The Biden administration has taken a crucial step towards ensuring federal dollars support U.S. Manufacturing by issuing requirements regarding how projects funded under the $1 Trillion bipartisan infrastructure package source construction material.
Monday’s new guidance requires that material purchased for bridges, highways, water pipes, or broadband internet must be made in the United States. The rules include a procedure to waive these requirements if there aren’t enough domestic producers or the material is too expensive. This goal is to issue fewer waivers as U.S. manufacturing capacity grows.
Celeste Drake, Director of Made in America at White House Office of Management and Budget said that “there are going to be additional opportunities in the manufacturing sector.”
President Joe Biden wants to create more jobs and ease supply chain strains. He also hopes to reduce America’s dependence on China. He believes that domestic production will eventually reduce prices to counter Republican criticisms that his $1.9 billion coronavirus relief package originally triggered higher prices. Inflation is at an all-time high of 40 years before the 2022 midterm election.
Biden stated Thursday that “From Day One, all actions I took to rebuild our economy have been guided by one principle: Made In America.” It takes a federal government who doesn’t just talk about buying American, but actually does something.
Biden stated that $700 billion that the government spends annually on procuring goods should be used to prioritize U.S. suppliers, but regulations dating back to the 1930s have been diluted or applied in ways that obscure foreign imports.
Despite the fact that $350 billion is spent on infrastructure construction each year, the administration couldn’t tell what percentage of existing construction material is U.S.-made. These guidelines will allow government officials to determine how much money goes to U.S. workers or factories.
The bipartisan infrastructure package, which was passed last November, contained a requirement that no federal funds for projects be spent starting May 14, “unless all the iron, steel and manufactured products used in the project were produced in the United States.” This is according to Monday’s 17 page guidance.
The guidance contains three standards to allow these requirements to be waived. These are: if the purchase is “incompatible with the public interest”, if the materials needed aren’t “in sufficient and reasonable quantities or of satisfactory quality”, or if U.S. material increases a project’s costs by more than 25%.
American manufacturers have 170,000 fewer jobs than the 12.8 million jobs in the factory. This is because manufacturing jobs started to decline before was born. The U.S. now has 6.9 millions fewer manufacturing jobs than at the peak in 1979. This is due to automation and outsourcing.
As manufacturers operate at a 78.7% capacity, the Federal Reserve notes that this is higher than the historical average. This will increase the likelihood of industrial jobs.