Conservatives make it rough for business

[July 09, 2012]  WASHINGTON (AP) -- Conservative Republicans have roughed up the business community this year -- and it's not over yet.

The U.S. Chamber of Commerce, the National Association of Manufacturers and major companies like Boeing Co. and Caterpillar Inc. all wanted quick reauthorization of the Export-Import Bank, which helps finance American companies' overseas sales. Congress had reaffirmed the independent federal agency some two dozen times since its creation in 1934. But this year it took months of pleas, briefings and negotiations to overcome conservative opposition.

Similarly, industries ranging from asphalt to steel pressed for the popular transportation bill to rebuild the nation's infrastructure. Conservatives wanted to give authority to the states. Nine short-term extensions later -- and almost three years after the last transportation bill expired -- businesses finally prevailed last month.

The business community is now pressing the Senate to ratify a treaty governing the high seas, arguing that it would open a new path to oil, gas and other resources and produce thousands of jobs. Prospects are uncertain as conservatives stand united in opposition. They condemn the pact as a threat to U.S. sovereignty.

Perhaps the most telling clue is that proponents call it the Law of the Sea Convention -- shorthand LOSC -- while opponents refer to it as the Law of the Sea Treaty -- LOST.

Republicans like to tout themselves as the best friends of business, and the rhetoric only grows louder in an election year. They talk forcefully about their job-creation agenda and determination to undo the burdensome regulations they say arise out of President Barack Obama's policies.

Yet when it comes to many of industry's top legislative priorities, conservative Republican lawmakers and like-minded groups including the Club for Growth and Heritage Action have thrown up roadblocks to tasks that had been easy before the 2010 elections sent a large class of conservative tea party insurgents to Congress.

They and their ideological leaders argue that the marketplace should dictate what businesses thrive and falter, not Washington.

"What we find now is this cronyism and this corporate welfare, it's corrupting the politics because there's nothing now that goes through that doesn't have a corporate interest," Republican Sen. Jim DeMint told The Associated Press in an interview. "It's not just the Ex-Im Bank. It's the transportation bill that has huge entities involved. The farm bill basically guarantees large corporate farmers."

DeMint warned that the combination of big government and big industry is creating a nation that is becoming "too big to succeed."

Democrats also are giving the business community fits beyond the normal ferment over workplace and union issues.

Industry and corporations are pushing for Congress to approve permanent normal trade relations with Russia this month, now that Moscow is slated to join the World Trade Organization. Normal trade ties would open Russian markets to more U.S. goods and investments. Russia has the ninth largest economy in the world, but its imports from the U.S. were a paltry $11 billion in 2011.

Democrats, led by Sen. Ben Cardin, want to impose tough sanctions on Russian human rights violators, and Democratic Senate Finance Committee Chairman Max Baucus has signaled he will link the human rights legislation to any bill normalizing trade relations.

Both Democrats and Republicans acknowledge that business prospects in Congress could become even more difficult next year if the November elections, as expected, increase the ranks of conservatives in the DeMint mold -- especially in the Senate.

Consider the fight over the Export-Import Bank.

In February, the Chamber and other industry representatives provided 200 House members with fact sheets aimed at debunking claims that the Ex-Im bank is a "vehicle for corporate welfare."

The Chamber, which represents 3 million businesses and organizations, pointed out that since 2005, the Export-Import bank has generated more than $3.4 billion in revenues for the Treasury above costs and loss reserves, including $700 million in fiscal 2011.

The issue hit home in South Carolina, where Boeing said eight of the 10 aircraft made in the state would be purchased by overseas companies thanks to credits provided by the Ex-Im bank. Unmoved, DeMint and other conservatives argued against the agency and its existence.

"When Washington picks winners and losers, in the end taxpayers always lose, and Ex-Im is no exception," DeMint wrote in an editorial May 5 in the Greenville News. He described himself as a "South Carolinian, an American and a guy who likes cool planes," and added, "I love Boeing."

Days later, the House passed reauthorization of the self-financing agency for three years and raised its lending cap from the current $100 billion to $140 billion. After the Club for Growth, which rates politicians on their adherence to its conservative agenda, said it would score a vote in favor of the bank as against that agenda, 93 House Republicans opposed the bill.

Chris Chocola, president of the Club for Growth, said though it lost on the Export-Import Bank, the prolonged debate was a positive development.

"The world has changed," Chocola said in an interview. "People understand that the size and scope of government is not just entitlements. It's also transportation bills. It's also programs like Ex-Im bank. It's corporate welfare as well. And things that have automatically been reauthorized are being questioned as to whether that's really good policy and whether we can afford it."

Blair Latoff, a spokeswoman for the Chamber, said the organization understands that lawmakers are not going to agree with it 100 percent of the time.

Democratic Sen. Maria Cantwell of Washington, home to major Boeing facilities, recalled at least five or six times when reauthorization of the Export-Import Bank occurred with no problems.

"All of sudden to throw it up in that kind of disarray when we need to win in the international marketplace -- we need to be competitive in getting U.S. manufacturers products into international markets," she said in an interview. "It was definitely disappointing."

Brian Hansen, vice president of Dustrol Inc., an asphalt recycling and resurfacing company in Towanda, Kan., came face to face with the new political reality on the transportation bill.

Hansen was part of a group of Kansas construction industry executives who met with the state's congressional delegation and staff in May to press for the transportation bill.

"They are all in favor of it but nobody wants to fund it. That's the big problem," Hansen said. "It all boils down to money and how are we going to pay for it. With the economy and all the other issues going on, everybody is very reluctant to talk about funding anything with any type of increase, which is ridiculous when infrastructure is one of the few things the federal government should be involved in."

Freshman Republican Rep. Tim Huelskamp was one of those who voted against both the Ex-Im Bank and the transportation package. "Conservative folks like myself believe in the marketplace making decisions," he said.

[Associated Press; By DONNA CASSATA]

Associated Press writer Joan Lowy contributed to this report.

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