Congressional Republicans and the Obama White House are headed for another clash over corporate welfare, and once again President Obama is on the side of big business while Senate conservatives are on the side of free markets.
The battleground is the Export-Import Bank, a federal agency that subsidizes U.S. exports -- mostly Boeing jets -- by issuing taxpayer-backed financing to foreign buyers. In 2008, candidate Obama aptly described Ex-Im as "little more than a fund for corporate welfare."
Obama has spent four years pumping steroids into Ex-Im, setting a record $35.7 billion in taxpayer-backed financing last year. Ex-Im's biggest subsidy program is its loan guarantees, and the agency doled out $14.5 billion of those last year, with $12.2 billion going to subsidize Boeing jets. Piloting Ex-Im as chairman for those four years has been Fred Hochberg. Late last month, Obama announced he is nominating Hochberg for a second term.
As Hochberg used the agency's annual conference on Thursday to defend and extol his tenure, the conservative Club for Growth -- a significant money source for the Tea Party insurgency in the GOP -- came out against his appointment. The club announced that it would include Hochberg's confirmation vote in its annual scorecard. In other words, if a Republican senator wants to avoid a Tea Party primary challenge, he or she would do well to oppose Hochberg.
Hochberg's nomination would be yet another Tea Party-vs.-K Street battle within the GOP. The U.S. Chamber of Commerce is firmly in Hochberg's camp. At Ex-Im's conference (where JPMorgan Chase was named Lender of the Year), Hochberg gave the Chairman's Award to chamber President Tom Donohue to thank him for his group's successful effort fighting off a Tea Party-led effort to kill Ex-Im, whose charter was up for renewal last year.
"Tom and his team was one of the key voices in our reauthorization last year," Hochberg said. He applauded the chamber as the "rational" force on Capitol Hill that helped persuade a majority of Republicans to vote for reauthorization. (Democrats almost unanimously supported Ex-Im.)
The award confirmed that Obama is just blowing smoke when he decries special interests, corporate welfare and big-business lobbyists. Here was his appointee (whose renomination he is now championing) publicly rewarding the largest business lobby in the world for its lobbying efforts in pursuit of corporate welfare.
To persuade Republicans to abandon their belief in free markets, the chamber's lobbyists argued that Boeing and other U.S. manufacturers need Ex-Im only because other countries -- mainly China, Brazil and some European nations -- subsidize their exports. Many Republicans agreed to reauthorization this year with the understanding that the Obama administration would work toward multilateral disarmament in export subsidies.
The Club for Growth wants the GOP to hold up Hochberg's nomination until some actual curbs are placed on Ex-Im. "Conservatives should oppose Hochberg's nomination until a real plan is implemented for reducing the bank's authority with the ultimate goal of ending its charter completely," said the club's vice president for government affairs, Andy Roth.
But Hochberg is taking Ex-Im in the opposite direction. He bragged Thursday that Ex-Im, in the first six months of this year, approved $14.8 billion in authorizations, a 40 percent increase from the same period last year.
Hochberg, along with Vice President Biden, who addressed the conference on Friday, touted Ex-Im's largest deal ever: a $5 billion direct loan to subsidize Saudi Arabia's state-owned oil company in building a giant petrochemical plant there. U.S. companies Dow Chemical will own 50 percent of the venture and ABB Inc. will provide some of the plant's equipment.
In years past, Hochberg would have sailed to nomination. But the Tea Party has forced the GOP, including the Senate Republican caucus, to take a harder line on corporate welfare. Last year, for instance, 20 Senate Republicans voted against Ex-Im reauthorization, compared to single-digit opposition in years past.
Some first-term senators -- including Mike Lee, Rand Paul, Ted Cruz, Pat Toomey and Marco Rubio -- won their GOP primaries against a flood of money from corporate political action committees and K Street lobbyists. Lee filed an amendment to wind down Ex-Im.
A tinge of populism has spread from these Tea Party upstarts to the party leadership. No less than Senate Minority Leader Mitch McConnell, R-Ky., voted against Ex-Im last year.
In coming weeks, Senate Republicans might pick another fight with Obama over corporate welfare. It's a fight worth having.
Timothy P. Carney, The Examiner's senior political columnist, can be contacted at email@example.com. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.