President Biden’s $1.2 trillion infrastructure package is being pitched as a win for the domestic economy, but an obscure line within the 2,702-page bill could increase the offshoring of American jobs.
Mr. Biden’s bill proposes the largest-ever federal investment in infrastructure, focusing mainly on upgrading the nation’s roads and bridges. The legislation also seeks to make good on Mr. Biden’s campaign pledge of restoring the “Made in America” brand.
As such, the bill requires federal agencies to prohibit new funding for infrastructure “unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.”
The bill, however, also includes a massive carveout allowing federal agency heads to waive that mandate.
Federal bureaucrats are granted wide discretion when granting the waivers, especially if they determine that relying on American-made goods and resources “would be inconsistent with the public interest.”
Other reasons for granting a waiver include an insufficient domestic supply of construction materials or a determination that buying American will “increase the cost of the overall project by more than 25 percent.”
For years such waivers have allowed the government and federal contractors to skirt “buy American” provisions mandated by law.
During his tenure in the White House, former President Trump attempted to tighten such loopholes via executive order.
The GOP’s embrace of “America First” economic policies forced Mr. Biden and Democrats to run on the issue during the 2020 election. Mr. Biden, in particular, proposed a wide-sweeping agenda to ensure “the future is made in all of America.”
That agenda was anchored around a $400 billion “Buy American” federal procurement program, on top of a $300 billion investment in domestic research and development programs.
Last week, Mr. Biden expanded on the policy by raising requirements for products purchased with taxpayer money. Currently, the federal government allows agencies to skirt the requirements provided that at least 55% of an item’s “component parts” are manufactured in the U.S.
Mr. Biden is proposing to immediately raise the threshold to 60%, with the eventual goal being 75% by 2029.
“In recent years, ‘Buy American’ has become a hollow promise,” the president said recently. “My administration is going to make ‘Buy American’ a reality.”
Republicans, though, say the White House is not serious about the issue, as evidenced by its infrastructure bill.