Stimulus funds
Another "Buy American" battle is shaping up over the use of stimulus funds.
A group of Democratic senators led by Sen. Charles Schumer wants to block renewable energy funds from going to overseas manufacturers that compete for American jobs.
The senators asked Treasury Secretary Timothy Geithner to suspend the program until legislation is passed expending Buy American provisions of the act. It now requires government projects financed by the $789 billion stimulus package to use steel and other goods manufactured in America.
The senators seek to apply the requirement to all projects, including private ventures to create and preserve U.S. jobs and not those overseas, particularly in China, which is the world's leading manufacturer of wind turbines and solar panels.
Sen. Schumer last year asked the Energy Department to reject federal funds for a $1.5 billion wind farm in West Texas, which received stimulus aid even though the turbines will be made in China. A study by the Investigative Reporting Workshop said that most of the $2 billion in energy grants has gone to foreign-owned companies.
An Energy Department spokesman defended the grant process, saying the Recovery Act has brought more than $10 billion of foreign investment in the U.S. wind industry. "It's the opposite of outsourcing, and we should encourage — not discourage — those kinds of investments," said Dan Leistikow.
The projects also create construction jobs here as well as jobs in the manufacture of components. Buy American provisions can block U.S. firms with manufacturing plants in other companies from benefiting from stimulus-funded projects. Foreign companies may also be the preferred supplier since their plants are already geared up with the capability to meet the demand on short notice, and another objective of the stimulus act is to speed spending.
President Obama could find himself in the middle of the dispute. He may have to choose between "buy American" plans favored by organized labor or his expressed support for free trade.
The original Buy American provision touched off a low-key trade spat with Canada since it blocked participation from Canadian suppliers and companies in apparent conflict with free trade agreements. Canadian provinces and municipalities reacted with their own "Buy Canada" proposals. That dispute has apparently been resolved. But now it might flare up with China.
