General Electric Chief Executive Jeffrey Immelt on Monday defended the U.S. Export-Import Bank against charges the export-facilitating lender is corporate welfare and should be shut down.
It's not really corporate welfare to put us on the same playing field that our global competitors are on, Immelt said during a panel discussion on the future of American manufacturing with Boeing Chairman Jim McNerney and Dow Chemical Chairman Andrew Liveris.
The Export-Import Bank is facing a tough reauthorization fight in Congress.
Immelt, who also heads an outside economic advisory council for President Barack Obama, said the United States needed the nearly 80-year-old bank to compete against the European Union and China in global markets for aircraft and other products.
If you're trying to sell a Boeing 737 MAX with GE engines in Africa, you've got (to compete against) a fully subsidized European superstructure and Chinese bank financing ... I think things like Exim are ways that we can level the playing field, Immelt said.
The conservative Republican group, Club for Growth, which is influential with members of the Tea Party movement, has called on Congress to kill Eximbank, which provides direct loans, credit guarantees and other financial instruments to support U.S. exports.
The Export-Import Bank is a prime example of corporate welfare that should have been eliminated years ago, Club for Growth President Chris Chocola said on January 31. By picking winners and losers, politicians and bureaucrats are distorting trade flows. It's time to end the Eximbank for good.
The bank has played an increasing role in supporting U.S. exports since Obama took office.
That's largely due to the lingering effects of the global financial crisis, which dried up other sources of export financing. But Obama's goal of doubling exports in five years has also increased the bank's activity.
After two back-to-back record years, Eximbank's total credit exposure is now more than $90 billion, close to the $100 billion limit set by Congress.
Some lawmakers want to increase the exposure cap to around $135 billion as part of the bank's proposed reauthorization.
In a letter last week to congressional leaders, the National Association of Manufacturers said it was vital that Eximbank be reauthorized for four more years before its current short-term extension expires on May 31.
The Eximbank is the only tool American manufacturers have to counter the huge sums of export financing - many hundreds of billions of dollars - that other governments provide their exporters, NAM Vice President Frank Vargo said. If American manufacturers lose access to the Eximbank, our ability to compete globally will be severely curtailed.
(Reporting By Doug Palmer; Editing by Cynthia Osterman)
(This story corrects company name in headline to GE from GM)