Bill to buy American would net jobs, but at a price
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WASHINGTON -- A new bill requiring infrastructure materials to be bought domestically would bring jobs and money to Western Pennsylvania but could raise project costs nationwide.
The Invest in American Jobs Act of 2011, introduced on Thursday, would require that steel, iron and manufactured goods used for highways, bridges, public transit systems, railways and aviation infrastructure be produced in the United States.
The bill comes in response to the outrage over a multibillion-dollar contract being awarded earlier this year to a Chinese company to produce the steel for a California bridge. To minimize project costs, California navigated around existing Buy America provisions to purchase the cheaper foreign steel.
If passed, the bill could bring billions of dollars in future contracts to U.S. steel companies, many of which operate out of Western Pennsylvania. Every $1 billion of infrastructure spending creates 15,000-35,000 jobs, according to multiple studies.
Although profitable for Western Pennsylvania, the bill might not create jobs or increase infrastructure on a national level, said University of Pittsburgh professor Steven Husted, formerly a senior staff economist on the President's Council of Economic Advisers.
"The biggest problem with this is you're raising your cost of building infrastructure," Mr. Husted said. "If you have to spend more on steel, you can't build as many roads, so you have less overall construction going on. There's only so much appropriated for projects."
The bill was introduced by Rep. Nick Rahall, D-W.Va., the ranking member of the House Committee on Transportation and Infrastructure. Rep. Jason Altmire, D-McCandless, also sits on the committee and said he fully supports the bill.
"There's a distinguishing issue between 'cheap' and 'cost-efficient,' " he said. "The most cost-efficient option is the best thing. We're not saying the industry can't make the cheap decision. They should just look [in the U.S.] first."
The bill allows for exceptions if the buying government applies for a waiver, publicly disclosing why it's not purchasing domestically and allowing for a period of public comment. The treasury secretary then may grant the waiver, but only after publishing a "detailed justification" in the Federal Register before it takes effect.
Mr. Altmire said the bill would require both lower costs and higher quality for a comparable foreign product to warrant a waiver. He suggested that foreign products are less dependable, making the extra cost of buying American worth it.
Democrats in the Republican-controlled House hope to include the act's provisions in any long-term bill that the majority pursues. If Republicans won't include it, Democrats are ready to push it as a stand-alone bill or an amendment to a bill.
First Published December 2, 2011 12:00 am