Pentagon funnels billions to foreign factories ignoring Buy American laws
Our Buy American Mention of the Week!
by Roger Simmermaker
November 2, 2014
Senator Chris Murphy (D-CT) is hopping mad and for good reason. The former co-chair of the Congressional Buy American Caucus is accusing the Pentagon of ignoring Buy American laws, procuring goods overseas when they are available domestically, and sacrificing good-paying American jobs by opting for supposedly cheaper imports.
Senator Murphy says that the Pentagon is funding foreign factories to the tune of $160 billion dollars over the last seven years, costing an untold number of American jobs.
Ever since the Buy American Act was passed in 1933 (signed into law by Republican President Herbert Hoover in his last full day in office) all federal agencies are required to purchase at least 50 percent of the product they need from factories in the United States.
They can, however, file a waiver if what they're looking for isn't available domestically. The problem is that all too often waivers are filed without actually checking to see if American workers can supply what is needed.
For example, a simple Google search would have revealed a Connecticut company that makes doorknobs and door handles, but the Pentagon wrote a quick "non-availability waiver" and ended up getting what they needed from overseas instead.
Sure, the Pentagon can save maybe five or ten percent of the cost by going offshore, but that supposed savings pales in comparison when you factor in the cost of the lost American jobs and the resulting loss of tax revenue paid by the formerly employed American workers. And the Pentagon obviously doesn't factor in the potential future taxpayer-funded outlays for things like unemployment benefits.
The Pentagon is certainly no stranger to non-availability waivers. They issued over 28,000 of them just last year alone. How many of those waivers were granted out of convenience because no one in government wanted to do the necessary legwork and seek out American-made suppliers before spending (and sending) American taxpayer dollars overseas?
Senator Chris Murphy says we need stricter enforcement of the 1933 Buy American Act, which would shut down the excessive and unnecessary use of American job-killing non-availability waivers. Getting tough on Pentagon procurement practices might go a long way towards benefitting both small and mid-size domestic producers across the country.
Our Founding Fathers would certainly be against the excessive and unnecessary funding of foreign factories. The wisdom of our first president, George Washington, who was one of the first to advocate a Buy American policy, still rings true today. His personal decisions and actions strengthened America's economy.
In the 1760s, Washington's lone cash crop was tobacco, most of which he exported to England, and he relied on an agent to use most of the profits to purchase imported finished goods. Later on, Washington formed his own personal Declaration of Independence from England. This came about as a direct result of Washington being unable to audit his agent's activities and being unable to determine whether he was being treated honestly. Washington switched from raising and exporting tobacco to raising corn and wheat, which were sold to local merchants, and he used the profits to buy finished goods from American craftsman. In his historical farewell address, Washington said, "There can be no greater error than to expect or calculate upon real favours from nations."
Americans feel a strong connection to the wisdom of our Founding Fathers. Travel around our great country, and you will see quotes from these remarkable men gracing the walls and halls of our buildings. One of our greatest statesmen, Thomas Jefferson, offered this about buying American, "I have come to a resolution myself, as I hope every good citizen will, never again to purchase any article of foreign manufacture which can be had of American make, be the difference of price what it may."
Our Founding Fathers had the unique wisdom to know that the initial price savings (and dependency) of supposedly "cheaper" imported goods was more than outweighed by the long term cost of lost jobs, lost tax revenue, and lost profits.
In today's economy, keeping, saving and creating American jobs is, to borrow a phrase from Ford Motor Company, job one. The good news is that you don't have to be a corporation or a small business to make a difference for America. Every economist knows that two-thirds of all economic activity is based on consumer spending. So despite government abuses of the Buy American laws we have on the books, we as consumers can form our own Declaration of Independence from foreign producers, just like our Founding Fathers did many years ago, by buying American-made products whenever and wherever they're available.