Jim DeMint, the former South Carolina senator and influential conservative leader, has made a risky bet.
While he was once focused on the President’s well-known and unpopular health care law, DeMint, who today leads the Heritage Foundation, a Washington think thank, has now picked a far more obscure target: the 80-year-old Export-Import bank, a little known financial institution that Congressional conservatives would like to see shut down when it is up for reauthorization in September.
Last year, the bank financed the purchase of more than $37 billion of American exports. DeMint would like the bank, which he calls “socialist,” to become a top target for Republicans this fall.
“Certainly there are issues of more long-term fiscal importance, but [there are] few issues that reveal the rot and corruption of Washington more clearly than this,” DeMint says.
Conservative leaders, including the leaders of the anti-tax Club for Growth, Tea Party-supporting FreedomWorks and Heritage’s political arm Heritage Action, have all called for the expiration of the bank’s charter at the end of September. This would block the bank from backing new loans. Earlier this year at the Heritage Foundation, House Financial Services Committee Chairman Jeb Hensarling, a potential candidate for the next House Speaker, called the reauthorization of the bank a “defining issue” for the GOP.
Republicans are divided over the bank’s future, but there is enough Republican support in both chambers of Congress to reauthorize the bank’s charter, according to a TIME analysis. The pro-buisness Chamber of Commerce has heralded the bank for supporting 200,000 jobs while reducing the deficit without raising taxes (it charges fees for its services). While DeMint, Hensarling and other conservatives call the bank a prime example of crony capitalism and corporate welfare, the Chamber notes that small- and medium-sized businesses account for more than 85% of Ex-Im’s transactions.
In an interview with TIME, DeMint described why conservative groups like his own are making such a great deal over a little-known bank.
Is there any issue greater than Ex-Im on the minds of conservatives today?
Certainly there are issues of more long-term fiscal importance, but [there are] few issues that reveal the rot and corruption of Washington more clearly than this. Ex-Im issues taxpayer-subsidized loans for the politically connected that are rife with cases of fraud and waste. It’s symptomatic of so much that is wrong with Washington. It’s not necessary. It’s expensive. It puts taxpayers on the hook for billions of dollars. It threatens American jobs, and it should be ended.
Conservatives believe in opportunity for all and favoritism to none. Ex-Im exists to provide subsidies to some of America’s biggest corporations. It has led to allegations of kickbacks and bribes, with over 70 documented cases of corruption in recent years. Allowing the bank’s charter to expire could build momentum for even greater reforms.
We can safely assume the Democratic-controlled Senate will include Ex-Im funding in their end of the year spending package. Would you prefer House Republicans shut down the government or pass the bill with the Ex-Im funding?
I don’t assume anything about what Congress will do on Ex-Im, but what is clear is that this is terrible economic policy that should end. Economists across the political spectrum acknowledge that subsidies, in general, and Ex-Im, in particular, do more harm than good. The vast majority of U.S. exports—98 percent—do not receive any assistance from Ex-Im, and America does not need to adopt socialist policies to compete with Europe or any other countries.
Would you support House Majority Leader Kevin McCarthy if he allows a vote and Ex-Im passes, even if McCarthy himself opposes the bill?
If leaders in both parties put more focus on taxpayer concerns than special interest lobbyists, it’s an easy call to end this corporate welfare. It was refreshing to hear a newly appointed leader like Mr. McCarthy join with Americans opposed to wasteful government programs. Our focus is on better policy, not politics. Allowing the Ex-Im charter to expire and ending the unnecessary subsidies to major corporations is sound policy.
If you were still in the Senate and you saw Republicans take back the chamber in the midterm elections, would you vote for Senator Mitch McConnell as Majority Leader?
That’s a decision for politicians. At Heritage we’re focused on developing policies that improve the lives of all Americans regardless of party.
Would you prefer to see Rep. Jeb Hensarling or Rep. John Boehner as Speaker of the House?
These are decisions for members of Congress. Jeb is a strong conservative who should be applauded for leading on so many issues that put the interests of taxpayers ahead of special interests.
Do you believe the President should be impeached, as former vice presidential candidate Sarah Palin has advocated? Do you agree with the House Republicans’ choice to sue the Obama Administration over delaying the Affordable Care Act’s employer mandate?
We’ve not called for impeachment, but Congress and the public are right to be deeply troubled by President Obama’s blatant disregard of the law. Time and time again, he has simply ignored laws he doesn’t like. Any suit by the House of Representatives relating to this misconduct would certainly face procedural hurdles, but there’s a strong case to be made if a judge were to reach the merits of a challenge.
Why is the GOP establishment winning in most of the primary races this year? Has the influence of the Tea Party peaked?
Heritage is not involved in elections and doesn’t endorse candidates. Conservatives want sound policies, and a vibrant debate helps to lead us there. The grassroots push to make Washington listen to the needs of Main Street instead of Wall Street have been a very helpful part of that debate. Tea Party groups have certainly given a voice to concerns shared by a majority of Americans about Washington’s wasteful spending and debt, and they’ve had an enormously positive impact since 2010.
Will there be a conservative backlash to the Highway Trust Fund agreement reached by House Republicans and the President?
The highway program taxes drivers in all states and then diverts a huge amount of the revenue to boutique projects, like mass transit, in a few favored states. It should instead be focused on maintaining actual highway infrastructure—roads and bridges—throughout the country. The most efficient and effective means of doing just that is to keep gas tax revenues in the states, and allow states to decide spending priorities. Instead of bailing out mismanaged and wasteful Washington programs, we should be moving more dollars and decisions to the states where there’s more accountability.