Alliance for American Manufacturing (AAM) Supports the Maryland Buy American Steel and Manufactured Goods Act.

Posted by scapozzola on 03/29/2012

The Alliance for American Manufacturing (AAM) testified yesterday in favor of domestic procurement at a hearing on Maryland's Buy American Steel and Manufactured Goods Act (SB 432)Click here to read the full testimony.

From AAM's testimony:

To fully realize the job creating and economy-expanding potential of Buy America preferences in state procurement, it is important that the preference apply to all manner of state infrastructure and spending in a way that maximizes domestic content. Senate Bill 432, the Maryland Buy American Steel and Manufactured Goods Act, would extend the preference afforded under the MBASA for “American steel products” to “American manufactured goods” (defined as goods for which all of the manufacturing processes for the final product occur domestically and for which all of the components of the final product originate in the United States). That is, Maryland public bodies would require a contractor or subcontractor to use or supply only “American steel products” and “American manufactured goods” for contracts for constructing or maintaining public works.

Thus, the proposed changes by SB 432 would apply to a number of other materials and products utilized in public works projects. This should include, but not be limited to, the following examples: non-steel products installed in public works projects such as iron municipal castings; aluminum traffic lighting and lampposts; cement and pre-cast concrete forms; iron and concrete pipe used in waterworks infrastructure; non-steel culvert pipe for ditches; and glass used in public buildings.

Some key reasons to support Buy America preferences generally and the passage of SB 432.

1. Buy America is longstanding practice by the federal government and many state governments, and is well-understood by contractors and bidders on public projects. For nearly 80 years, dating back to the Buy American Act of 1933, the federal government has had laws on the books to ensure that hard-earned tax dollars are reinvested in the American economy and that they create jobs in America and not abroad. To support our national security capabilities, Buy America laws were expanded in the 1940s to apply to defense spending. In the early 1980s, President Ronald Reagan signed into law an expansion of Buy America for highway and transit projects that are funded by federal grants. Most recently, Buy America preferences were incorporated into the American Recovery and Reinvestment Act.

2. Procurement policies should reflect public policy priorities. As we develop our infrastructure and procure goods needed for government functions, we should do so with a larger policy perspective in mind so that we don’t penalize domestic producers and encourage production overseas. But, that is exactly what happens when tax dollars are used to purchase products made overseas – our governments reward those companies who moved their operations, investment dollars, and jobs to foreign countries where they can disregard environmental and safety regulations with impunity and where inefficient energy processes are the norm. Our procurement policies should give a preference in taxpayer-financed spending for products produced in accord with U.S. environmental and workplace safety standards. When they don’t, they discourage production in the United States, export U.S jobs, and condone production practices long since regulated into obscurity here in the United States.

3. Buy America creates more jobs. According to an AAM report entitled How Infrastructure Investments Support the U.S. Economy, 18,000 new jobs would be created for every $1 billion in new infrastructure spending on our nation’s transportation, energy, water systems, and public schools. Other estimates are even higher at 35,000 jobs per $1 billion spent. Yet, of greater importance, when the use of U.S.-made
materials is maximized with a strong Buy America provision, manufacturing employment gains from infrastructure investment increase by up to 33 percent.

4. Buy American preferences work to stimulate emerging industries. A recent report by the Duke University Center for Globalization observes, “[d]omestic content requirements have helped develop a robust U.S. component supply chain and give vital opportunities to U.S. firms.” Over the long term, sustained government investment in our crumbling infrastructure network, coupled with strong Buy America preferences, presents an opportunity to expand supply chains and create desperately-needed manufacturing jobs in the United States.

5. Your constituents want their tax dollars reinvested here at home. According to bipartisan polling conducted for AAM in 2011, public support for Buy America could not be stronger: 91 percent of voters said they support policies to ensure that their tax dollars are used to buy American-made materials – this includes 94 percent of Democrats, 88 percent of Independents, 90 percent of Republicans, and 89 percent of Tea Party supporters. Meanwhile, Americans feel strongly that American-made goods are of the highest quality: 90 percent of voters have a favorable view of American manufacturing companies – up 22 percent from 2010 – and 97 percent have a favorable view of U.S.-made goods – up 5% from 2010.

6. Buy America preferences include common-sense waivers. To anyone who questions the effectiveness of Buy America, perhaps suggesting that it is not achievable, desirable or realistic or that the U.S. does not currently have sufficient capacity to meet a particular domestic content threshold, I would respond by reminding them that domestic content laws merely create a common-sense preference, not a mandate or a requirement, for American-made goods when they are available and competitively priced. To alleviate any short-term market limitations, Buy America laws are crafted to provide common-sense waiver flexibility in instances when excessive cost or limited product availability would be an impediment in the completion of a project. For example, an exception to MBASA may be granted if the head of a public body determines that: the price of American steel products is not reasonable, as defined in statute; American steel products are not produced in sufficient quantity to meet contract requirements; or, the purchase of American steel products is inconsistent with the public interest.

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