Friday, October 7, 2011

TAXPAYERS ON HOOK FOR MONUMENT TO DEM LEADER

You might be surprised to hear there is a Harry Reid Research and Technology Park. You won't be surprised to learn that U.S. taxpayers are funding part of it.

This monument to the Senate majority leader was not subsidized through some earmark Reid stuck in an appropriations bill. The $2 million grant came through a little-known part of the Commerce Department known as the Economic Development Administration. As Republicans assert that this time they are serious about cutting spending, killing a corporate welfare agency and pork machine like the EDA would be a great start.

Freshman Rep. Mike Pompeo, R-Kan., has introduced the EDA Elimination Act of 2011. In the upper chamber, conservative Sen. Jim DeMint, R-S.C., proposed a similar measure. While EDA is relatively small and nearly unknown, Pompeo sees this as a crucial fight. He calls the EDA "pure redistribution" and the prime example of how federal involvement in the economy allocates wealth "by political processes rather than market processes."

If you've read about absurd congressional earmarks, the list of EDA grants will be dispiritingly familiar. Cedar Rapids, Iowa, is building a $52 million convention center, with the EDA covering most of the cost. EDA paid $2 million to subsidize a "culinary amphitheater" and wine tasting room in Richland, Wash. Essar Steel Minnesota is building a new plant, and the EDA is footing $1.4 million of the $1.6 billion tab.

The EDA is not a "social" agency. It's not about subsidizing the arts, feeding the hungry, promoting diversity or caring for the poor. It is purportedly about increasing economic prosperity. While other aspects of the Great Society agenda (under which Lyndon Johnson created the EDA) are openly about sacrificing wealth for helping the less fortunate, this agency claims to do the same thing that the free market does: increase society's wealth.

Pompeo is right: Abolishing the EDA is an excellent test of whether Republicans actually believe what they say they believe.

Nearly every Republican voted against President Obama's stimulus in 2009, arguing that the deficit was too high, that government shouldn't be in the game of picking winners and losers, and that Washington doesn't create jobs. But the EDA adds to the deficit, picks winners and losers, and purports to create jobs. If Republicans vote to continue the EDA, they flaunt their hyprocrisy to critics, who charged in 2009 that GOP opposition to the stimulus was pure politics.

Is the Republican outrage over the subsidization and bankruptcy of solar company Solyndra anything more than political theater? If the Solyndra sound and fury signify any actual principle, the GOP would also kill the EDA.

An EDA vote will also illuminate the House GOP's earmark ban. Was that simply a sop to the Tea Party base that had powered the GOP's rise to the majority? Or did it reflect a belief that the federal government should hew to its enumerated powers and quit funding local projects?

Looking back on the GOP's recent history, however, there's little reason to be hopeful. After Republicans started to roll back farm subsidies in the 1990s, they saved them and ramped them back up last decade. Federal discretionary spending increased every year when Republicans controlled both Congress and the White House. The federal government has more than 80 economic development agencies, and Republicans haven't passed legislation to abolish even one.

Why would Pompeo think he has a shot of killing the EDA? "The times are different," the freshman told me on Wednesday, pointing to the Tea Party's effect on the GOP. But a look at the GOP's presidential front-runners ought to make Pompeo less optimistic. Rick Perry created two new economic development agencies as governor, and Mitt Romney generously handed out economic development grants. Meanwhile, House and Senate Republicans are supporting a bill to expand the Export-Import Bank, an international subsidy agency. It seems Republican officials don't have as much faith as they claim to have in low taxes and low regulation to stimulate the economy.

Even Pompeo won't deny Uncle Sam a role in economic development. Ex-Im's largest beneficiary, Boeing, has a plant in Pompeo's district. I asked the congressman how he would vote on that agency's reauthorization this Congress. "That's a tough one for me." He said he would "love to see the Ex-Im Bank go away," but he can't commit to voting against it because of competing foreign subsidies, such as Europe's handouts to Boeing competitor Airbus.

For Democrats, a heavy government hand in the economy is part of their philosophy. For Republicans, it may just be part of their politics.

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CORRECTION: This column originally misstated the amount of the UNLV grant and the total cost of the Minnesota steel plant.

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