Buy American, Build Nothing

 

"The Bipartisan Infrastructure Law of 2021 is reshaping how America builds -- but not in the way its supporters hoped. Few big projects have been completed, and one little-noted aspect of the law, expanding mandates to use American-made products, has confused federal, state and local governments, and created new levels of bureaucratic waste.

Since the 1970s the Buy America program has required that federally funded transportation projects use steel, iron and manufactured goods made in the U.S. But the new version -- Build America, Buy America, adorably called BABA for short -- added to the all-American list construction materials and specific products such as glass, lumber and drywall while tightening oversight of the program.

The new law also expanded Buy America requirements far beyond transportation to include all infrastructure funded by the federal government. As with many mandates during the Biden administration, the law defined the terms as broadly as possible, with "infrastructure" including "at a minimum" not only roads, dams and airports, but utilities, broadband and even individual buildings.

Government agencies are scrambling to find out how to comply with its impossible burdens. The Education Department found 32 separate programs that would be classified as infrastructure under the law. The Federal Emergency Management Agency found 23 programs.

The law formally created a Made in America Office to review agency compliance and approve waivers. Considering the extent of the mandates, this has been difficult. The law put that office in charge of policing individual government purchases for domestic content. This has wrapped federal officers in minutiae. The Transportation Security Administration had to get a waiver to order "tactical pants" for air marshals. The Department of Veterans Affairs and other departments had to get a waiver to buy pills for the treatment of HIV. The Environmental Protection Agency got a waiver so that the North Unit Irrigation District of Madras, Ore., could use reinforced polyethylene liner for a canal when there were no U.S. producers for this niche product.

All the mandates, waivers, and box-checking add time and cost to government purchases. The law itself says BABA can increase costs by up to 25% on the entirety of a project. But according to some studies, products subject to Buy America requirements can easily cost more. The Federal Highway Administration, which already had to adhere to the old Buy America law, this month estimated that some of the new BABA requirements could cost more than $700 million a year to implement, although the agency admitted it didn't calculate the expense of compliance and delays.

America's critical defense and national security products should be made at home. But pants and drywall don't have to be. Because of BABA, the infrastructure law has made building in the U.S. harder than ever.

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Mr. Glock is director of research at the Manhattan Institute and author of "The Dead Pledge: The Origins of the Mortgage Market and Federal Bailouts, 1913-1939."" [1]

1. Buy American, Build Nothing. Glock, Judge.  Wall Street Journal, Eastern edition; New York, N.Y.. 26 Mar 2024: A.13.