The Corner

Economy & Business

We Will Know Soon Where Republicans Stand on Cronyism

At least 42 Republicans in Congress will vote today to revive the Ex-Im bank through a discharge petition which they initiated under the leadership of Tennessee’s Stephen Fincher. In this rare maneuver, they will be happily joined by almost all the Democrats in the House. 

Many of the same centrist Republicans who complained about conservatives stabbing the GOP in the back on congressional procedures are behind the effort to circumvent their own leaders and force a vote on the divisive Export-Import Bank.

Forty-two Republicans — less than a fifth of the House GOP conference — joined 146 Democrats in signing a rarely used vehicle known as a discharge petition to bring the issue to the floor 

The move is shocking in many ways. It is a sign that many Republicans in the House have no problem showing their support for cronyism and K street at the expense of everyone else without, it seems, fear of consequences. It also shows how easily some GOP members will ally with Democrats to advance so odious a goal. As Heritage Action’s Dan Holler rightfully notes, the move amounts to giving Nancy Pelosi control of the House floor, something which I doubt voters expected to happen again after giving the Republicans their biggest majority since 1928. It is also a perfect demonstration that bipartisanship often results in the growth of government and the promotion of special interests. Finally, the move goes a long way to bypass regular order. It should give pause to every chairman in the House as a tactic can be used against them next. 

For all these reasons, and many more, it will be interesting to see who joins Fincher and his crew in supporting Ex-Im through the discharge petition today. 

What will Senate majority leader Mitch McConnell do with the bill when it reaches the upper chamber? In theory, he will do nothing and the discharge petition will die there. First, he has already delivered on his promise to give the pro-Ex-Im senators the vote they were asking for in exchange for their support for TPA. Second, McConnell is against the Bank and I assume it means that he will not allow a standalone Ex-Im vote, especially when a majority of his majority also opposes Ex-Im. 

If that is the case, the next vehicle for Ex-Im would be highway conference in November. The pro-Ex-Im crowd will make the case that Ex-Im is in the Senate bill (since July) and that the House supports it by virtue of discharge. However, it would be extremely hard for a Speaker Ryan to allow such a bill to the floor. He has made his opposition to Ex-Im very clear and I doubt he will go against a majority of his conference for a program he feels so strongly about.

I have obviously spent a great deal of my time fighting this program for the last two years. No matter what happens today, I can’t overstate how disappointed I will be if Ex-Im is reauthorized. But I am still amazed that so many scholars and groups have stood up against it. For so many years, no one cared about cronyism at all — Tim Carney of the Washington Examiner was often a lonely voice highlighting the unfairness of a system that serves the politically connected at the expense of everyone else.

In addition, the Wall Street Journal today also rightfully recognizes the tremendous efforts of Chairman Hensarling to defeat Ex-Im. I would like to repeat here what I think of the Chairman’s efforts:

The fight has earned Mr. Hensarling, who studied economics under future political mentor and former Texas. Sen. Phil Gramm, gold stars from influential conservative organizations, free-market economists and some fellow lawmakers. “He’s fighting the battle of ideas, and the battle of ideas is not fought by compromising at the beginning,” said Veronique de Rugy, senior research fellow at the Mercatus Center at George Mason University.

Ms. de Rugy compares the Ex-Im fight to economist Milton Friedman’s push to introduce school vouchers that began in 1955 as well as to a 1959 proposal from another economist, Ronald Coase, to use market auctions to award radio-spectrum licenses. Both ideas were roundly mocked at the time.

Intellectual leadership isn’t often seen in Congress. Mr. Ryan was such a leader about reforming entitlement spending at a time when Republicans would rather talk about anything else. And I say that despite having criticized several iterations of the Ryan budget. Mr. Hensarling is another of these intellectual leaders in Congress. Good for them.


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