Sen. Brown, Steel Workers President Leo Gerard Call for 'Buy America' Enforcement in Stimulus

WASHINGTON, D.C. – U.S. Senator Sherrod Brown (D-OH) and United Steelworkers President (USW) Leo Gerard today called for “Buy America” enforcement provisions in the upcoming stimulus legislation.

“This is about jobs and putting our economy on the right track,” said Brown. “Buy America provisions will ensure that U.S. taxpayer dollars go toward the creation of U.S. jobs.”

“It’s time for economic patriots to stand up in our country. We need to ensure that our laws are aggressively implemented to ensure that American taxpayer dollars are used to put Americans back to work and help renew our economy. Senator Brown’s resolution makes it clear that Congress uses stimulus funds on products made here in America,” said Leo W. Gerard, International President of the United Steelworkers union, which represents 1.2 million active and retired members in a variety of industrial and service sectors.

“For too long, loopholes and waivers have allowed some to unfairly avoid laws meant to keep taxpayer dollars at home. We can’t afford these games any longer. Our economy is in crisis. Unemployment is rising. Mass layoffs lead the headlines day after day. No sector of our economy has been left out of the economic devastation and our union and many working families are feeling it,” Gerard said. “With Senator Brown’s resolution and other recent actions by Congress, it’s clear that lawmakers intend for stimulus money to be invested in America. But the Steelworkers aren’t taking anything for granted. We are taking the fight for jobs and economic renewal to state and local governments. We will fight to make sure that the money is spent on creating jobs here, on revitalizing our economy and on restoring the strength of our nation’s manufacturing base.”

The American Recovery and Reinvestment Act is expected to cost $850 billion and create three million jobs over the next two years. A large portion of the funding will be targeted toward immediate projects designed to strengthen the nation’s infrastructure:  roads, bridges, tunnels, public transit, water systems, and ports. This infrastructure investment will create demand for domestically-produced goods, such as iron, steel, and concrete.   

Domestic sourcing statutes, commonly referred to as “Buy America” provisions, were established to give preference to domestic materials in federally-funded highway and transit projects for state and local authorities. 

Despite the existence of Buy America provisions at many federal agencies, there has been a weak enforcement process with little transparency. For instance, the Department of Homeland Security (DHS) used Chinese steel products to build portions of the 854-mile border fence along the U.S./Mexico border. Site evaluation determined that a significant portion of the fence posts were Chinese-made.  While DHS is required to buy American products, it did not receive a waiver for the border fence project and there was no disclosure of the intent to purchase Chinese posts prior to the acquisition.

Strong enforcement of Buy America provisions could create jobs and enhance the effectiveness of the economic recovery package. A December 2008 report by the U.S. Government Accountability Office (GAO) outlined the benefits of such Buy America policies.  Citing Department of Transportation literature, the GAO report noted that “the types of potential benefits related to this program…include protecting domestic employment through national infrastructure improvements that can stimulate economic activity and create jobs; protecting against unfair competition from foreign firms as a result of foreign government subsidies; and maintaining national security interests through the continued use and development of certain industries within the U.S. economy, like the iron and steel industries.”

Brown is working with colleagues on a Senate resolution expressing the sense of the Senate that vigorous enforcement of Buy America provisions is essential to our economic recovery. It states explicitly that Buy America provisions can be employed in a manner fully consistent with international trade obligations. 

Studies indicate that for every $1 billion invested in infrastructure projects, anywhere from 35,000 to nearly 50,000 jobs are created. According to an American Alliance for Manufacturing (AAM) study by the University of Massachusetts (Political Economy Research Institute), significant investment in infrastructure could also create more than 250,000 manufacturing jobs. New jobs would be created in such industries as fabricated metals (38,000), concrete and cement (21,000), glass-rubber-plastics (15,000), steel (9,000), and wood products (8,200). The report also notes that even more manufacturing jobs could be created if more U.S.-made materials are used.  Utilizing 100 percent domestically-produced inputs for infrastructure projects would yield an increase of 77,000 jobs. 69,000 of these jobs would be in the manufacturing sector, representing a 33 percent increase in total manufacturing jobs generated.

Brown’s resolution is supported by USW and members of the Ohio Steel Council. Brown was joined by Alan McCoy, Vice President of AK Steel Corp. which is headquartered in Middletown, Ohio with locations in Coshocton, Mansfield, Middletown, Walbridge and Zanesville. Other members of the Ohio Steel Council include ArcelorMittal USA (Regional Office in Richfield with locations in Cleveland, Columbus, Richfield, Warren), Cleveland State University, Lorain Tubular Operations (headquartered in Lorain), Ohio Department of Development, PRO-TEC Coating Company (headquartered in Leipsic), Republic Engineered Products, Inc. (headquartered in Fairlawn with locations in Canton, Fairlawn, Lorain, and Massillon), The Ohio General Assembly, The Ohio State University, The Timken Company (headquartered in Canton with locations in Bucyrus, Canton, Eaton, New Philadelphia, Wauseon, Wooster and, Youngstown), Thomas Steel Strip Corp (headquartered in Warren), United Steelworkers, V & M STAR (headquartered in Youngstown), WCI Steel, Inc. (headquartered in Warren), and Wheeling-Pittsburgh Steel Corp. (headquartered in Wheeling, W.Va. with locations in Martins Ferry, Mingo Junction, Steubenville, and Yorkville).

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