Now the media have recovered from the shock of Cantor’s unexpected defeat, they’ve moved on - without so much as a break-up text. Although Cantor will be House Majority Leader until July 31, it was Kevin McCarthy, the House Majority Leader-in-waiting who was given the prime spot on Fox News Sunday this weekend.
No-one can remember when McCarthy was last invited onto a Sunday show; those few-and-far-between appearances weren’t exactly memorable, but that’s all changed now. Nobody wants to talk to the demoted and defeated; it’s the victor who wins the Sunday morning spoils. From Fox and the GOP’s point of view, they can’t lose with McCarthy because McCarthy can’t lose in November – he’s the only candidate standing in California’s District 23. A sure-fire winner to replace a loser has to be good news for Fox and the GOP – or so you would think.
McCarthy’s interview with Chris Wallace was friendly, relaxed and seemingly non-controversial. Because nobody really knows who McCarthy is, the interview touched briefly on his background and voting record (including, of course, the various different rankings he has with the conservative rating industry) in addition to his positions on issues like immigration reform etc.
But then came the kicker: the question of reauthorizing the Export-Import Bank’s charter when it expires on September 30. It sounds pedestrian enough in the interview but in reality it’s a hornet’s nest.
Established in 1934 to provide financial assistance to foreign buyers of US goods in order to encourage exports, it’s estimated that the Ex-Im Bank brings in around $1 billion a year for the Treasury thereby nullifying any cost to taxpayers. It is well regarded by the business fraternity, particularly smaller businesses that have gained export markets through its auspices. On average, more than 85% of their transactions directly benefit US small businesses from those exporting pecan nuts to green industries involved in energy recovery.
In previous years, reauthorization of the charter has always had bipartisan support (the 2012 reauthorization bill passed 330-93 with no Democrats opposing it) but this year the bank has sparked fierce debate within the Republican Party and that has business groups worried. With the change in House leadership, they can no longer rely on Cantor’s support or on their 2012 ally Rep Spencer Bachus (R-Ala) who helmed Financial Services, the committee with jurisdiction on the issue.
They had hoped McCarthy would back them but they didn’t reckon with the back-room politics of his recent election. In order to win tea party support for his bid to become majority leader, McCarthy held a closed-door meeting to assure them he wouldn't overstep Hensarling, the current chair of Financial Services, and Hensarling has been one of Congress's most vocal opponents of Ex-Im Bank.
That puts McCarthy in a difficult position with regard to reauthorization of the bank’s charter. While he supported it in 2012, if he tries to again in 2014 he’d have to bring a bill to the floor without Hensarling's approval, a clear violation of the agreement he’s made with the tea party. By doing so, he'd undoubtedly stoke the feud between them and the GOP establishment just a scant month or so before the midterms. In his interview with Chris Wallace, McCarthy confirmed Ex-Im’s worst fears – he’ll play nice with the tea party, stick by Hensarling and oppose reauthorization.
But there’s opposition to this opposition: Rep Chris Collins (R-NY), as it turns out, is a co-founder and still serves on the board of directors for Audubon Machinery Corporation which reported over $8 million from Ex-Im in capital guarantees and trade insurance between 2007 and 2014. Understandably Collins has good reason to support the bank so he and other Republican House members have been circulating a letter urging the leadership to reauthorize Ex-Im, and the letter is endorsed by the US Chamber of Commerce and National Association of Manufacturers.
The Republican Party has enjoyed a long association with business interests, especially the Chamber of Commerce who are reliably generous when it comes to big donations. It looks like a slam dunk for them - but they have competition this time.
Enter Heritage Action – and they’re not happy with Collins & co. Heritage spokesman Dan Holler weighed in with:
"Here’s Rep Collins leading the charge of an entity that he’s personally benefited from. That’s the definition of Washington working for itself. It reaffirms a negative suspicion on the political class here. Americans might rightly think that’s outrageous."Collins was quick to return fire with the first public Republican criticism I’ve ever seen of Heritage Action:
"This shows how out of touch Heritage is with how jobs are created in this country. They don’t know what they’re talking about. They’re a think tank. They’re not out in the real world. They’re not creating jobs and employing workers. They don’t know how things work. It’s as simple as their ignorance."Given that the Koch brothers back Heritage Action, there may be some disagreement with Collins’ criticisms and the push-back won't be gentle. The Hill is reporting it as a serious escalation of GOP Ex-Im infighting, concluding their latest update with:
Holler and Collins’ public sparing underscores just how far apart the critics and the GOP establishment are on Ex-Im. Heritage [and their tea party politicians] has criticized Ex-Im as “corporate welfare” and “cronyism” while establishment Republicans view it as an economic engine.Kevin McCarthy stepped right into the middle of this hotspot and it will be the first real challenge for his leadership when he takes over from Cantor after the August break. It will be a tough test for him, and how he handles it will have real consequences in November when he faces reelection for his new position. That will determine how much of a winner, or loser, he really is.