The Cincinnati-based operating unit of General Electric Co. employs more than 9,000 people in Ohio, spends $1.2 billion a year with state suppliers and garners almost 60 percent of its revenue from international sales supported by the U.S. Export-Import Bank. Yet Kasich, who’s considering a Republican presidential run, opposes the agency as “corporate welfare.”
GE Aviation contacted Kasich twice during the past 10 months seeking an endorsement of the bank, spokesman Rick Kennedy said. After the governor spoke against it last month, two company executives held a conference call with members of his staff and his development agency to express their surprise and to “educate.”
Congress faces a June 30 deadline to reauthorize the 81-year-old bank, which helps foreign companies buy U.S. goods with taxpayer-backed loans and which was routinely renewed in the past. Republican candidates now face a choice of whom to anger: business allies who say killing the agency would hurt exports and jobs or ideologically driven Tea Party voters who deride “crony capitalism.”
“This issue has become politicized to the point where the facts are sacrificed,” David Joyce, chief executive officer of GE Aviation, wrote last month in the Cincinnati Enquirer.
When Kasich was in Congress, he voted to reauthorize the bank. That was before the need to fix a broken system and give companies a better opportunity to compete, Kasich said. Opponents say the bank uses taxpayer-backed assistance to disproportionately benefit large corporations and that it interferes with the free market.
“Any time anybody has a subsidy, they want to keep it,” Kasich said in an interview. “I love GE, they’ve been great in Ohio, but I think they can figure their way around this.”
The only Republican candidates who have publicly supported the bank are Senator Lindsey Graham of South Carolina and former Senator Rick Santorum of Pennsylvania. Graham has highlighted the bank’s impact on Boeing Co., which builds the 787 Dreamliner in North Charleston and is its largest beneficiary. Santorum, who has made restoring manufacturing a focus, says the institution is critical.
Among Democratic candidates, Hillary Clinton and former Maryland Governor Martin O’Malley support reauthorization. Senator Bernie Sanders of Vermont opposes “rewarding companies that are outsourcing jobs overseas,” spokesman Warren Gunnels said.
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The pendulum of opinion has swung against government-granted privileges for corporations, said Veronique de Rugy, a libertarian who is a senior research fellow at the Mercatus Center at George Mason University in Virginia, which studies market-oriented ideas.
“Cronyism is not hip anymore,” she said. “If you stand for cronyism, you’re doing it at your own political risk in a way that wasn’t true even three years ago.”
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