Senate Votes “Softened” “Buy American” Section in Stimulus

A “Buy American” provision in the stimulus bill crafted by the House of Representatives may have sounded like good economic thinking that would keep money flowing to U.S. workers — but it violates international trade agreements and could have sparked a trade war with America’s overseas allies and friends.

Last night, the U.S. Senated voted to soften the “Buy American” part of the stimulus so that it won’t violate the United States’ existing trade treaties.

Senator John McCain wanted the entire “Buy American” pledge removed from the bill but he was overruled.

There was intese pressure to remove the “Buy American” language directed at the U.S. from China, Germany, Britain and other trade partners.

China’s leader Hu Jintao cautioned President Obama about the “buy American” provision in the economic stimulus plan during a phone conversation.


 “Buy American” Sounds Good; Carries An Unbearable Down Side

Obama Caught Between World Leaders, Congress, U.S. Voters on “Buy American”

China announced that President Hu Jintao, seen here in 2008, ... 
President Hu Jintao of China (AFP/File/Louisa Gouliamaki)


2 Responses to “Senate Votes “Softened” “Buy American” Section in Stimulus”

  1. djcnor Says:

    Changing the parts that violate international agreements is acceptable, but there is an extra consideration in “buy American” requirements that many people miss. When they money is spent internally, it get the job done, it stimulates the first business that gets the money, it stimulates the secondary businesses in which the first business and its employees spend that money once they receive it, it stimulates the businesses those secondary business and their employees spend the money in, and so on, and so on, and so on. Thus the stimulus effect of the money is greatly multiplied.

  2. djcnor Says:

    Ah, but there’s no reason it has to. Particularly with the energy savings benefit that comes with producing and buying locally. Consider the alternative tax cut. Even a greater percentage immediately exits the communitiy without passing through local hands a second time, and none of the needed work gets done.
    Yes, the 3o’s were different, but not in a way that makes the principle of getting work done in the process of stimulating less valid. In fact, it makes it more valid because the work being done is the kind that benefits everyone in a country long term as the projects done in FDR’s time did. Work done inside the US cannot help benefiting those inside the US, while tax cuts, if spent in a way that the money leaves the US, does not.

    A third world country is defined as one that exports raw materials and imports finished goods. The US has been heading more and more in that direction, and the trend needs to be reversed. There is really no reason that our raw materials should be shipped elsewhere for processing, then shipped back, wasting tons of energy.

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