WASHINGTON – House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said the Republican Party must sever its ties with “crony capitalism” in order to have the moral authority to usher in major economic policy changes.
Speaking at the Heritage Foundation last Tuesday, Hensarling laid out his vision of a Republican Party that champions a “Main Street competitive economy” and spurns the “great deal of economic activity that masquerades as free enterprise.”
Hensarling urged his fellow Republicans and conservatives to reject the Washington insider economy and its reliance on “earmarks, regulatory barriers to entry, subsidies, tax preferences, and political influence” and to “come down clearly on the side of free enterprise.”
“We conservatives know…that the genius of America is not to be found in Washington’s corridors of power and favor. Instead, we know that the true America is in the founding and enduring principles of our republic – namely faith, limited government, unlimited opportunity, individual freedom, and free enterprise,” he said.
Hensarling also called on Republicans to support his PATH Act proposal to end the government-backed mortgage lenders Fannie Mae and Freddie Mac, step up efforts to overhaul the tax code, and eliminate federal farm subsidies.
For the most part, Hensarling devoted his speech to the U.S. Export-Import Bank. The agency, which supports loans to overseas companies to help them buy U.S. exports, has come under fire by some Republicans who believe the Ex-Im Bank amounts to nothing more than corporate welfare that disproportionately benefits a handful of companies.
While the Texas Republican said he does not care much about the term “crony capitalism” – which he said suggests that capitalism is corrupt when the American free-enterprise system is in reality “the most fair and most moral economic system ever devised by the mind of man” – Hensarling characterized the bank’s activities as “crony-based political lending.”
“Crony capitalism slows economic growth and redistributes income. It can breed corruption and undermines the legitimacy of both government and free enterprise,” he said.
In fiscal year 2013, the Ex-Im Bank authorized $27.3 billion to support an estimated $37.4 billion in U.S. export sales. The bank borrows money from the Treasury Department and pays interest on the funds to the Treasury.
In 2013, the agency provided a South African company with $230 million in loan guarantees to buy 100 locomotives built by General Electric and a $190 million loan to an Israeli firm to finance the launch of a communications satellite aboard a rocket operated by SpaceX – a California-based company owned by billionaire entrepreneur Elon Musk. No other U.S. company, though, has benefitted more from the bank than Boeing. Last year, the agency offered $7.9 billion in loan guarantees to help the manufacturer sell 106 of its airplanes to foreign airlines, reinforcing the agency’s moniker in Washington – “the Bank of Boeing.”
Hensarling voted against reauthorizing the bank in 2012 and said the House Financial Services Committee will hold hearings on the matter in the weeks ahead.
“Today I call upon every Republican in Congress to simply let Ex-Im expire,” Hensarling said. “Let the American taxpayer exit Ex-Im once and for all.”