One of the most controversial measures in the soon-to-be-law American Recovery and Reinvestment Act of 2009 has nothing to do with tax cuts, earmarks or CEO pay caps. But the inclusion of one little sentence has set off a firestorm of complaints all over the world. The sentence?
None of the funds appropriated or otherwise made available by this Act may be used for a project for the construction, alteration, maintenance, or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.
Who knew that we even had manufacturing in the US anymore? Certainly not this girl who moved from rural North Carolina, where her father’s job was more or less shipped to Mexico, to Philadelphia, where once bustling warehouses, now empty, line the streets of North Philly…
But apparently we do. (Where? Pittsburgh? Detroit? I just don’t see it.)
And we’ve decided it’s that important that we want to slap a “Buy American” on the stimulus package.
A move to kick start prosperity – or a recipe for disaster?
Gary Shapiro, president of the Consumer Electronics Association, thinks it’s the latter: “The ‘Buy American’ provisions … will signal to our trading partners around the world that the United States is returning to the bad old days of protectionism and economic nationalism.” (You can read his entire statement here.)
The bill still requires that the US act in a manner consistent with existing trade pacts, a measure that was pushed by President Obama. This means that the countries that we like (Canada, those in the European Union and Japan, to name a few) may still get a share of the new infrastructure projects. But those countries that we don’t like do not have a trade pact with, such as China, India and Russia, get nothing.
Proponents argue that it’s just common sense to require American projects to be built with American goods – especially if those projects are being support with taxpayer dollars. But opponents argue that the measure will make projects more time consuming and more expensive (estimates are that the final costs will be at least 25% more expensive with the “Buy American” provisions), which will penalize taxpayers.
It’s an interesting question, for sure, and one we’ve tackled on the blog before. You may remember that last year, I challenged my readers to think about how they spent their day and to make a note of which products they used and where those products were made. It was so much fun, I’m doing it again!
So again, I’d love for you to play along. Throughout your day, if you see a “Made in…” label, please stop by and leave a note in the comments.
I am anxious to see how much of our purchases are American…
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