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Senior Republicans Hold Roundtable; Point to Job Loss Created by Careless Buy American Expansion

October 08, 2009

Ways and Means Trade Subcommittee Ranking Member Kevin Brady (R-TX) and Representatives Charles Boustany (R-LA), David Dreier (R-CA), Wally Herger (R-CA) and Dave Reichert (R-WA) commented on the “Buy American” obligations in the stimulus, which appear to be having a clogging, rather than priming, effect on U.S. economic recovery:

“In this economy, where every job matters, it’s essential lawmakers examine the consequences of the expanded ‘Buy American’ language which was hastily inserted in the stimulus bill and rushed through Congress without a thoughtful, bipartisan review,” said Brady. “This public roundtable is prompted by published reports that this provision has delayed critical stimulus projects, increased costs to local and state entities, and invited retaliation by foreign governments that could impair the ability of American companies to sell their products and services.  It appears this provision, while popular, has proven problematic and job damaging rather than job creating,” Brady continued.  “There’s a reasonable solution here, which is for OMB to issue final guidance that exempts states and localities from these onerous provisions,” he concluded.

“Government contracts that support good-paying Aerican jobs and keep American small businesses afloat often involve at least a minor amount of foreign activity,” said Boustany.  “That some of those contracts are now endangered, rather than secured, by these ‘Buy American’ provisions runs counter to the stated goals of the stimulus bill and other recent efforts by the federal government – namely, to save and create American jobs and to extend a lifeline to American businesses until the economy turns around,” said Boustany.

“There is broad diversity of opinion on the issue of ‘Buy American’, but there can be no question that the provisions in the so-called stimulus bill were so poorly crafted that they are having precisely the opposite effect of the stated goal of the stimulus – they are slowing and even halting projects, increasing costs and shutting out American companies from the bidding process. They are also inviting retaliation from our closest trading partners, which hurts American exports and threatens American jobs. This is just one example of the unintended consequences when legislation is rushed to a vote without proper scrutiny,” said Dreier.

“It’s not very surprising that the ‘Buy American’ provisions included in the so-called stimulus have been counterproductive and slowed economic recovery.  Although these provisions are well intentioned, they are taking a toll on U.S. companies, putting jobs at risk and increasing costs to taxpayers by piling on unnecessary project delays. I’m hopeful that Congress will recognize these concerns and avoid enacting measures in the future that undermine the competitiveness of U.S. businesses and workers by restricting trade.  We could do significantly more to foster economic growth and create jobs through opening markets to U.S. goods and services than by trying to keep foreign products out,” said Herger.

“Buying locally is important, and when trade policy is crafted right, we can help American businesses compete in the global economy,” said Reichert. “But ‘Buy American’ provisions hastily crafted in the stimulus bill can strain relationships with important partners like Canada and cost American jobs, as U.S. companies with global supply chains are excluded from federal projects.  Opening new markets to trade is a stimulus that must not be overlooked. Free trade plays a vital role in growing our economy and creating jobs, and we must continue to promote and support policies that allow our business to thrive and grow in a global economy.”