The commander-in-chief unveils new Buy American rules designed to boost American manufacturing and create good-paying jobs.
President Biden traveled to Macungie, Pa., on Wednesday afternoon to officially unveil a new proposed rule designed to strengthen Buy American, with the goal of ensuring that when the federal government spends taxpayer money, it will benefit American workers and businesses.
“It has been a long time since the federal government worked hard for working class people,” Biden said.
“Today I am here to talk about a commitment that is sacred to me, and central to our efforts to keep things moving. It’s a straightforward solution: support and grow more American-based companies, put more Americans to work in union jobs, strengthen American manufacturing, secure critical supply chains, and confront the climate crisis,” Biden added. “I can sum it up in two words: Buy American.”
As readers of this blog may know, Buy American is not a new issue for the Biden administration. Back in January, Biden signed an executive order that signaled the beginning of a whole-of-government approach to strengthening American manufacturing via federal procurement policies and other measures.
Since then, the Biden administration has introduced the first-ever Made in America Director at the Office of Management and Budget, examined supply chain resiliency, and reined in Buy American waivers.
And although all of these have been steps in the right direction, sizeable loopholes and exploitation of the waiver system continue to undermine American manufacturing workers.
“In recent years, Buy American has become a hollow promise,” Biden said. “But my administration is going to make Buy American a reality. And I am putting the weight of the federal government behind that promise.”
The proposed Buy American rule announced Wednesday build upon President Biden’s commitment to American manufacturing by seeking to “increase U.S. content in the products the federal government buys and support the domestic production of products critical to our national and economic security,” according to a White House statement.
More specifically, the proposal aims to close Made in America loopholes by immediately increasing the minimum domestic content threshold from 55% to 60%, with a goal of increasing the percentage required to 75% by 2029. On top of that, federal contractors for critical goods (think semiconductors, pharmaceuticals, batteries, etc.) will now be required to disclose the actual percentage of Made in America content in their products, as opposed to simply indicating they meet the threshold.
Additionally, the proposed rule seeks to address some of the concerns outlined in the Critical Supply Chain review released by the Biden administration back in June.
During the COVID-19 pandemic, “we couldn’t get the job done,” Biden said. “We couldn’t take care of people. We were short on basic equipment.”
That is why critical products and components identified through the review will, under the rule, receive price preferences to expand and develop domestic supply chains. “These Buy American rules can help guarantee a reliable market,” Biden said.
He’s right. The federal government is one of the largest consumers of American goods, spending roughly $600 billion per year on procurement spending for everything from mail delivery trucks to PPE.
“If American companies know that we’re going to be buying from them, they’re going to be more inclined to hire and make key investments in their communities,” Biden noted.
Here at the Alliance for American Manufacturing, we think the Biden administration is heading in the right direction. In a statement released Wednesday morning, AAM President Scott Paul noted that the proposed Buy American rule will put “American workers and businesses in a better position to benefit when the government purchases goods.”
“We commend the Biden administration for taking another meaningful step today to strengthen Buy American. Ensuring the federal government reinvests tax dollars in American workers, businesses, and communities is common sense. But for too long, the law has been weakened by loopholes, waivers, lax oversight, and overly permissive rules that allowed too many foreign goods to be purchased with tax dollars… There is much more work to be done, and we look forward to working with the administration to continue to improve Buy American policies.”
A diverse group of organizations, including the United Steelworkers (USW), AFL-CIO and the National Council of Textile Organizations (NCTO), also offered their support of the proposal.
“Workers across every facet of our economy, including hundreds of thousands of USW members, are ready and willing to help our nation meet its needs,” said USW President Tom Conway. “It’s vitally important that as the federal government spends taxpayer dollars, those funds go toward giving these workers the opportunity to continue manufacturing high-quality products and supporting good, community-sustaining jobs now and into the future.
“We appreciate the Biden administration’s commitment to closing these loopholes and strengthening domestic supply chains,” said NCTO President and CEO Kim Glas. “We look forward to continuing our work with the administration on these priorities as they consult with key stakeholders on implementation moving ahead.”
Looking ahead to the bipartisan infrastructure deal (which could face a procedural vote in the Senate as soon as Wednesday night), American manufacturers need to play a vital role. There is no reason that the roads we drive on, the bridges we cross, and the electric grids we rely upon cannot be built and made by American hands.
“From the steel that raised our cities, to the trucks behind me that are going to carry this economy forward, to the workers who are the heart and soul and spine of this nation. American strength is here…It’s you,” Biden said to the Mack Trucks audience in his closing remarks. “So today, I’m placing my bet on America…It will pay off with good jobs, long-term employment, [and] the ability for America to once again assert its role as the most powerful economy in the world.”