Christmas! It’s that magical season when Republicans and Democrats come together to look after the needs of corporate America, K Street lobbyists, and the U.S. Chamber of Commerce.
Look at the legislation moving through Congress today, and you’ll see why corporate lobbyists are full of holiday cheer.
This week, Congress will pass a long-term highway bill. The highway measure is a huge win for industry while a loss for good governance. Far worse, however, is the unrelated rider on the bill: A provision reviving the defunct Export-Import Bank, a corporate-welfare agency that used to subsidize foreign buyers of U.S. goods, primarily Boeing jets.
Ex-Im gives taxpayer-backed financing to foreign companies (typically state-owned) that buy U.S. goods. A full 40 percent of that financing subsidizes Boeing jets. The rest mostly helps other big companies like General Electric and Caterpillar. Most Ex-Im financing provides free money for the banks, such as JP Morgan, that get taxpayer guarantees.
Ex-Im’s charter expired June 30. In the three months that followed, Boeing and its overseas customers had to survive in the cold world of private finance. In that quarter, “Boeing continued a recent trend of smashing analyst earnings estimates,” as one investment website put it in October. The jetmaker’s profit rose 25 percent compared to the previous year, all while the rest of the international economy softened.
K Street lobbied incessantly to revive Ex-Im, backed by President Obama, Hillary Clinton and nearly every Democratic lawmaker. Tennessee Republican Rep. Stephen Fincher — a Tea Partier-turned K Street agent — circumvented the House leadership and the Financial Services to move an Ex-Im bill to the House floor in October. Together with Nancy Pelosi and Maxine Waters, Fincher passed his bill. House and Senate GOP leaders agreed to stick Fincher’s bill — which revives Ex-Im and extends its charter into 2021 — into the highway bill.
Senate Majority Leader Mitch McConnell opposes Ex-Im’s revival, but over the summer he made it clear that he wants a long-term highway bill more than he wants to keep Ex-Im dead. So McConnell made the trade-off: He gets the highway bill, and he gives Democrats and Fincher’s K Street Republicans their Ex-Im.
But this trade-off for McConnell is a lose-lose for conservatives and a win-win for K Street. Heritage Action, the conservative lobby group, opposes the bill, arguing that it “would spend more on highways than either the House or Senate-passed bills, and would finance that increased funding almost exclusively with embarrassing budget gimmicks.”
One man’s overspending, however, is another man’s revenue stream. The U.S. Chamber of Commerce and the Business Roundtable have applauded the highway bill, and cursed Congress for taking so long. The $305 billion in spending (“paid for” with taxes and sloppy budgeting) will enrich contractors. The American Road and Transportation Builders Association applauded the bill’s passage.
As a corporate cherry on top, the bill repeals a recent minor cut in federal crop insurance subsidies, a program that benefits financial firms more than it helps farmers.
House Republicans on Thursday morning passed an energy bill with many laudatory provisions, including one allowing the export of crude oil. It was a case where free enterprise and industry agreed. But when conservative member Ron DeSantis wanted to add a measure repealing the ethanol mandate, it was struck down—and so that bit of corporate welfare favored by Hillary Clinton and the Ag Lobby stays in.
Congressional leaders are currently negotiating another year-end legislative package, the notorious annual tax extenders bill. The talk around Capitol Hill is that the bill will extend (at least for a short-time) green-energy subsidies: The Production Tax Credit for wind and the Investment Tax Credit for solar.
Provisions in the extenders bill, in any event, will range from absurd to arcane to common sense. Almost none of them are crucial for economic growth or other conservative priorities. Almost all of them are crucial for some special interest and the revolving-door lobbyists they employ.
As this legislation — the highway bill, the energy bill, the tax extenders, plus the omnibus spending bill—pass through both houses, expect hosannas to the “bipartisanship” and “compromise” involved. Indeed, Democrats win some (see Ex-Im), free-marketeers win some (see oil exports), and old-guard Republicans win some (see higher spending levels). But there’s one common theme here: Corporate lobbyists win in almost every case.
There’s nothing wrong with voting for an industry priority if that industry priority is also good policy. But industry priorities seem to have become the guiding star of both parties’ leaderships. If you ask the GOP leadership, they’ll see their legislating these days as an unqualified success, because for industry, it’s all winning.
Republican leaders are probably confused about why all their accomplishments and imminent accomplishments, including the highway bill, tax extenders and appropriations, haven’t dragged Congress’s approval out of the gutter—after all, everyone they talk to thinks Congress is doing a bang-up job.
Look at the press releases from the Chamber of Commerce, and the PAC checks from K Street, and you’ll see whose wish lists Congress has been reading.
Timothy P. Carney, The Washington Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Tuesday and Thursday nights on washingtonexaminer.com.
