Buy American Hurts America

by Daniella Markheim WebMemo #2256 Looming large in the stimulus package passed by the U.S. House of Representatives Wednesday--and currently under consideration in the U.S. Senate--is the expansion of "Buy American" provisions that discriminate against foreign goods and services in U.S. government procurement. House legislation would require that only iron and steel products made in America be used in the myriad public works projects funded in the stimulus package--unless domestic steel adds more than 25 percent to the cost of the project. The Senate version is even more restrictive, banning the use of any import in stimulus-funded projects. Advocates of Buy American rules claim that limiting competition for U.S. government contracts to domestic firms will protect U.S. jobs and help prop up firms in troubled industries. Regrettably, the cost of such protectionism will be inflicted on the American public, who will fail to get the best value for their hard-earned taxpayer dollars; the U.S. workers who lose their jobs when the companies they work for go out of business as countries retaliate in kind; and the economy as a whole, which will become less productive. Buy American Hurts America