In his inauguration speech, President Trump promised: “We will follow two simple rules: Buy American and Hire American.” The president will sign an executive order Thursday – titled “Strengthening Buy American Preferences for Infrastructure Projects” – that will further bolster these key pillars of his economic program.
Each year, more than 30 federal agencies award over $700 billion in federal financial assistance to more than 40,000 non-federal recipient organizations. This assistance comes in the form of loans, loan guarantees, grants, cooperative agreements, insurance and interest subsidies.
A more granular look at this federal financial assistance reveals that billions of taxpayer dollars fall through possible gaps in Buy American coverage.
Consider that, in the 2016 fiscal year, of the 265 listings in the Catalog of Federal Domestic Assistance for infrastructure or construction projects, more than 200 did not require Buy American considerations. These projects across 14 different agencies added up to over $45 billion of expenditures.
The Buy American executive order the president will sign Thursday will make progress in closing potential gaps in coverage.
This new executive order directs the head of each executive department and agency administering a covered program to “encourage recipients of new Federal financial assistance awards to use, to the greatest extent practicable, iron and aluminum as well as, steel, cement, and other manufactured products produced in the United States in every contract, subcontract, purchase order, or sub-award that is chargeable against such Federal financial assistance award.”
The types of infrastructure potentially covered run the gamut from bridges, water infrastructure, and sewer systems to broadband Internet and cybersecurity.
By extending Buy American principles to more federal financial assistance programs, this new executive order further reinforces the Trump administration’s Buy American preferences. When taxpayer-funded spending is used to Buy American, Americans can reap the benefits in three ways.