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A Turning Point on Crony Capitalism?

Sen. Mike Lee and others in the GOP confront the Export-Import bank---and corporate welfare.

One of the most enduring images of the early Reagan years is the “welfare queen.” The not entirely apocryphal story of a woman making a six-figure income on welfare became for conservatives a symbol of everything that was wrong with the welfare state—and for liberals a symbol of everything that was wrong with conservatives.

In the 1990s, that symbol was Claribel Ventura, a 26-year-old mother of six charged with child abuse. She scalded her 4-year-old son’s hands with boiling water to punish him for eating her boyfriend’s food. A Boston Globe investigation determined that Ventura was part of a family of 17 children, 74 grandchildren, and 15 great-grandchildren collecting a total of $1 million a year in public assistance.

The Globe asked one of Ventura’s siblings what she would say to the taxpayers footing the bill for their family. “Just tell them to keep paying,” she replied. Even in liberal Massachusetts, the public was outraged.

Twenty years later, is the new welfare queen General Motors, General Electric, Boeing, and other big corporations receiving taxpayer funds? Have Claribel Ventura and Linda Taylor been replaced by federally financed flops like Solyndra?

Mike Lee, the Republican senator from Utah, is a successor to the conservatives who railed against welfare abuse in the ‘80s and ‘90s. The Tea Party leader does have proposals to revamp anti-poverty programs. But his main target this year is the much more arcane Export-Import Bank, which ostensibly exists to benefit exporters.

“In short, Congress allows the Ex-Im Bank to unnecessarily risk taxpayer money to subsidize well-connected private companies,” Lee wrote in a National Review op-ed, quoting Barack Obama (now an Ex-Im Bank reauthorization proponent) calling it “a fund for corporate welfare” in 2008.

“Whether the beneficiaries of particular Ex-Im Bank loan guarantees are respected, successful companies like Boeing or crony basket cases like Solyndra is irrelevant,” Lee added. “Twisting policy to benefit any business at the expense of others is unfair and anti-growth.”

Republicans have been urged to oppose corporate welfare and cronyism since Reagan budget director David Stockman suggested attacking weak claims, not weak claimants. But as the party of business, GOP politicians have often been reluctant to put their free-market principles into practice when it means allowing the well-heeled or well-connected to fail.

That may be starting to change. House Financial Services Chairman Jeb Hensarling, a Republican from Texas, has jurisdiction over the Ex-Im Bank. He voted against its reauthorization in 2012 and is still pressing to make its survival contingent upon reforms. “I for one remain skeptical that taxpayers ought to be on the hook for this book,” he said in March.

Hensarling may have a powerful ally in Paul Ryan, the House Budget Committee chairman. The Hill reports that Ryan argued in favor of letting the Ex-Im Bank’s authorization lapse in a private meeting—and that House Majority Leader Eric Cantor may be reluctant to go to the mattresses on the issue.

According to The Hill, Cantor “has privately told members he does not intend to get involved this time around, a message that some see as an indication that he is wary of battling conservatives angered by a number of his recent legislative moves.”

Senate Minority Leader Mitch McConnell, who faces both a Tea Party primary challenger and a competitive Democratic opponent this year, voted against reauthorization in 2012. This could be a good chance for him to flex his conservative muscles without alienating swing voters.

Lee contends that the reauthorization battle comes at an opportune time. Authorization lapses on Sept. 30, right before the midterm elections. Republicans could oppose subsidies for big business at the same time the White House and most congressional Democrats are defending them.

The writers and thinkers who brand themselves “libertarian populists” hope this will flip the familiar script where opposing big government is seen as tantamount to supporting big business. They argue that business and government often have a codependent relationship.

It’s probable that fewer Americans could identify the Export-Import bank than could find Ukraine on a map, so this one vote is unlikely to be transformative. But when companies that can afford to look out for themselves receive taxpayer benefits, it would be nice if Republicans were the party advocating for a level playing field.

W. James Antle III is editor of the Daily Caller News Foundation and author of Devouring Freedom: Can Big Government Ever Be Stopped?