Republicans urge Obama to roll back "Buy American"

By Doug Palmer

WASHINGTON (Reuters) - Republicans urged President Barack Obama on Thursday to roll back "Buy American" provisions of this year's economic stimulus package that they said were delaying public works projects and costing American jobs.

"Clearly these provisions are creating problems for our domestic companies and employees that must be addressed," Representative Wally Herger said at a "roundtable" Republicans organized to hear industry concerns about the measure.

Representative Kevin Brady urged the White House to exempt state, county and city governments from the Buy American requirement "so that we can get those dollars working, create these jobs, get these projects in place and move this economy."

The Republicans said they held their event because Democratic leaders of the House of Representatives Ways and Means Committee refused to hold a hearing on the issue.

The Buy American provision included in the $787 billion economic stimulus act requires all public works projects funded by the bill use only U.S.-made goods.

As a result, many local jurisdictions receiving Recovery Act funds are faced with ensuring that their projects comply with the Buy American mandate.

That's not as simple as it sounds because many products contain components from around the world.

The Buy American mandate has "had a devastating impact on municipal procurement and especially in the U.S. water and wastewater market," said Dawn Kristof Champney, president of the Water and Wastewater Equipment Manufacturers Association.

Communities that had projects ready to go have had to go back to the drawing board, she said.

Tom Pokorsky, president of Aquarius Technologies, estimated the number of water and wastewater projects in the United States was down about 30 percent this year, the worst he has seen in his three decades in the business.

RETALIATION FEARS

"I think it's because, in fact I know it's because projects were delayed awaiting stimulus money and then they were delayed awaiting interpretation of the rules for Buy American, which still aren't complete," Pokorsky said.

It will be at least a few more weeks before the White House budget office finishes drafting final rules for the Buy American provisions, a spokesman for the office said.

Groups calling for changes in the Buy American provisions include the U.S. Chamber of Commerce and the Emergency Committee for American Trade, which together represents most of the biggest U.S. companies.

They said they feared other countries would retaliate by passing their own "buy domestic" provisions, as Canadian cities are threatening to do because their firms are being shut out of U.S. stimulus projects.