Source: Blog – Alliance for American Manufacturing
California officials didn’t abide by Buy America to build the San Francisco Oakland Bay Bridge, pictured above. It went at least $5 billion over budget, was completed 10 years late, and has continued to need repairs due to safety concerns. The Build America, Buy America legislation passed by Congress in 2021 aims to avoid such boondoggles in the future. Getty Images
A House Transportation and Infrastructure subcommittee is set to examine Buy America at a hearing on Thursday morning.
When Congress passed a major infrastructure investment bill back in 2021, it made sure to include legislation called the Build America, Buy America Act, or BABA for short.
BABA aims to expand coverage of Buy America preferences for infrastructure projects across all federal departments and agencies. Before BABA, Buy America previously only applied to a handful of programs, mostly within the Department of Transportation.
Unless you are brand new here — and if so, welcome! — you probably already know that the Alliance for American Manufacturing is a big proponent of Buy America. It’s smart policy that directs taxpayer money to be reinvested right back into American workers, manufacturers, and communities. At the same time, it sends a signal to the market, encouraging more domestic production of the critical materials and products our country needs.
BABA’s passage was a major step forward for expanding Buy America. But there have been roadblocks in its implementation — and Members of Congress may just hear about some of them on Thursday, when the House Transportation and Infrastructure Subcommittee on Highways and Transit is slated to hold a hearing titled, “Implementation of Buy America Provisions: Stakeholder Perspectives.”
Among those set to testify at Thursday’s hearing is Megan Salrin, a legislative representative for the United Steelworkers (USW) union. In her written testimony, Salrin notes that despite BABA’s passage, “much of our public infrastructure spending continues to be completed absent major elements of the domestic content preference policy” because the Department of Transportation “has issued multiple waivers and policy interpretations delaying implementation.”
Salrin continues:
“More than two years have elapsed since the enactment of IIJA, yet DOT has not fully implemented BABA. As the statutory implementation deadline of May 14, 2022, approached, DOT issued a series of general waivers that delayed the process. Consequently, billions of federal assistance dollars – including IIJA funded projects – have been expended across numerous infrastructure projects without key provisions of the BABA law being enforced.”
To be clear, the Biden administration deserves credit for taking strides for its support of BABA. Indeed, what’s especially frustrating about these implementation delays is where BABA has been applied, it has done its job.
Take electric vehicle chargers, which will be a critical piece of infrastructure as the United States transitions to electric vehicles. The Department of Transportation proactively applied Buy America to EV chargers, which has helped spur domestic construction of dozens of factories to build more of them. Companies have announced plans to make at least 1 million EV chargers each year, including 60,000 fast chargers, according to the Department of Energy.
BABA’s passage spurred factory growth in other sectors, too. Corning has announced hundreds of new jobs at a planned fiber optic factory in Arizona, which the company said it will build as a direct result of Buy America preferences. Meanwhile, Hornell Alstrom increased production at its rail car factory in New York thanks to BABA’s inclusion in the infrastructure law.
Salrin notes in her written testimony that part of the problem with BABA’s implementation is that the Department of Transportation and others have issued too many general waivers to Buy America, many of “which significantly restrict or entirely eliminate the application of Buy America provisions across various product categories, entire programs, and even agencies. These broad waivers ignore domestic workers who already produce Buy America-compliant goods and materials within the United States.”
Federal agencies should instead aim to apply Buy America as much as possible, issuing waivers on a product-only basis, Salrin argues:
“General waivers undermine the market signals crucial for stimulating investments in U.S. factories created by Buy America policies. Instead of utilizing general waivers, BABA directs departments and agencies to rely on product-specific, time-limited waivers. A targeted approach to waivers, accompanied by full transparency for the public, offers clear market signals essential for investors and manufacturers to confidently make substantial capital investments in domestic production capacity.”
In her written testimony, Salrin also encouraged officials to be transparent about potential waivers, including via use of the new MadeinAmerica.gov website, along with collaborating with federal agencies that work to encourage and support domestic manufacturers like the Manufacturing Extension Partnership. She also warned that the Department of Transportation and others should avoid creating new loopholes and avoid shifting origin standards for manufactured products.
BABA also needs to be applied prior to other procurement preferences, like Buy Clean, Salrin writes.
“At its core, Buy Clean policies are competitiveness policies birthed from the problem of Chinese steel in the California Bay Bridge, and aimed at ensuring that U.S. workers are making the materials used in our infrastructure projects,” Salrin argues. “As FHWA implements these provisions, they must utilize global industry averages for emissions and bifurcate emissions standards for steel, just as the General Services Administration (GSA) did in their Buy Clean pilot, to ensure that no U.S.-based process for production is advantaged over another U.S. based process for production.”
We’ll be watching the hearing on Thursday, and we’ll continue to advocate for the full and proper implementation of BABA.
“[T]he decimation of our nation’s industrial sector through bad tax, trade, and procurement policies has resulted in fragile supply chains and a dangerous reliance on unreliable or potentially hostile foreign manufacturers,” Salrin writes. “The purchasing power of the U.S. federal government and the federal financial assistance that it delivers for infrastructure and other purposes has the potential to grow domestic job creation and U.S. manufacturing capabilities… Buy America policies are an important tool to ensure that taxpayer dollars support domestic manufacturing jobs and responsible manufacturing practices, not corporations that outsource production to countries with weak labor and environmental standards that too often are ignored.”
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