This morning House Democrats introduced 'Buy America' legislation to make sure taxpayer money that is used for transportation purposes gets used to support U.S. manufacturing and create American jobs. The 'Invest in American Jobs Act of 2013' will strengthen Buy America preferences, close loopholes, and improve transparency in the federal waiver process.
U.S. Representative Nick J. Rahall (D-WV), top Democrat on the House Transportation and Infrastructure Committee was joined by several representatives to introduce 'Invest in American Jobs Act of 2013.' The bill:
- Strengthens existing Buy America requirements for investments in highway, bridge, public transit, rail, and aviation infrastructure and equipment to ensure that all of the steel, iron, and manufactured goods used in these projects is produced in the United States;
- Increases domestic content requirements for public transit rolling stock and Federally procured aviation facilities and equipment, from 60 percent under current law to 100 percent by FY 2017;
- Applies Buy America requirements to other transportation and infrastructure investment where such requirements do not exist in current law, including rail infrastructure grants, loans, and loan guarantees, Clean Water State
- Revolving Fund grants, and Economic Development Administration (EDA) grants; and
- Requires Federal agencies to justify any proposed waiver of the Buy America requirements and ensures that the American public has notice of and an opportunity to comment on any proposed waiver prior to it taking effect.
Rep. Rahall was joined by:
- Rep. Peter A. DeFazio (D-OR), Ranking Member, Subcommittee on Highways and Transit
- Rep. Corrine Brown (D-FL), Ranking Member, Subcommittee on Railroads, Pipelines and Hazardous Materials
- Rep. Timothy H. Bishop (D-NY), Ranking Member, Subcommittee on Water Resources and Environment
- Del. Eleanor Holmes Norton (D-DC), Ranking Member, Subcommittee on Economic Development, Public Buildings and Emergency Management
- Rep. John Garamendi, (D-CA) Ranking Member, Subcommittee on Coast Guard and Maritime Transportation
- Mr. Leo Gerard, President of the United Steelworkers (USW)
- Mr. Scott Paul, President of the Alliance for American Manufacturing (AAM)
USW's Leo Gerard said,
"The United Steelworkers urge all U.S. House members to stand with us and support 'The Invest in American Jobs Act of 2013' to spur job creation in the U.S. and foster domestic manufacturing."
Gerard said the bill also applies to investments like rail and water infrastructure. USW's endorsement letter is available here.
AAM's Scott Paul said the 'Invest in American Jobs Act of 2013' stresses universal coverage for Buy America preferences, saying,
"Our Buy America laws ensure that hard-earned tax dollars support good, quality jobs right here at home. But loopholes and exemptions have weakened these laws over time, allowing more of the public’s money to be sent overseas to purchase steel and manufactured goods from countries like China."
AAM provides some numbers to back up that this bill will help American companies and create jobs:
According to polling conducted for AAM in 2012, 87 percent of voters support policies to ensure that taxpayer-funded projects use American-made goods and materials, with virtually identical support from Republicans, Democrats, and Independents.
Additionally, research conducted by the University of Massachusetts – Amherst (PERI) found that maximizing domestic content in public works projects can increase manufacturing job gains by 33 percent.
Congresswoman Cheri Bustos (D-IL) weighed in,
“I’m proud to help introduce a bill that would create jobs here in America and make sure our roads, bridges, tunnels and rail lines are stamped ‘Made in the USA,’ said Congresswoman Cheri Bustos. “For far too long, American workers have seen their jobs shipped overseas to countries like China. This bill will make sure that the rebuilding of our transportation networks and infrastructure is through the hard work of American workers in places like the Quad Cities, Peoria, Rockford and elsewhere across Illinois.”
Why Buy America?
Why is it so important to legislate that taxpayer dollars Buy America when they can? Because "saving money" buy offshoring actually costs more than it saves. In last year's Should Be Made In America!, I explained,
We need to rebuild our country, and we need to do it with steel and supplies that are made in America. It actually costs taxpayers more to “save money” by outsourcing then it saves because of the “safety net” costs from lost jobs and factories.
...The SF Bay Bridge
Under Governor Arnold Schwarzenegger California turned to China for the steel in the new Bay Bridge between San Francisco and Oakland. The argument for purchasing Chinese steel was that it would “save money,” but when the costs to other state and federal government agencies as well as to the larger economy are added up, the costs to taxpayers are much more than the savings.
This outsourcing cost of thousands of American manufacturing jobs (3.5 million man-hours), which meant :
- loss of state and federal tax revenue from taxes on the wages and taxes of the workers and taxes on the companies that employed them,
- outgoing cost of unemployment benefits, food stamps and other “safety net” programs,
- cost of resulting foreclosures,
- the “ripple effect” economic costs of all these lost jobs — lost sales at stores, restaurants, gas stations, etc.,
loss of worker training and in-country manufacturing infrastructure.
- Although the federal government has “Buy America” preferences requiring American-made materials in procurement, the state of California got around these requirements by refusing federal funding and financing the project with state funds.
There was one more BIG cost:
In addition to “safety net” cost and loss of tax revenue, there is a competitive cost when taxpayer dollars are used to purchase major components of infrastructure projects. The Chinese company that was selected to provide the steel for the Bay Bridge did not yet have the manufacturing ability to make the components. Our taxpayer dollars built the new facilities for them, and now they can bid against American companies for more projects!
So this Buy America bill is a very important component of recovery.
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