A legislative hearing Tuesday saw testimony highlighting how Buy America rules will positively impact Massachusetts.
The Massachusetts state legislature’s Joint Committee on State Administration and Regulatory Oversight convened for a hearing on Tuesday, Oct. 19 to hear testimony – including from our own Brian Lombardozzi! — about the potential benefits of S. 2546, An Act to Promote American Manufacturing.
We’ve been writing about this legislation a lot, and for good reason. The measure supports manufacturing by extending Buy America rules to the local level in the Bay State, requiring cities and towns to give preference to U.S. manufacturers when buying steel, iron and other materials for new buildings and renovations. These rules apply to all public projects exceeding $500,000 and are modelled on similar rules that are already in place in more than 21 states.
“Reinvesting tax dollars in the local and national economy promotes growth, expands the tax base, and — by creating more job opportunities for middle-class Americans — reduces the burden on social safety net programs,” Lombardozzi testified. “This legislation will ensure that as Massachusetts regulates the way U.S. manufacturers do business, Massachusetts will do its best to encourage U.S. production and investment…and compliance with U.S. environmental and labor standards.”
As frequent readers of this blog know, Buy America is one of the best ways to support American manufacturing, because these preferences ensure that taxpayer money is reinvested in American jobs and American enterprise. If passed, S. 2546 would help level the playing field for Massachusetts manufacturers, who are forced to compete against foreign state-owned enterprises that use unfair trade practices like heavy government subsidies, currency manipulation, and lax labor and environmental standards.
Massachusetts workers and businesses can compete against anyone in the world – but right now, the game is rigged against them. And the bill’s sponsor, State Sen. Joan Lovely (D), noted that has led to lost opportunity in the state.
“Despite having quality steel fabricators here in our commonwealth, more than 80% of school building projects, and a majority of other public construction projects that require fabricated steel go out of state and our country to foreign businesses,” Lovely explained. “Manufacturers from Canada and other countries continually underbid public construction firms due to a favorable tax and economic structure, however. This outsourcing has ultimately discouraged domestic steel fabricators from bidding on most if not all public projects.”
One of them is Stephen Capone of Capone Iron Corporation, who also testified on Tuesday. Capone told us on a recent episode of The Manufacturing Report that his company stopped bidding on government contracts years ago, because it became impossible to compete against foreign governments. But should this bill become law, his company would get back into the game.
“We are ready and able to do this work for our community – and we’re ready to do it well and at a fair price,” Capone recently wrote to AAM supporters.
As we noted in our previous discussion of this bill, one economic analysis found that the bill would increase economic productivity in Massachusetts, ultimately saving taxpayers about $15 million per year. The Steel Fabricators of New England, who authored the analysis and support the bill, also found that for every $1 spent on domestic fabricated steel, about $1.50 is generated in economic productivity.
The bill would also generate up to $500 million in economic activity for Massachusetts over five years. Robert Cuomo, a consultant who testified before the committee, explained that a component of that would be the creation of 10,000 new manufacturing jobs every five years, as well as other jobs in downstream industries. This Buy America bill has the potential to reverse a troubling trend in Massachusetts that has seen over 150,000 manufacturing jobs in the state disappear over the past 20 years.
“The pandemic has taught us that buying domestic is critical to support and invest in our economy,” Lovely said. “As we build back a better Commonwealth, it is my hope that we can prioritize these businesses.”