The $1.2 trillion infrastructure package that Congress passed in November 2021 is touted as one of the signature accomplishments of the Biden administration. However, a fatal flaw in the law is gumming up the works and making it hard to turn all that money into new bridges and roads.
That flaw is a far more expansive "Buy American" provision than what's been typically used previously. As state and local government "trade" publication Route Fifty explains:
"The law added more materials that must be produced in the United States on projects getting federal money. Before, for example, the Buy America provisions applied to iron and steel. Now, they'll apply to construction materials such as copper wiring, glass, fiber optic cable, and plastics."
That's causing a rising backlash from state transportation departments -- in red and blue states alike.
This month, Roger Millar, Washington state's secretary of transportation, sent a letter to the U.S. Department of Transportation on behalf of the American Association of State Highway and Transportation Officials begging for relief from the red tape:
"The quick implementation of Buy America requirements for such a broad range of materials will cause delays in project delivery while states, contractors, manufacturers, and suppliers continue working to determine how best to track and verify these materials."
Thus, in trying to give favors to U.S. manufacturers, the Buy American rule in the Democrats' infrastructure package undercuts construction firms that face project delays and disruptions for lack of compliant materials.
To the typical person, Buy American rules sound great. However, when the rubber hits the road, they're garbage.
In addition to all the extra bureaucracy needed to scrutinize and track the materials being used, Buy American rules force government project managers to spend more for materials since their choice of vendors is drastically reduced.
“Given the current supply chain constraints, moving to all U.S.-sourced construction materials will inevitably lead to project sponsors paying a premium to meet the Act’s requirements," wrote American Public Transportation Association President Paul Skoutelas in June. "The question then becomes whether the market/industry can absorb a doubling, tripling or even a quadrupling of costs for construction materials.”
That means that $1.2 trillion won't go nearly as far as it could if project managers had unfettered access to the global market for materials.
Washington, D.C.'s transit system is a case study in these effects. Over a ten-year period, Buy American rules made the city's revamp of its train fleet cost an extra $400 million, according to Reason. That's the equivalent of an extra 150 train cars.
Buy American bureaucratic idiocy isn't limited to infrastructure projects. It's also showcased in food aid to other countries.
"Americans dole out $2.5 billion annually in food assistance," writes Katrin Park at Foreign Policy. "About 75 percent of that money is used to cover the cost for processing and shipping U.S.-grown food overseas...A 2013 study found that buying grains locally in recipient countries resulted in 50 percent savings and shortened the delivery time from about six months to three."
Then there's the Jones Act, which blocks foreign vessels from transporting freight or people from one U.S. port to another, shaving tens of billions of dollars out of the American economy every year -- with the costs ultimately borne by consumers, and the benefits reaped by politically influential shipbuilders, shippers and unions.
Bottom line: Like all Buy American rules, the ones in the Democrats' infrastructure package force the government to spend more and get less. They do accomplish a principal purpose however: giving politicians something to boast about to ill-informed citizens who can't see the unintended consequences.
https://www.zerohedge.com/political/bidens-buy-american-rules-undermining-infrastructure-spending
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