Part One: DeMint on pork and Ex-Im bank

Q: On the transportation bill, as I understand it this bill has been on a continuing resolution for a long time. Is there ever going to be a point where they’re going to get an actual new bill through?

DeMint: Well, we’re in the middle of a paradigm shift. The transportation bill has always been that bill where everybody gets their earmarks – ‘I vote for your boondoggle, you vote for mine.’ Without earmarks, it becomes a different animal altogether. What we tried – what [Florida Republican] John Mica tried to do in the House – was to pass a transportation bill that was funded in the way that’s set up by law, through the highway trust fund which is fed by gas taxes.

But then that was actually changed. It was not good enough, and they wanted to add more spending to it because they’re trying to figure ways to get around the earmark thing [ban] – to put more money into transportation and various slush funds that they all know will end up in different projects around the country.

So they plussed it up, and even some normal moderates who would vote for it in the Republican Party realized that if we keep doing this idea of we’re going to spend the money in two years and we’re going to pay for it over 10 years. And every time we come to the end of those two years everybody screams and says ‘we can’t cut the funding, we have to keep spending at that level.’ And they have to look around for more.

We do it with the doc fix, we do it with almost everything now that we’re passing. And the pay for this – what they we’re trying to do with two years in the Senate – are things like revenues that are going to come from ANWR [Arctic National Wildlife Refuge].

(Laughter.)

You have to laugh if you’ve been around; we’ve been trying to open ANWR for 30 years. And so they’re saying that we’re going to get that done and that’s going to help pay for this — even the two years. I think just because of, I think, better reporting on the outside – you guys have been great on that – there’s more of a light shining on this.

And there’s – I think among voters, they’re starting to look at both sides of the equation: of course we need to build roads, but we’re borrowing money to do it; how do you balance that? And if we can get that debate going, everything starts to be handled in a more honest way.

The same thing is happening with [the Export-Import Bank]. That’s always been UC’d before (passed by unanimous consent). But a few of us have squawked about that because it’s a program that started with a $5 million cap – a very targeted goal – now they’re going for $140 billion; there’s a whole lot of misuse.

We’ve got companies who are actually shipping to themselves overseas, taking subsidies – Solyndra gets it. It’s just like everything else – mission creep, corruption, misuse. But major companies, major companies like Boeing who have made a big footprint in South Carolina, say we have to do it because our competitors do it. And so we’re in a bidding war with Europe and Canada and China of who can subsidize the most loans.

But again, the dialogue has changed a little bit. We’re kind of saying, ‘okay, they told us everything was hunky-dory with Fannie Mae and Freddie Mac – it was making money – looked us in the eye and said there’s no danger here, no risk. They’re doing the same thing with the Ex-Im bank. But when we’re making loans to foreign countries that are in deep debt trouble like we are, it’s not unrealistic to think we could have some major defaults.

And there’s another question, too, on Ex-Im….When we subsidize Boeing selling to Air India but we don’t subsidize Boeing selling to Delta, it has a big impact in our country, and Delta then is incentivized to buy foreign planes that have a European or a Canadian subsidy. It’s just a perverse route that we’re going, and I think a lot of us are just saying ‘we can do this better.’ … In fact, if we just created a territorial tax system, Boeing would save a whole lot more than they do on the subsidies for loan guarantees. So, instead of keeping doing the wrong thing, we need to stop doing that, and that forces us to do the right thing.

The same thing has happened on earmarks. Now that people are finally getting serious about reforming how the Corps [Army Corps of Engineers] works, how harbors and ports are funded and their dredging — they’re looking at ways to use harbor fees to actually do what they’re supposed to do – no one would look at that before.  So, we haven’t gotten anything into the endzone but a lot of this stuff now is in the public debate, which helps us make more rational decisions.

Q: First a brief question on Ex-Im, Senator: it’s been pulled out for now, but seems like it’s probably going to be a temporary victory; would you agree with that?

DeMint: Yeah. Yeah it’ll pass because all the Democrats will vote for any subsidy and there are enough Republicans who – really you find out how may corporations are on the government dole – when I try to get rid of energy tax credits, you know, you have General Electric in here [that[ makes gas turbines, reminds me of all the jobs in South Carolina; Boeing’s done the same thing on Ex-Im. All the transportation companies have been in when we tried to stir the pot on transportation. So, the constituency to spend more money is huge.

They’ll pass the Ex-Im, but we want to make enough noise to maybe get one  reform or two in it – because the law requires Ex-Im bank to do an analysis of the effect on American jobs and they just blew that away, they hadn’t done it. So, if we can make it painful enough this time, then maybe we can start the movement towards real reform and maybe under a new administration, actually some negotiations with our trading partners and actually say, ‘okay why don’t you not subsidize and we not subsidize.’

So, the point now is just to get it on the radar when it’s never been before, and to particularly point out to voters, here’s another example of government subsidies and bailouts. Everybody complains about them but then the president supports them, and so corporate welfare is alive and well.