On January 30, 2018, Christian Britschgi writes on Reason:
A group of senators is pressuring Trump to make his infrastructure proposal as cost-ineffective as possible by adding protectionist provisions to it.
“As you draft your infrastructure proposal, we encourage you to not only protect existing ‘Buy America’ laws, but work with Congress to expand these protections,” reads the Friday letter (first made public Monday) signed by such progressive luminaries as Elizabeth Warren(D–Mass.), Bernie Sanders (I–Vt.), and Sherrod Brown (D–Ohio). Such a move, these senators say, will “improve wages, boost growth, and support American manufacturers.”
To judge from the letter’s extensive quotes from Trump’s own speeches and executive orders, protectionist procurement requirements are one area where #resistance progressives and the president are in agreement.
Trump’s inaugural address promised a government that would “buy American and hire American.” A few months later, he signed an executive order in Kenosha, Wisconsin, which promised to crack down on waivers for “Buy American” provisions on federal projects.
Current federal law requires that infrastructure projects receiving federal dollars source a certain percentage of materials—typically iron, steel, and “manufactured goods”—from domestic producers. Federal cabinet heads have broad authority to waive these requirements if they impose undue costs, if the materials are not available in sufficient quantity, or if it would otherwise be in “the public interest.”
That “public interest” provision allows the government pretty broad authority to skirt Buy America requirements, which they often do—and for good reason, says Baruch Feigenbaum, a transportation analyst with the Reason Foundation (the nonprofit that publishes this website).
“Buy America basically makes things more expensive. Instead of getting the most cost-effective materials from throughout the globe, you’re forced to buy things in America,” he says.
The senators writing to Trump had precious little to say about cost effectiveness, instead asserting that “only strict adherence this [Buy America] principle will ensure that the economic benefits of infrastructure investment to American companies, not to foreign companies.”
“The point of an infrastructure project is to build infrastructure,” retorts Feigenbaum. Hiring workers and purchasing materials are a means to that end, not an end in themselves.
Stepped up enforcement of Buy American provisions isn’t the only infrastructure demand coming from the Democratic side of the aisle. In January of last year, Senate Dems proposed their own $1 trillion infrastructure plan composed entirely of direct federal spending; it was full of progressive priorities, including $130 billion for public transit, $100 billion for “21st century” (read: renewable) energy projects, and $20 billion for expanded broadband internet. House Democrats have proposed a $2 trillion infrastructure plan similarly composed entirely of direct federal dollars.
The Trump administration says it wants to shift as much infrastructure financing as possible onto states, local governments, and private investors. Still Republicans will likely need support from some Democrats to move an infrastructure project through the Senate, necessitating some horse-trading.
“Democrats are going to be skeptical to work with the White House, so giving Democrats Buy America stuff will make them more likely to agree to an infrastructure package,” says Feigenbaum. Given Trump’s personal support for the idea, and given the leverage Democrats hold, the administration’s forthcoming infrastructure plan is likely to contain more protectionism, and consequently less actual infrastructure investment.