President Joe Biden criticized “past administrations” that splurged on requests to buy American materials for federal infrastructure projects in his State of the Union address. You might want to look in the mirror.
“Buy American has been the law of the land since 1933. But for too long past administrations have found ways around it,” the president said Tuesday night. “Not anymore. Tonight I’m also announcing new standards that require all construction materials used in federal infrastructure projects to be made in America.”
The new standards that Biden mentioned are actually standards established by Congress that would be in place today if it weren’t for the waivers created by his administration. These requirements have long been found to increase the cost of infrastructure projects, but the promise of creating even more high-priced American jobs makes them a popular provision.
The $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), which Biden signed into law in November 2021, again increased requirements that federally funded infrastructure use American-made iron and steel. It also extended those requirements to building materials such as drywall, copper wire, fiber optic cables and lumber.
Biden was so proud of those new Buy America provisions that he made sure to mention them in his 2022 State of the Union address.
“I’m announcing that this year we will begin repairing more than 65,000 miles of highways and 1,500 bridges that are failing,” the president said that night. “When we use taxpayer dollars to rebuild America, we will buy American. Let’s buy American products to support American jobs.”
These requirements were to enter into force within 180 days of the adoption of the law. Just before they did, the Biden administration’s Department of Transportation (DOT) issued a blanket 180-day waiver for the new Buy America provisions for construction materials, citing the cost and complexity of complying with the provisions.
Public comments from state departments of transportation, public transit agencies, and contractors generally supported this exemption and, in fact, called for it to last at least 18 months and as long as four years.
The reason is quite simple: Buy America provisions greatly increase the cost of infrastructure projects.
As I noted during Biden’s last State of the Union, buying American steel for infrastructure projects costs about twice as much as importing from China, according to a 2019 congressional research report. That mandate cost American road builders an additional $2 billion from 2009 to 2011. ., when then-Vice President Biden oversaw the spending of stimulus dollars on infrastructure projects.
Purchasing American-made buses means that we pay twice as much for their fleet as Japan and Korea. Our wagons cost as much as 34 percent more because we insist on buying American ones.
DOT officially allowed that exemption to expire as planned in November 2022. But in January, it also issued regulatory guidance extending that exemption for DOT-funded project contracts through March 2023 for bids awarded before May 2022.
Expanding Buy America provisions and cracking down on exemptions have been a staple of all administrations and most State of the Union speeches. The fact that they keep exempting themselves from these requirements shows that Biden—and his predecessors—understand on some level that they’re a bad idea.