and political influence.”
Although he cited half a dozen examples of Washington-engineered unfair play in the economy, the chairman of the House Financial Services Committee spent about a third of his remarks making a case for doing away with the U.S. Export-Import Bank. Unless Congress reauthorizes it, the federal charter of the 80-year-old “Ex-Im Bank” will expire Sept. 30.
Most taxpayers would be surprised to learn that this government-run bank takes their hard-earned money and lends it out to China and Russia – nations that openly challenge our economic and security interests. It also lends their money to oil-rich countries like Saudi Arabia and the United Arab Emirates. It even lends taxpayer money to the likes of Congo, which has a demonstrated history of human rights abuses. I doubt most taxpayers believe this is either wise or fair. …
The real beneficiaries – the true face of Ex-Im – are multi-billion dollar corporations like GE, Ford and, of course, Boeing. That’s because more than 60 percent of Ex-Im’s financing benefited just 10 big corporations last year. …
These multi-billion dollar companies would do just fine without the Ex-Im Bank’s corporate welfare.
Before focusing on the Ex-Im Bank, Hensarling assailed other examples of what he called unfairness in the “insider” economy:
- The tax code, which is used to pick winners and losers by doling out special privileges and preferential treatment. “We need a groundswell for fundamental tax reform,” he said.
- Business subsidies, which the Washington establishment “pretends” amounts to little but – as Heritage’s chief economist, Stephen Moore, has noted — is more in the range of an “indefensible” $20 billion in direct income transfers. That’s about $200 million for each Fortune 100 company.
- The farm program, actually a tangle of subsidies, quotas and other benefits – mostly for commercial farmers whose median household income tops $205,000. “The fair way to help family farmers is to strengthen private property rights, expand trade opportunities, kill the death tax and rein in the EPA,” he said.
- Earmarks in the tens of billions of dollars for politicians’ pet projects, a budget game that could return absent “eternal vigilance,” he said. “I call on all Republicans in Congress to leave the earmark ban in place.”
- Bailouts for automakers and Wall Street firms, a practice that favors those deemed “too big to fail” over those considered “too small to matter,” he said. “In America, if we lose our ability to fail, we’ll soon lose our ability to succeed.”
- Bailouts for Fannie Mae and Freddie Mac, the once-unimpeachable housing finance entities “at the epicenter” of the financial crisis. “It’s time for the Republican Party to live up to its pledge to end Fannie Mae and Freddie Mac and end their nearly $200 billion bailout, which is exactly what the PATH Act does,” Hensarling said, referring to his bill.
The Texas Republican then devoted more than 35 paragraphs and 1,600 words to demystifying the Export-Import Bank, expected to be the subject of one or more hearings before his committee as expiration of its charter nears:
I have no doubt that an overwhelming number of Democrats will support reauthorization of the Export-Import Bank. They want to allocate credit in our economy as part of a political process. Democrats are always happy to subsidize corporate America as long as they can also regulate and control it.
Let them stand up for the Washington insider economy. But not us. Let us proudly stand for fairness. Let us proudly stand for the Main Street competitive economy. Today I call upon every Republican in Congress to let Ex-Im expire. Let the American taxpayers exit Ex-Im once and for all.
The smart and fair way to help American exports is with a conservative agenda: fundamental tax reform; strong free trade agreements; a freeze on most regulations; and greater American energy independence with projects like the Keystone pipeline.
Hensarling said ordinary Americans are discouraged and fed up with crony capitalism because it violates their sense of fair play:
Americans in the Main Street economy aren’t looking for or expecting a government bailout. They’re not looking for a subsidy, earmark, tax preference or legislated advantage. No, the good folks of the Main Street competitive economy simply want their success to depend on how hard they work in their hometowns, not who they know in Washington.
Republicans, especially conservatives, have an obligation to restore lost trust, he urged:
It is our opportunity and imperative to reform the corporate welfare state. It is both right and necessary. For then – and only then – will we have the moral authority and the people’s trust to reform the social welfare state. …
This is a call to action for Republicans and conservatives to reject the Washington insider economy and 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.
>>> Watch the Speech: A Time for Choosing: Main Street Economy vs. Washington Crony Economy