Rahall's bill would hurt the economy
Rep. Nick Joe Rahall, D-W.Va., the ranking Democrat on the House Transportation Committee, has proposed the "Invest in American Jobs Act of 2013." A more accurate title would be the "Increase the Cost to Taxpayers Act."
Using the rallying cry of "made in America," Rahall's bill would require contractors to buy U.S. products as long as they cost no more than 25 percent more than the foreign supplier.
Put another way, companies would be able to charge up to 25 percent more for steel or manufactured goods and still win the bid.
Rahall complained about a $6.3 billion bridge that will soon open in the San Francisco area.
"But instead of steel cast in the Alleghenies or roadbed segments assembled in Alameda, cars and trucks using the bridge will be driving over 43,000 tons of steel imported from China, which supported 3,000 Chinese jobs and was financed by U.S. taxpayers," Rahall said.
Steel costs about $800 a ton. His proposal would increase that to $1,000 a ton. In short, the nation would borrow more money from the Chinese to finance a public works project in California. In addition, the proposal could violate free trade agreements.
This is protectionist legislation that punishes the American taxpayer.
Proponents said a study estimated that "Buy American" requirements for buses and railroads would create almost 13,000 additional jobs.
The U.S. Chamber of Commerce has long said such protectionist legislation has the opposite effect.
"Outside the United States are markets that represent 80 percent of the world's purchasing power, 92 percent of its economic growth, and 95 percent of its consumers," the chamber says on its website.
Not only do such proposals invite retaliation from foreign nations, but they lift the pressure on U.S. companies to compete worldwide.
As for job creation, "If foreign governments lock U.S. companies out of just 1 percent of this total spending, the Chamber estimated net U.S. job loss could surpass 170,000," it said.
Rahall's bill would be bad for this country.
Instead of requiring the use of American-made products in the United States, manufacturers should learn how to compete in China, where demand is growing.