February 01, 2009 05:24 PM UTC

Battling Over "Buy American"

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• by: Colorado Pols

A key point of debate is emerging in the U.S. Senate as it prepares to take up the federal economic stimulus package, over a proposed requirement that U.S.-made raw materials be used on infrastructure projects paid for with stimulus funds. As the Pueblo Chieftain reports:

Last week, House Democrats approved an $819 billion package of federal spending that included a special clause for the U.S. steel industry – all the road and public building projects paid for by the legislation would have to use steel made in U.S. mills. That “Buy American” amendment came from Rep. Pete Visclosky, D-Ind., but it got near unanimous support in the House Appropriations Committee and drew almost no criticism in the House debate as Republicans and Democrats argued over other issues.

That won’t be the case in the Senate, where Democrats have put an even bigger “Buy American” requirement in their preliminary version of the bill. As it currently stands, the Senate bill would require that all materials used in the infrastructure projects be U.S.-made.

For steelmakers, such as Evraz Rocky Mountain Steel Mills in Pueblo, the legislation could be a boon from Congress. U.S. mills are only operating at roughly 45 percent capacity and thousands of steelworkers have been furloughed across the nation in the past six months, including in Pueblo…

From the point of view of a furloughed Pueblo steelworker, it’s a no-brainer. Nevertheless,

…a list of U.S. manufacturers are lining up against the “Buy American” requirement. They include the heavy-equipment maker Caterpillar, as well as General Electric and aerospace firms. Those companies are lobbying Congress to block the steel clause and other domestic-only requirements, claiming foreign nations will retaliate against U.S. companies selling products overseas. More than half of Caterpillar’s sales last year were overseas, according to company officials.

For Colorado’s freshman senators, the debate will put them in the middle of a fight over trade policy.

Sen. Michael Bennet, a Democrat, is only days into his first elected office. He was favoring the Buy American provision as of last week.

“Senator Bennet supports this provision in the context of this recovery plan, which is designed to create American jobs and jump start the American economy,” a spokesman said.

Sen. Mark Udall is a little more cautious (per usual, get used to it) according to the Chieftain, declining to specifically use the word “support” in reference to the “Buy American” provision in the stimulus package but clearly sympathetic to its aims: “the people of Pueblo know firsthand what can happen when we send our money and our work overseas.”

We don’t see the “Buy American” provision in the stimulus bill as particularly controversial, or even incompatible with the general shift toward liberalized global trade that has prevailed for the last few decades. After all, the point of the stimulus package is to benefit the American economy, isn’t it? And it’s not like they want to slap restrictions on all such imported goods, just things purchased with federal stimulus dollars for taxpayer-funded stimulus projects. That being the case, certainly a requirement that this special emergency burst of money buy U.S.-made materials makes sense, and should make sense even to those who wouldn’t tolerate the same restrictions on the rest of the economy.

We’d also point out that politically, especially in the present climate, a little protection(ism) of American jobs is a pretty tough issue to agit-prop voters against somebody with. It won’t, to paraphrase Dick Wadhams, make for very compelling 30-second suppositories.