President Joe Biden lambasted "past administrations" that have flaunted requirements to buy American-made materials for federal infrastructure projects in his State of the Union address. He might want to look in the mirror.
"Buy American has been the law of the land since 1933. But for too long, past administrations have found ways to get around it," said the president Tuesday night. "Not anymore. Tonight, I'm also announcing new standards to require all construction materials used in federal infrastructure projects to be made in America."
The new standards Biden mentioned are actually standards established by Congress that would be in effect today but for waivers created by his administration. These requirements have long been found to increase the costs of infrastructure projects, but the promise of creating even more cost-increasing American jobs makes them a popular provision.
The $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), which Biden signed into law in November 2021 re-upped requirements that federally funded infrastructure use American-made iron and steel. It also expanded those requirements to construction materials like drywall, copper wire, fiber optic cables, and lumber.
Biden was so proud of those new Buy America provisions, he made sure to mention them in his 2022 State of the Union address.
"I'm announcing that this year we will start fixing over 65,000 miles of highway and 1,500 bridges in disrepair," said the president that night. "When we use taxpayer dollars to rebuild America, we are going to Buy American. Buy American products to support American jobs."
Those requirements were supposed to kick in within 180 days of the law's passage. Right before they did, the Biden administration's Department of Transportation (DOT) issued a sweeping 180-day waiver for new Buy America provisions for construction materials, citing the cost and complexity of complying with those provisions.
Public comments from state departments of transportation, public transit agencies, and contractors all generally supported this waiver and, in fact, asked that it last for at least 18 months and as long as four years.
The reason is pretty straightforward: Buy America provisions greatly increase the costs of infrastructure projects.
As I noted during Biden's last State of the Union, buying American steel for infrastructure projects costs around twice as much as importing it from China, according to a 2019 Congressional Research Report. The mandate cost American roadbuilders an additional $2 billion from 2009 to 2011, back when then-Vice President Biden was overseeing the spending of stimulus dollars on infrastructure projects.
Procuring American-made buses means that we pay twice as much as Japan and Korea do for their rolling stock. Our train cars cost as much as 34 percent more because we insist on buying American.
DOT officially let that waiver lapse as scheduled in November 2022. But in January, it also issued regulatory guidance extending that waiver for contracts on DOT-funded projects through March 2023 for solicitations offered before May 2022.
Expanding Buy America provisions, and cracking down on waivers, are a staple of all administrations and most State of the Union addresses. The fact they keep exempting themselves from these requirements shows that Biden—and his predecessors—understand at some level that they're a bad idea.
Rent Free is a weekly newsletter from Christian Britschgi on urbanism and the fight for less regulation, more housing, more property rights, and more freedom in America's cities.