The measure could create 100,000 jobs, sponsors say.
There are bound to be many enduring lessons from the COVID-19 pandemic, but one of the clear takeaways is the need to reshore critical manufacturing.
Many American manufacturers have done their part to make personal protective equipment (PPE) in response to the crisis. But five months after the shutdowns began, there are still consistent reports of shortages of everything from masks to over-the-counter medications, something AAM President Scott Paul predicted we would see happen when he wrote about the crisis back in April.
Simply put, the decades of offshoring that proceeded the crisis put us in a terrible position to respond. If the United States is serious about being better prepared for the next crisis – whether it be another pandemic, a natural disaster, or even some kind of military attack – the country is going to have to put in place industrial policy to strengthen and grow our manufacturing capabilities.
That effort should start with the federal government buying American-made products and materials whenever possible, and new legislation aims to ensure the federal government “prioritizes the purchase of American-made goods.”
Introduced this week by Sen. Chris Murphy (D-Conn.) and Rep. David Cicilline (D-R.I.), the bill seeks to close loopholes that allow federal agencies to waive Buy American requirements. The 21st Century Buy American Act also would provide additional resources for U.S. manufacturers to help them compete against foreign manufacturers for U.S. government contracts, and increase the domestic content percentage requirement to 60 percent. {media_1}
Murphy is a longtime supporter of Buy American. Legislation he cosponsored helped create a centralized online hub to increase transparency and ensure federal agencies buy American-made goods.
“I have seen manufacturing companies across our state step up in a big way during the COVID-19 pandemic to produce critical PPE and ventilators, and taxpayers want their dollars supporting these companies,” Murphy said in a press release. “Anyone who professes to being a champion of U.S. manufacturing should support this legislation.”
Right now, federal agencies can use something called a “public interest waiver” to waive Buy American requirements. Research shows, however, that agencies often exploit the waiver, sending billions in taxpayer dollars overseas every year instead of reinvesting that money into American businesses and workers. The Economic Policy Institute estimated in 2015 that these loopholes have cost 100,000 jobs.
Agencies also often claim that an item is not available domestically in order to get around Buy American. While that claim is often just used as an excuse – there are plenty of instances in which there is an American-made item available – the legislation aims to take on the problem head-on by providing resources to help new and existing American manufacturers make these items. That would not only ensure that tax money stays in the United States, but also strengthen America’s ability to make the very things it needs.
In addition, the bill increases the “domestic content percentage requirement” from 50 to 60 percent, meaning that in order to qualify as American-made, a company must produce a majority of its materials in the United States.
All of the ideas put forth in the bill make sense to us. At a time when the United States is facing multiple crises at once, it’s critical that lawmakers and government officials do everything they can to ensure that taxpayer money is reinvested into our local communities (looking at you, D.C.-area transportation officials).
When America invests its taxpayer dollars to support U.S. workers, businesses, and communities, we create jobs and boost the economy. And we know that when Buy America and Buy American preferences are actually enforced, manufacturers and workers step up.
That’s always a good thing, but especially right now, given the economic fallout of COVID-19.