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Debating Ex-Im With Jeb and Jim

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Congressman Jeb Hensarling is a great conservative from Texas who chairs the House Financial Services Committee.  Jim Talent is the terrific former senator from Missouri.  I spoke with both of them on Wednesday’s show about a number of subjects, but about the reauthorization of the Ex-Im Bank with both.  I hope you read or listen to boh conversations:

Audio: Hensarling

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Audio: Talent

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Transcript Hensarling:

HH: I want to begin today with Chairman of the House Financial Services Committee, Jeb Hensarling from the great 5th Congressional district of Texas. Mr. Chairman, welcome back, it’s always a pleasure to speak with you.

JH: Thanks, Hugh.

HH: The RNC announced today that the finalists for the convention in 2016 are Cleveland and Dallas. I think we can agree that Cleveland is a preferable place to be in late June/early July, can’t we?

JH: Well, I knew we were going to disagree on Ex/Im. I didn’t know we’d disagree so early in the interview on something. No. Dallas. Big D. People need to know what free enterprise and freedom is all about. Come to Texas. It’s a wonderful place. Our barbeque and our Mexican food is better.

HH: What’s the closest…

JH: But I still admit Cleveland rocks, and Johnny Football, I guess, is now Johnny Cleveland.

HH: There you have it. And I’m Johnny Radio that you’re talking to. But what’s the closest body of water to Dallas? I’m just curious.

JH: Well, we’ve got lots of good lakes that have wonderful boating. Come enjoy them all.

HH: I’m just telling you the freeway on and off ramps as well, that’s enough to lose a few delegates.

JH: I don’t think you can surf Cleveland, either, by the way.

HH: Oh, you can. Obviously, we need to treat you to the Lake. Okay, Mr. Chairman, a couple of quick things. A lot of us were disappointed you didn’t run for majority leader. Does your decision to pass that race by preclude you running for Speaker in the fall?

JH: I want to get through the next election. It is my hope and desire to be chairman of the House Financial Services committee in the next Congress. We’ll see what the future holds.

HH: But it doesn’t preclude it, does it?

JH: That’s my answer, Hugh, and I’m sticking to it.

HH: All right. Let’s go to Ex/Im. Today, just moments ago, Tom Donnelly, one of the most serious of all Defense analysts in America, wrote over at AEI. This just happened. You probably haven’t had a chance to read this, that not only should Ex/Im be reauthorized, it ought to be expanded to allow the sale to foreign governments of military equipment, because that’s what it used to do, and that’s what it’s best at. What do you think about that? Rather than killing off Ex/Im, you ought to expand it?

JH: Well, clearly I disagree. Number one, when you say kill it off, we’re talking about letting it expire and run off its current book. What I want to do is make sure that American manufacturers can be competitive, and our exporters can be competitive. But Hugh, there’s another way to do it besides using hard-earned taxpayer money and subsidizing what really proves to be, most of their book, is subsidizing large Fortune 100 and Fortune 500 companies. I mean, what we really need, and I hope you would agree, that we need fundamental tax reform. We have the highest corporate tax rate of any industrialized nation in the world. We are drowning in red tape. You, if we put on a regulatory freeze except for health and safety issues, I can assure you our exports, our manufacturing, would absolutely explode. Give me Keystone Pipeline, give me American energy independence, you know, bring down my liability costs, I think you get the idea. Just because somebody, just because France does something doesn’t really mean America ought to be doing it. It’s not smart, it’s not fair to be using taxpayer money, small businesses, single moms, sending it to China, sending it to Russia, sending it to the Congo in hopes that it benefits, ultimately, GE and Boeing.

HH: Now Mr. Chairman, even the CEO of Delta, who’s been like the number one enemy of Ex/Im, testified to you, I believe today, that he didn’t want to kill off Ex/Im, and that’s because Delta’s starting to get blowback from their passengers who also work for export-driven companies that will be deeply injured by the cessation of Ex/Im financing. Were you persuaded…

JH: Now how will they be deeply, number one, I think you know this, 98.6% of all U.S. exports don’t use Ex/Im. So it is a very small piece. So number one, to somehow make the case that U.S. exporting is going to be irreparably harmed is just a false assertion. Second of all, from the annual report of Ex/Im, their competitiveness report, the last copy I have, 5%, 5% of their transactions are designed to meet a countervailing subsidy of some other nation. 5% of their transaction. So people can say it, but you know, facts ought to mean something in the political debate. What you also would have heard, as you well know, Delta said, you’re hurting our jobs. This is costing Delta thousands of jobs.

HH: But didn’t he testify today that he doesn’t want you to end Ex/Im?

JH: No, what he, well, he said a couple of things. He said number one, he wants to solve the problem. He has his constituencies – his shareholders, his employees. He wants to make sure Ex/Im quits hurting Delta Airlines. If Ex/Im won’t quit hurting Delta Airlines, I think I heard him testify he wants Ex/Im to expire. As long as Ex/Im no longer hurts Delta Airlines, I think I heard him say he’d be happy to have it go on in perpetuity. But again, he’s there to protect his shareholders, his employees, and I understand that. And I respect that. But he is just one voice showing how that for practically speaking, if Ex/Im claims that they can create one job, quite often, they are destroying another American job in some other sector of the economy.

HH: Now I am actually shocked that the head of Delta is for injuring the Defense industrial base. That’s where I come down to. I want to play for you a little conversation I had yesterday with the Vice President.

JH: Well, I just missed that. What do you mean he’s for that?

HH: I’ll tell you in a second. This is Vice President Cheney talking with me yesterday about the Defense industrial base of the United States, which I think Ex/Im supports greatly. Cut number 10:

DC: When we get into a situation where we are dramatically reducing the Defense budget, spending more money on rapidly-increasing food stamps, and directly cutting the Defense budget when we’ve got an army with 40 brigades in it, but only four of them are combat ready, when we’re suspending programs…the A-10 is an airplane that’s been around a long time, but it turns out to be a great tank killer. It’s got a Gatling gun that fires depleted uranium rounds in the nose. When we did Desert Storm here some years ago, we killed as many tanks with that A-10 as we did with any other weapon system. When you talk about reducing the carriers, one of the things you’ve got to think about is the industrial base. You know, we don’t have a lot of yards around like we did in World War II where you can build aircraft carriers. We’re down to one. And if the workforce isn’t kept engaged in that, if we don’t crank one out every so often, then we end up in a situation where you gradually lose the industrial base. We’re down to one yard now that can build submarines. When you talk about going to 11 carriers, we’ve always operated pretty much based on 12 because of the cycle works. It takes six months for a deployments…

HH: So he goes on to talk about carriers. But the point is, Mr. Chairman, the U.S. aerospace industrial base, the U.S. space industrial base greatly benefit from Ex/Im. I don’t think anyone, you said facts are, should drive this thing. And I think you’ll agree with me Ex/Im primarily helps the space industrial base and the aerospace industrial base. We need that industrial base for the protection of this country. I can’t imagine any, and you’re a thoroughgoing hawk. That’s why I wanted you to run for majority leader, and why I’m hoping you’ll be our next Speaker. But I can’t imagine hurting Ex/Im in the world in which we live when we need Boeing and GE and all these other companies that benefit from it to be stronger.

JH: Well, again, Hugh, why don’t we increase the Defense budget? Instead of giving these companies taxpayer subsidies, why don’t we give them tax relief? Why don’t we have American energy independence? Again, I agree with you on the ultimate goal. I want a strong industrial base. I want a strong national defense. But why we should substitute the marketplace for political-driven lending of Ex/Im, I just don’t think it’s terribly effective. And frankly, I don’t think it’s terribly fair.

HH: Because…

JH: Let’s fight the President as he attempts to cut our national defense, is we’re on the trajectory, as you well know, to have the smallest army since World War II, the smallest navy since World War I.

HH: Well, we agree on all this. But the reality is the Ryan-Murray deal locked in this year, and the future years, what the Defense spending is unless we win the Senate. But right now, Ex/Im’s on the table, and the foreign military sales, Defense export loan guarantee program doesn’t work. And Frank Gaffney wrote a letter to the Washington Times on this. And you know, no one gets to be more hawkish than Frank, that the commercial sales of American aerospace manufacturers will suffer, and that will tremendously intensify pressures on our Defense industrial base, which is already severely afflicted by massive and reckless cuts in the Pentagon budget. So we’ve got about a minute to the break, and I hope you can stay, Mr. Chairman. There’s just no way around it. The reality is if you let Ex/Im expire, we are worse off on nationals security given the political realities of Democrats will not increase Defense spending.

JH: Well, elections have consequences, as we both know. And we have one coming in November. And let’s hope that we have a Senate to work with the House to actually engage this White House to give us the national defense we want. Again, let’s fight this in the national defense budget. Again, this is so much more, Hugh, than dealing with our Defense infrastructure. It’s so much more than that. There’s a better way and more efficient way to strengthen this vital segment of our economy.

HH: I hope you can stick around. I’ll try and keep Chairman Jeb Hensarling over the break, because I want to keep trying to persuade him. We need our Defense industry strong.

End of interview.

Transcript: Talent

HH: Joined now by former United States Senator Jim Talent. During the 2012 campaign, Senator Talent was senior Defense advisor to then-presidential candidate, former Massachusetts governor Mitt Romney. And it must be with no little irony that we watch the commentary from the left, Senator Talent, about President Obama’s failures in Iraq. You just must be continually reminded of what, of how the President blew off all of the criticisms of his Iraq policy that the Governor mounted in 2012.

JT: Yeah, the President said that the 80s called and they wanted their foreign policy back. Well, the 30s have called, and they want their foreign policy back from the Obama administration. I mean, that’s what we’re looking at. And Governor Romney was right about Iraq, too, although in fairness, we were all saying it. I mean, I think the failure to keep a robust presence of American troops in Iraq in a non-combat role was probably the single biggest mistake of the Obama administration, and we’re all paying for it now.

HH: Here is a clip from one of the Obama-Romney debates to set the stage for what we’re about to talk about, cut number five please:

MR: With regards to Iraq, you and I agreed, I believe, that there should have been a status of forces agreement.

BO: That’s not true.

MR: Oh, you didn’t? You didn’t want a status of forces agreement?

BO: No, what I would not have done is left 10,000 troops in Iraq that would tie us down. That certainly would not help us in the Middle East.

HH: So Jim Talent, the President spent all week, as did former Secretary of State Hillary Clinton, saying how it was Maliki’s fault we didn’t have a SOFA. But here he is in the debate telling Mitt Romney…

JT: Right.

HH: He didn’t want a SOFA.

JT: Right, the story’s changed. Well, he offered, at the time, he offered Maliki 5,000 troops, which wouldn’t even have been enough to do force protection, and insisted that Maliki get the Iraqi Parliament to approve, even though the Iraqis didn’t think they needed the Parliament’s approval. Well, this was a signal to Maliki that he wasn’t serious. And so now, they’re running for cover, because everybody can see the disaster that’s occurred. Look, if we’d had troops there, again, in a supportive role, probably Syria does not go down the way it goes down. I don’t know that the Iranians and the Russians intervene. I don’t know if they dare to do that. They certainly don’t have Iraqi cooperation. We could have discovered and supported the elements in Syria that might have established a moderate government. In any event, we could have sealed off the border with Syria and kept this from spreading to Iraq. And now, it may go to Jordan. And if that happens, I think the game’s about up.

HH: Now Senator Talent, earlier today, Syria bombed ISIS’ positions in Iraq. They killed dozens of civilians in the process of doing so. It’s not much of an air force that Syria has. And then late this afternoon, just really minutes ago, the New York Times posted a story, Iraqi security official said Wednesday that fighters with the Islamist State In Iraq And Syria, ISIS, were advancing on the Haditha Dam, the second-largest in Iraq, raising the possibility of catastrophic damage and flooding. At what point does this President feel obliged to go back in to stop this? It’s the world’s largest territory controlled by terrorists.

JT: Right.

HH: And as Lynne Cheney, the richest terrorist organization in the world, because they looted every bank between Kurdistan and the Syrian border.

JT: Yeah, and it’s now the biggest training camp for terrorists. And look, I mean, they’re terrorists that have foreign passports, you know, to the United Kingdom and the United States. They’re there and they’re doing all this killing, and then they go back home. Well, they’re not going to go work as a software programmer there. So our vital interests are involved in a number of ways. I don’t know what he does. I mean, this is so messed up, it’s so operationally fluid. People have called for air strikes. I don’t know how we target them. We have advisors there. So are these advisors going to be working with the Shia militia while they go out and butcher people? I mean, this is a mess. And I’m not sure what to do. We need to secure Jordan, give King Abdullah anything he asks. We need to help the Kurds in any way we can. And we need to try to figure out a way to seal this off.

HH: Now you’ve just said the two things which I think are the practicalities. We need to surge forces into Jordan and Kurdistan to the extent that they will allow it, and indeed open discussions with whomever replaces Maliki. And he can’t last after Sistani…Vice President Cheney was on the program with me yesterday, and for people just tuning in, that was quite the bracing conversation. The transcript’s over at www.hughhewitt.com. And he pointed out Sistani calling for Maliki is basically meaning Maliki will be gone. Whoever replaces Maliki…we’ve got to put American troops back in to the extent they will allow us to come, don’t you think?

JT: Well, the situation is so fluid that, and it’s so high risk, and I’m not certain after these last three years of Defense cuts, that we’re up to that, Hugh. I mean, I would really like a good briefing from the Pentagon and a realistic briefing about what we can and cannot do. So I mean, that’s a step I hesitate to take. I wrote a column about it, and I said it’s a very bad option. But I agree with you that it’s about the only option now that would allow us to reverse our fortunes on the ground. It just may be that the cost of doing it and the risk of doing it is too great, and that what we need to try and do is seal this off and work with the Jordanians, the Kurds, and maybe the Turks, and hope that a better alternative emerges.

HH: Now after the break, I want to ask you about something Vice President Cheney said yesterday. But briefly, in the two minutes we have left, and I don’t know the answer to this question. It’s always bad for litigators and radio talk show hosts not to have any idea. But earlier today, I argued Ex/Im bank with Jeb Hensarling, because I’m a big proponent of the Ex/Im bank, because it preserves the industrial bases of the United States, even though it can’t do explicit Defense purchases. What does Jim Talent think about the Ex/Im bank?

JT: You know, I think it needs to be considered on its merits and not so ideologically. I mean, this, we do live in a world where American businesses are being, are competing against countries that are supported by their governments. And sometimes, it’s appropriate for our government to provide some help. I do think there’s been some abuses. It’s been a long time since I studied it, Hugh. It’s not something I take an ideological approach to. I wouldn’t say well, it’s necessarily crony capitalism so you can’t do it. What I would say is look, who’s benefited from it, who are they competing against, what kind of support are they getting from their government. I do agree with you that we’ve got to do something for American manufacturing, because it’s declining in a lot of places. And it’s having to compete unfairly against a lot of businesses abroad.

HH: Sure, it helps Boeing, it helps GE, it helps Caterpillar, it helps a lot of big businesses.

JT: Right.

HH: But these big businesses are central to our Defense capability.

JT: And they also have a lot of subcontractors. You know, you help Boeing, you help a whole, you’re right, a whole Defense industrial base. So I don’t like the fact that the movement has approached this so ideologically. I mean, this to me should not be a litmus test. It should be a question of okay, are we helping businesses, is there a way of doing it better, and are they competing against companies that are being supported by governments abroad, and what do we do about it.

HH: Senator Talent, stick around to end today’s show with me, if you will. I want to play for you a clip from Vice President Cheney’s conversation with me yesterday, get your reaction.

—- – — –

HH: Senator Talent, I spent an hour with Dick Cheney on the air yesterday, and here is the sentence that he uttered that was heard round the media. It probably got replayed on more than a hundred different platforms across all sorts of media. Here’s what the Vice President said.

HH: Do you think we get through this decade without a massive attack on the homeland?

DC: I doubt it. I doubt it. I think there will be another attack. And the next time, I think it’s likely to be far deadlier than the last one. Imagine what would happen…

HH: Yeah.

DC: …if somebody could smuggle a nuclear device, put it in a shipping container, and drive it down the Beltway outside of Washington, D.C.

HH: Jim Talent, the Vice President is now known for alarmism. He’s very sober. He’s the most experience man probably in American government, excepting those who have been president. What do you make of that statement?

JT: Listen, in 2008, former Senator Bob Graham and I chaired a commission on bioterrorism. And we believed that the risk of a bio attack, which would be as deadly if not more so, I mean, it depends on how successful it was, that a nuclear attack was growing and would reach a probability within about five years we said at the time. You can’t allow these people to enhance their training bases, to recruit more and more people, to study the technology. The guy that runs al Qaeda now has a medical background. And he was the one in charge of their bio labs in Afghanistan. And expect that eventually, something is, that nothing will even happen that will hurt you. So I don’t blame Dick Cheney for being…there’s a whole lot of people in the Pentagon and in the intelligence community that have nightmares over this sort of thing. I mean, let’s just take, the Vice President mentioned nuclear. You could get, you could isolate anthrax. I mean, you can get that around the third world. If you have a bio lab, it costs $100,000. You get a very deadly form of a pathogen. You turn it into kind of a slurry. You get a pickup truck with a shell on the back and you get a paint sprayer, and then you drive around a big city on a summer night like we’ve got now when the winds are right, and you blow it up through the top of the shell. Nobody can see it, because it’s at night. I mean, Homeland Security’s modeled that. You can kill hundreds of thousands of people that way.

HH: And they’ve got, they just seized Mosul. They have an air base. They have money. This is what, we have a minute left. I don’t think the Obama administration is seriously understanding what’s going on here.

JT: Yeah, this is why I said it’s the worst mistake they’ve made, because what they want, as you know, I mean, what these al Qaeda and its offshoots, which is what ISIS is, they wanted to control actual states, okay, and have the resources of states behind them. And they’ve got one now. And now what its territory will be, how stable it will be, I don’t know. But they’ve got a caliphate now, or a state, anyway, in the Levant. And they have money. And that increases the danger. And if the danger goes up and up, eventually, it’s realized. And that’s what the Vice President was saying, and I share his concern.

HH: Senator Jim Talent, it’s always good to talk with you. Thanks for spending time with us today.

End of interview.

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