Buy America is commonsense economics

Let’s try an experiment. Head over to your next-door neighbor’s, knock on the door and ask them this question:

Do you think infrastructure projects, paid for by the taxpayer, should use American-made goods whenever possible?

Now, ask them another:

Would you want your tax dollars shipped to another country to buy goods if those goods are already made in America at a comparable price and quality?

I bet you already know the answers you’d get. But just in case you’re uncertain, there are years of polling data that show what people think of these preferences for federal infrastructure spending — often called Buy America preferences.

The vast majority of us think they’re a very good idea.

The logic behind Buy America is straightforward and fair: Money spent on federal projects — or on massive infrastructure programs — should not go to firms overseas if cost-competitive and quality goods are available at home.

By guaranteeing that when our government repairs an old highway or builds a new bridge it looks to domestic manufacturers first, these preferences promote homegrown economic activity.

Buy America laws harmonize our government procurement policies with our regulatory policies. American manufacturers must contend with the world’s most strident regulatory regimes. But U.S. environmental laws and regulations and workplace safety mandates do not have extraterritorial application. The regulatory burdens we’ve placed on U.S. manufacturers are not faced by their competitors across the globe. When we utilize taxpayer dollars to invest in public infrastructure, U.S. manufacturers deserve a commonsense preference for meeting — not avoiding — these standards and for keeping jobs here in the United States.

Put simply, Buy America policies applied to taxpayer spending translate into more jobs in America. And more jobs at home mean a bigger tax base and a smaller burden on the social safety net.

It’s commonsense economic policy, but some claim otherwise. They argue Buy America is a regulatory hassle, wasteful and discriminatory.

Well, here are a few things Buy America doesn’t do:

•It doesn’t apply to private commercial transactions. We’re talking about taxpayer-financed infrastructure investment, after all.

•Buy America laws do not apply to all federal-aid spending or to all spending on public works infrastructure. In fact, these laws only apply to a fraction of all federal-aid infrastructure spending. Billions of U.S. tax dollars are spent annually through federal assistance programs that are subject to no domestic procurement preference laws at all.

•It doesn’t force the government to buy unreasonably expensive goods. A Buy America preference is just that — a preference. If the American-made alternative costs too much or if there isn’t enough of it, the preference is waived.

•It doesn’t increase costs in the long term. For instance, the federal government included a Buy America preference in the 2009 American Recovery and Reinvestment Act. A year later, the Government Accountability Office (GAO) testified to Congress that it found materials costs on the stimulus-funded projects were less than anticipated.

•And it doesn’t start trade wars. The general rule under international trade law is that a country may prefer its own nation’s goods in government procurement. Rules for local purchasing in public projects exist all over the globe.

Despite some rhetoric that may give an impression otherwise, the United States has one of the most open government procurement markets in the world. A recent GAO report noted that the United States has opened twice as much of its government procurements to foreign firms than has the next five largest parties to the World Trade Organization Government Procurement Agreement combined (the EU, Japan, South Korea, Norway and Canada) even though total U.S. procurement is less.

It’s not always easy to do business here. There are high labor costs, environmental standards and a regulatory burden to consider. Yet in spite of that, the United States has some of the most competitive companies and productive workers in the world. Improved Buy America rules for federal infrastructure spending makes sure the public’s money rewards our domestic companies’ efforts instead of rewarding foreign companies or outsourcers.

You want the government to spend our money wisely? Push it to Buy America.

• Scott Paul is President of the Alliance for American Manufacturing.