McCarthy changed his mind on Ex-Im Bank reauthorization. (Tom Williams/CQ Roll Call)
It took less than 72 hours after his election for Kevin McCarthy to reveal an unambiguous and extremely consequential way he’ll be different from his predecessor.
In what’s looking like the year’s hottest dispute between small-government crowd and the business community, the incoming House majority leader took a surprising side on Sunday. The Californian is joining the hard core fiscal conservatives who want to close the Export-Import Bank, which for eight decades has been one of the main tools at the government’s disposal for helping American businesses.
The agency steps in when private credit is scarce or expensive. Using money borrowed from the Treasury, it either makes or guarantees loans so U.S. companies can expand their exports of aircraft, farm machinery, power generation equipment, telecommunications hardware and even gourmet food. The right reviles this as a prime example of corporate welfare and derides the Ex-Im Bank as an agent of crony capitalism.
During his time in the Republican leadership Eric Cantor was an anchor for the opposite side, which argues that such credit financing is a no-risk way to leverage taxpayer dollars in the interest of creating jobs and sustaining the nation’s manufacturing base. The Virginian was more responsible than anyone else for steering the Ex-Im Bank to temporary safety two years ago, when the waves of conservative criticism first got big enough to pose a potential threat. He was so well known as a defender of the bank that stock in one of its biggest customers, Boeing, plunged 3 percent the day after Cantor lost his primary, wiping away all its gains so far in the year.
The anxiety was fueled in part by anticipation that the Ex-Im Bank’s most influential House critic, Financial Services Chairman Jeb Hensarling of Texas, would run for majority leader. When he demurred, allowing the majority whip to secure his promotion with ease, the big companies relaxed a bit — because McCarthy had been on Cantor’s side in 2012 in supporting the current reauthorization of the agency.
But all elections have consequences, and two of them were on display when McCarthy revealed his 180-degree change of position on “Fox News Sunday.” The winner’s pivotal bloc of supporters will need to feel rewarded sooner than later, so it was only a matter of time before the new floor leader would need to stake out a strong position on legislation that’s a top priority of his allies in the tea party faction.
Not to mention an important rival who took a pass this time around could change his mind as soon as November, when leadership elections for the 115th Congress will be held. So it made sense for McCarthy to act quickly to shrink some of the ideological daylight between himself and Hensarling. Full story