"Buy American" fears overblown

To the overwhelming majority of Americans, the wisdom of requiring the government to “Buy American” is so obvious that it borders on the self-evident. After all, even in the best of times, why should our tax dollars go to support workers and businesses in other countries?

To a relative few, however, the words “Buy American” conjure up lurid visions of export-killing trade wars.

Over the years, this minority has repeatedly carried the day, squashing efforts to eliminate loopholes in existing “Buy American” laws that are big enough to drive a truckload of Chinese steel through. In February, for instance, lawmakers refused to add to the stimulus bill a strong, flexible, and entirely reasonable “Buy American” amendment that I offered.

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But the fears voiced by opponents of “Buy American” legislation – the loudest of which are a handful of multinational corporations – are overblown, and their nightmare scenarios won’t come to pass. Instead, improved “Buy American” laws promise to create desperately needed jobs for out-of-work Americans at a time of record unemployment.

Today, with Congress developing a jobs bill, we have another opportunity to make sure the public’s money helps workers here at home, instead of in China and other foreign nations. In order to deliver the biggest bang for the taxpayers’ buck, this bill must focus on providing funding for critical transportation and infrastructure projects, and make sure they are built with American steel, concrete, and equipment. We can’t afford to repeat the errors made with the stimulus bill, which I did not vote for, and which has helped Chinese companies to build turbines for a wind-farm in Texas and paid for Canadian man-hole covers while American foundries lay off workers.

The Buy American provisions that were included in the jobs bill that passed the House on Wednesday are a good start, but more needs to be done. That’s why, this week, I introduced a bill together with Senator Russ Feingold that will make numerous improvements to the Buy American Act of 1933. While maintaining exceptions for cases when domestic alternatives do not exist or are excessively costly, this legislation will eliminate gaping loopholes and add rigorous disclosure requirements to prevent the unnecessary purchase of foreign goods.

Contrary to what some claim, “Buy American” is not about new tariffs or trade barriers. Nor is it a new concept. In addition to the original 1933 law, the “Buy America” provisions of the Surface Transportation Act of 1982 have been on the books since President Reagan signed them into law. The problem is that these laws aren’t as effective as they should be.

For instance, it is simply too easy for government agencies to get a waiver to allow them to purchase foreign goods. In 2007, the DOD issued 14,159 waivers for almost $6 billion in goods. During Congressional hearings on the 2004 Defense Authorization Bill, we learned that the Department of Defense routinely waived “Buy American” requirements for titanium for aerospace projects without bothering to look for domestic suppliers. 

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To keep the public informed and give American businesses a fighting chance to receive federal contracts, we should require that waiver requests be posted online with time for public comment; that the government publicly justify in writing any waivers it grants; and that the government report annually on its spending on foreign and domestic products and its use of waiver provisions.

In addition, we should enact a variety of reforms to prevent existing “Buy American” requirements from being undermined. Such reforms include defining “American-made” as at least 75 percent American-made; preventing projects from being split up to avoid domestic sourcing; stopping public interest waivers from being issued after bids have been solicited; and establishing that the creation of American jobs is always in the public interest.

These changes won’t violate any of America’s existing trade obligations. All they will do is ensure that when it comes to “Buy American,” the letter of the law doesn’t undermine its spirit. Like most Americans, I don’t think that’s too much to ask.


Daniel Lipinski is a Democratic Congressman from Illinois