06 Aug ‘Buy America’ Was a Bad Idea Last Century. It’s a Worse One Now.
Far from modernizing the economy, recycling these old rules in the new infrastructure plan won’t create more jobs or make the U.S. more competitive.
The infrastructure bill moving through the Senate takes more than 2,700 pages to lay out $1 trillion in spending. Many aspects of the plan will be popular. Americans love infrastructure; who doesn’t want nicer airports, roads, bridges, clean drinking water and access to cheap broadband? In theory at least, we not only enjoy better infrastructure, it’s an investment in our future — making the country safer, more resilient and boosting growth. But many of the potential economic benefits will be undermined by the nearly 60 pages of the bill dedicated to “Build American, Buy America.”
Buy America requirements have been around since the Great Depression and are often a feature in U.S. infrastructure plans. They require that government-funded projects use domestically produced materials and are completed by American firms with American workers. This latest incarnation is similar to others before it. There are, of course, many pages of exceptions: for instance, if it costs 25% more to use U.S. steel, foreign steel can be substituted. But there are costs to obtaining such an exception, and it can be an unpredictable, slow and expensive process.
Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
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