Stimulus package: "Buy American" provision - in our out? Yes.

Jake Turcotte

Sometimes you can't get a song out of your head, no matter how hard you try. The theme to "Welcome Back Kotter" is a perfect and terrifying example.

With the "Buy American" provisions being debated in the economic stimulus bill, the Oak Ridge Boys's "American Made" might just have that effect on you - be you unfortunate enough to know the song.

Regardless, it has turned out to be one of the few controversial things in the package (the provision, not the band).


Maybe it's more than a few. There's always the price tag. Some people think $1 trillion isn't nearly high enough. And others claim that there needs to be much more government intervention in order for it to work.

There are even some who think it's too expensive and too government heavy!

In or out?

But overlooking these details, when asked this morning if President Obama wanted the "Buy American" provision dropped from the package, Transportation Secretary Ray LaHood responded with a definitively firm non-answer.

"I think there is going to be a lot of discussion about the Buy American provision in the conference," LaHood said. "And I think you're going to see the president weigh in on this. And I haven't talked to the president directly about it, but..

"Is that an in or an out?" CNN host John King questioned.

"I think there is going to be a lot of discussion about it, John," he said, providing insight to the lack of clarity he wished to divulge.


The folks at Caterpillar, headquartered in Peoria (part of LaHood's former congressional district), don't like it.

"Our position is that, while 'Buy American' may sound good, in fact we're very concerned that if this stimulus legislation contains the 'Buy American' provision, other nations and regions of the world would follow our lead and pass similar provisions," spokesman Jim Dugan told the Indianapolis Star.


That's what President Obama seemed to say as well when speaking to ABC's Charlie Gibson earlier this week.

"Provisions that are going to be a violation of World Trade Organization agreements or in other ways signal protectionism - I think that would be a mistake right now," he said. "That is a potential source of trade wars that we can't afford at a time when trade is sinking all across the globe."

So while it would appear that he's leaning in this direction, anything can happen in the next few days. What are economists saying about it? Read this piece by Monitor colleague David Francis.

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