WASHINGTON, D.C. – The Office of Management and Budget (OMB) released its final guidance Monday for the implementation of Build America, Buy America Act (BABA) provisions within the Bipartisan Infrastructure Law (BIL). This guidance directs federal agencies in applying BABA's domestic content preferences in federally assisted infrastructure projects for iron and steel, construction materials, and manufactured products.
Alliance for American Manufacturing President Scott Paul said:
"Today's action represents another step forward for American manufacturers and their workers, who are ready to supply the products and materials used in taxpayer-funded infrastructure projects, if given the opportunity.
"As promised in his 2023 State of the Union address, the President has advanced the new Buy America law by adopting strong origin standards for construction materials used in taxpayer-funded projects.
"This comes in the face of ongoing efforts of special interest groups reliant on offshore production trying to weaken the new law so that American tax dollars continue to be spent on foreign products for our infrastructure.
"We can no longer rely on a failed paradigm of depending on China and other foreign sources for the products and materials we need to build our critical infrastructure. Our national security, economic strength and cleaner economy are all dependent on rebuilding supply chains and reducing our dependence on unreliable foreign sources.
"Critically, we are encouraged that OMB's guidance follows Congress' directive to adopt comprehensive origin standards for construction materials that apply to manufacturers throughout the supply chain—from upstream raw materials all the way to end products. Lawmakers developed the Build America, Buy America provisions to maximize the historic infrastructure law's job creation potential. The law should be fully implemented in accordance with Congress' intent.
"The details of Buy America implementing policies are critical. As we continue to read and digest the entirety of OMB's guidance, we will continue to stress the importance of strong Buy America implementation policies with the administration and Congress.
"Buy America is a rare issue of bipartisan agreement, with both Congress and the administration agreeing with the American public that federally assisted infrastructure projects should utilize products and materials made here at home by America's workers."
Background:
The bipartisan Build America, Buy America (BABA) Act—enacted in the Bipartisan Infrastructure Law (BIL)—enhances existing Buy America laws in two ways:
- First, BABA ensures that all federally assisted infrastructure projects adhere to Buy America. For decades, Buy America preference laws have required the use of certain American-made inputs for federally assisted highways, transit, water, infrastructure, and many other types of projects. Commonsense waivers are available to overcome any short-term market limitations, such as excess cost or non-availability. And, these laws are fully compliant with U.S. international obligations.
- Second, BABA broadens the types of products and materials covered by Buy America. This includes commonly used construction materials, such as copper, aluminum, glass, lumber, drywall and fiber optic cable. Prior to enactment, these laws generally applied only to iron and steel products and, in limited cases, certain manufactured products.
Because existing Buy America laws were limited in their coverage, eroded by waivers and narrowed further by agency loopholes, billions of federal assistance infrastructure dollars were being used to purchase foreign-made products and materials, bypassing American workers ready to manufacture these materials and products.
The new BABA law also requires that waivers be thoroughly reviewed, narrowly applied and made public, inducing powerful market signals for companies to invest in the United States.
Recent polling conducted by Morning Consult on AAM's behalf found that an overwhelming majority (83%) of voters agree that "taxpayer dollars should go toward infrastructure projects that utilize American-made products like iron, steel and other construction materials versus products that are imported from foreign countries."
Reinvesting America's tax dollars here at home benefits American workers by giving companies a powerful incentive to invest in U.S. operations. Yet, without strong Buy America policies, taxpayer spending too often rewards companies that have moved their operations and jobs offshore.
By promoting investment in domestic manufacturing, Buy America policies ensure that taxpayer-funded investments align with the highest labor and environmental standards in the world. Strong Buy America policies act to prevent shifts in production to countries that rely on practices that are significantly less energy efficient and far more polluting than here in the United States.