by CHQ News Staff JAN. 29, 2009 - Conservatives and business leaders are furious over a rider in the House version of President Barack Obama's economic stimulus plan that passed Wednesday night without a single Republican vote. Buried in the more than 600 pages of the bill is a "Buy American" provision that requires only American steel and iron be used in any federally funded stimulus project. Supporters of the Buy American provision say that any projects created by the stimulus package should maximize the dollars to create jobs for Americans. However, if foreign nations who feel slighted by American protectionism in the stimulus plan pass their own protectionist legislation, it could spell disaster for American exports and U.S. jobs that depend on those exports. "There is a hidden danger in this case of American protectionism," says Richard Viguerie, chairman of the conservative grassroots Web site ConservativeHQ.com. "In seeking to create jobs for Americans, we'll end up losing jobs by pushing away trading partners that benefit American businesses. We're cutting off one hand to help the other." Section 1110(a) of the bill states that "none of the funds appropriated or otherwise made available by this Act may be used for a project…unless all of the iron and steel used in the project is produced in the US." Only a few exceptions are made, such as when the use of American steel will increase project costs by more than 25 percent or its use "would be inconsistent with the public interest." Indiana Democrat Rep. Peter Visclosky, who received more than $40,000 from steel and iron related PACs during his reelection campaign this year, introduced the provision. The Buy American provision may have a dire impact on U.S. exports, as well as strain U.S. relations with foreign nations. Additionally, using only American steel to supply materials for stimulus-created public works projects will cause constructions costs to soar, limiting the amount of projects the stimulus may fund, and further reducing the cost/benefit ratio for these projects funded by taxpayer money. "There is no company that is going to benefit more from the stimulus package than Caterpillar, but I am telling you that by embracing Buy American you are undermining our ability to export U.S. produced products overseas," Caterpillar Government Affairs Director Bill Lane. Caterpillar, who recently announced it will be cutting 20,000 jobs after a 32 percent drop in profits, makes a majority of its sales overseas. "Any student of history will tell you that one of the most significant mistakes of the 1930s is when the U.S. embraced protectionism," says Lane. European Commission spokesperson Peter Power said such a provision is "not something we will stand idly by and ignore." Power stated that the Commission, which constitutes the Executive Branch of the European Union, would study the bill to see if it violates any trade agreements made between it and the United States. According to Washington Post, Democratic Senator Byron L. Dorgan is proposing a provision for the Senate version of the bill that would ban most foreign-made goods from being used in projects funded by the stimulus package. "Obama has called for a multilateral approach to foreign policy and a restoration of America's image in the world," says Philip Levy, a resident scholar at the American Enterprise Institute. "It may fall to other world leaders to remind him of the role that global trade plays in U.S. international relations." -30-
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