Obama defends Solyndra loan, swipes at GOP ‘defeatism’

President Obama defended the Energy Department loan program that backed the now-bankrupt and beleaguered solar equipment maker Solyndra and didn’t miss a chance to take a swipe at Republicans investigating the program.

Obama said the program, started under the Bush administration but beefed up with funds from the stimulus act, was meant to provide nascent clean technology companies in the U.S. with the kind of support the Chinese and European governments give to their native enterprises. Subsidies by the Chinese in particular led to a crash in prices for solar equipment, which contributed to the bankruptcy of several American solar companies, including Solyndra.

The Energy Department program was designed to get companies through the so-called Valley of Death, industry analysts said -- the period between when someone comes up with a great idea and manages to manufacture a product on a commercial scale. Solyndra got $535 million loan guarantee in 2009, but was faltering by late 2010. By early September this year, it had closed its doors, laid off almost all of its 1,100 workers, filed for Chapter 11 bankruptcy and become the target of FBI and congressional investigations.

“The Loan Guarantee Program is designed to meet a particular need in the marketplace, which is -- a lot of these small startups, they can get angel investors and they can get several million dollars to get a company going,” Obama said at a wide-ranging news conference Thursday. “But it’s very hard for them to then scale up, particularly if these are new cutting-edge technologies. It’s hard for them to find private investors. And part of what’s happening is China and Europe, other countries, are putting enormous subsidies into these companies.”

Obama’s comments echoed those he had made this week in an interview with ABC News and Yahoo, during which he said that lending to start-ups is inherently risky and that other loan recipients are still afloat.

Since the ABC interview, the congressman spearheading the Solyndra investigations on the House Energy and Commerce Committee, Rep. Cliff Stearns (R-Fla.), told NPR that he didn’t believe in subsidies for any industries, adding, “We can’t compete with China to make solar panels and wind turbines.”

Democrats have been howling about what they call Stearns’ “defeatism,” and Obama, without naming Stearns, had his say today too.

“I heard there was a Republican member of Congress who’s engaging in oversight on this. And despite the fact that all of them in the past have been supportive of this loan guarantee program, he concluded, you know what, we can’t compete against China when it comes to solar energy,” Obama said. “Well, you know what? I don’t buy that. I’m not going to surrender to other countries’ technological leads that could end up determining whether or not we’re building a strong middle class in his country.

“And there are going to be times where it doesn’t work out. But I’m not going to cave to the competition when they are heavily subsidizing all these industries.”