If the first phase of the debate regarding President Obama’s proposed American Jobs Act of 2011 (“Jobs Bill”) is any indication, the ability of the legislation to positively impact U.S. manufacturers may be lost in the shuffle between Democrats and Republicans about its price tag and effect on tax policy.
One potential bright spot for U.S. manufacturers is that the initial draft circulated by the White House contains a Buy American provision that is identical to language in the American Recovery and Reinvestment Act of 2009 (“2009 Recovery Act”). In part, the Buy American provision states that
[n]one of the funds appropriated or otherwise made available by [the Jobs Bill] may be used for a project for the construction, alteration, maintenance or repair of a public building or public work unless all of the iron, steel, and manufactured goods used in the project are produced in the United States.
The current version of the Jobs Bill mandates that the Buy American provision apply to multiple projects for which funds are made available under Title II of the legislation, including school and community college modernization, transportation, and other infrastructure projects.
Specific projects to which the proposed Buy American provision would apply include a $30 billion investment in school and college infrastructure including upgrading classrooms, and modernizing computer, science, and technology labs at schools; $50 billion for investment in highways, transit, rail and aviation infrastructure; establishing a National Infrastructure Bank capitalized with $10 billion in order to leverage private and public capital and to invest in a broad range of infrastructure projects; $15 billion to put construction workers on the job rehabilitating and refurbishing hundreds of thousands of vacant and foreclosed homes and businesses; and finally, deploying high-speed wireless internet to at least 98 percent of Americans. Assuming that any final Jobs Bill contains this Buy American provision, it is anticipated that the provision will simply be governed by 2009 Recovery Act regulations that were promulgated last fall and remain in force.