Biden administration takes key step to ensure fed dollars will support U.S. manufacturing
WASHINGTON — The Biden administration is taking a key step to ensure that federal dollars will support manufacturing in the United States — by issuing requirements on how projects funded by the $1 trillion bipartisan infrastructure package s supply building materials.
The guidelines released Monday require that purchased material — whether for a bridge, highway, water pipe or high-speed internet — be produced in the United States, according to administration officials. However, the rules also set up a process for waiving these requirements in the event that there are not enough domestic producers or material costs are too high, with the aim of issuing fewer waivers over time. time as U.S. manufacturing capacity expands.
“There are going to be additional opportunities for good manufacturing jobs,” said Celeste Drake, director of Made in America in the White House Office of Management and Budget.
President Joe Biden hopes to create more jobs, ease supply chain strains and reduce dependence on China and other countries whose interests diverge from those of America. With inflation at a 40-year high ahead of the 2022 midterm elections, he’s betting increased domestic output will eventually ease price pressures to blunt the Republican attacks his government relief package $1.9 trillion coronavirus initially triggered higher prices.
“From day one, every action I have taken to rebuild our economy has been guided by one principle: Made in America,” Biden said Thursday in Greensboro, North Carolina. “We need a federal government that doesn’t just pay lip service to Buy America, but actually takes action.”
Biden said the roughly $700 billion the government spends annually on buying goods is supposed to prioritize U.S. suppliers, but regulations dating back to the 1930s have been watered down or applied in a way to mask use foreign imports.
The administration could not say what percentage of building materials for existing infrastructure projects is made in the United States, even though the federal government is already spending $350 billion on construction this year. The new guidelines would let government officials know how many dollars are going to American workers and factories.
In the bipartisan infrastructure package that became law last November, there was a requirement that beginning May 14 “none of the funds” allocated to federal agencies for projects could be spent “unless all the iron , steel, manufactured goods and building materials used in the project are produced in the US That’s according to the 17-page advice Monday.
The guidelines include three standards for these requirements to be waived: if the purchase “would be inconsistent with the public interest”; if the necessary materials are not produced “in sufficient and reasonably available quantities or of satisfactory quality”; or if US materials increase the cost of a project by more than 25%.
U.S. manufacturers are missing about 170,000 jobs of the 12.8 million factory jobs held in 2019, as manufacturing jobs began to decline before the pandemic began. But the United States has 6.9 million fewer manufacturing jobs from its 1979 peak, a loss caused by outsourcing and automation.
Getting more industrial jobs will likely mean adding more factories and assembly lines as manufacturers operate at 78.7% capacity, which the Federal Reserve says is above the historical average.