Quality Magazine

Senators Propose Stricter "Buy American" Rules for Clean Energy Programs

March 11, 2010

WASHINGTON - There is a renewed call from some on Capitol Hill for stricter “Buy American” regulations when it comes to American Recovery and Reinvestment Act (ARRA) funding, particularly for renewable energy programs.

It is safe to say that most Americans who supported the $787 billion ARRA assumed the funding would be awarded to U.S. companies to create U.S. jobs. That is not case, according to four Senate Democrats who recently wrote Treasury Secretary Tim Geithner and Energy Secretary Steven Chu requesting that the Administration suspend a key wind energy stimulus program because the bulk of its funding has gone overseas.

In their letters to Secretaries Geithner and Chu, Senators Chuck Schumer (D-NY), Bob Casey (D-PA), Sherrod Brown (D-OH) and Jon Tester (D-MT) pointed to a report by the Investigative Reporting Workshop (IRW) that found that nearly 80% of the $2.1 billion awarded under this program thus far has gone to foreign-based companies. The senators voiced concern that the United States is falling behind its trading partners in renewable energy investments, and requested a moratorium on stimulus clean energy grants until legislation can be enacted that ensures funding from clean energy stimulus programs go toward creating U.S. jobs.

The day after sending the letters, the four Senators plus Pennsylvania Senator Arlen Specter (D-PA) introduced the American Renewable Energy Jobs Act (S. 3069) that would require that ARRA funds be given only to those clean energy projects that rely on materials manufactured in the United States and/or create a majority of jobs in this country.

Under the so-called “Buy American” provision contained in the ARRA, government projects financed in part by the stimulus must, with few exceptions, rely on iron, steel and manufactured goods produced in the United States. But the provision does not impose a similar requirement on private projects that seek stimulus grants. The senate measure would apply the “Buy American” standard to all renewable energy projects, no matter public or private, that seek stimulus funds. S. 3069 also would ensure that grant money is distributed only to renewable energy projects that preserve and create jobs in the United States.

The senators have received a fair amount of opposition to their proposal. The Energy Department hit back stating that suspending the wind energy program now would result in immediate layoffs at U.S. manufacturing plants, while the American Wind Energy Association issued a statement calling the IRW report misleading. One thing is certain: These senators from states that have the most to lose when clean energy funds go offshore will continue to pressure the Administration to take action to keep stimulus money on American soil.