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Mike Elk

By Mike Elk
Of Campaign for America’s Future

Conservatives have started a disturbing pattern of attacking Democrats for the consequences of weak Buy America provisions in last year’s Recovery Act, even though they opposed the tougher Buy America provisions that would have averted the problems in the first place.

Last week, I wrote about how Republican National Committee Chairman Michael Steele launched this Republican talking point:

… Steele blasted the Obama administration in a fund-raising email earlier this week for allowing stimulus money designated for clean energy solutions to be spent on overseas companies. Which is interesting, because stimulus money going to overseas firms was the direct result of conservative opposition to attempts to keep that money in America.

Now it seems that Sarah Palin has joined the chorus of flip-flopping conservatives opposed to Buy America, who ignore the fact that progressive Democrats were fighting for Buy America language in the stimulus. Palin wrote on her Facebook wall:

“We were promised it would provide “green jobs” for Americans, but 80% of the $2 billion they spent on alternative energy went to purchase wind turbines built in China!”

While some of the money did go to foreign companies to spend on windmill components built overseas, a lot of that money went to the U.S.-based subsidiaries of foreign companies. Russ Choma, author of the study which Palin cites, rebuts Palin in this Politifact article:

The Investigative Reporting Workshop’s story on stimulus dollars and the wind industry came in two parts. In October 2009, it published its first analysis. The group found that of the $1.05 billion in clean-energy grants already handed out by the Department of Energy, about 84 percent — or $849 million — ended up in the hands of foreign wind companies. We spoke with Russ Choma, the story’s author, who explained that these grants are given to U.S.-based wind projects, but that many of these projects are being built by the American subsidiaries of foreign-owned companies. For instance, on Sept. 22, 2009, the DOE awarded $464.2 million to wind projects, and all of it went to local subsidiaries of foreign companies, according to the report. Those companies include Iberdrola, a Spanish company that received $250.9 million; the American subsidiary of Japan’s Eurus Energy, which got $91.3 million; and the American subsidiary of Germany’s E.ON Group, which received $121.9 million. Choma also points out that the wind turbine manufacturing industry in the United States is relatively weak compared to those abroad; of the 1,807 turbines erected in the United States as a result of the stimulus grants, foreign-owned manufacturers made 1,219, according to the report.

Besides Palin misrepresenting the facts, Palin fails to note that her fellow conservative Republicans opposed Buy America language, labeling it“bad for America.”

As I noted last week:

Republican presidential candidate John McCain went on CBS’s Face the Nation on February 8, 2009:

“I think it has policy changes in it which are fundamentally bad for America. For example, their ‘Buy America’ provision: that’s protectionism, and that did not work in any time in our history.”

As recently as October 2009, GOP Congressional leaders held an event to call for the rollback of Buy America provisions claiming that Buy America provisions were “costing American jobs.”

This is just another example of Republicans obfuscating their positions in order to win votes. But what’s disturbing is that there is a margin of truth in what they say. Because Buy America provisions were weak in the stimulus bill, some of the money (though not as much as Palin claims) did go overseas. It happened because Democrats failed to put up a strong enough fight.

That can’t happen again. As Congress considers a jobs bill, it’s important that we encourage members not to compromise on Buy America provisions. If Democrats allow Buy America to be weakened, conservatives will use the result to attack them anyway. They should instead force Republicans into a real, round-the-clock filibuster Buy America language. That will show just how patriotic conservatives are when its comes to using American taxpayer money to give Americans jobs.

Leo W. Gerard

By Leo W. Gerard
USW International President 

It turns out a Texas windmill farm developer’s request last month for nearly half a billion in stimulus funds to create 2,000 jobs in China doesn’t rank first on the audacity scale.

Shockingly for American taxpayers, and sadly for the staggering 10.2 percent of Americans who are unemployed, it doesn’t even rank second.

That’s because Washington already has doled out hundreds of millions in stimulus funds to foreign renewable energy firms. Of the $1.05 billion in clean energy grants awarded by D.C., $849 million — 84 percent — went to foreign wind companies, according to an analysis by Russ Choma of the Investigative Reporting Workshop. He wrote:

“The cash grants were given for the installation of 1,763 megawatts of capacity – 1,566 installed by foreign companies. Using the Renewable Energy Policy Project’s own numbers, as many as 4,500 manufacturing jobs may have been created overseas.”

A strong, broad Buy American clause in the stimulus bill could have prevented the off-shoring of U.S. tax dollars intended to create jobs for unemployed Americans. My union, the United Steelworkers, and the AFL-CIO pushed hard for that language, and polls showed 86 percent of Americans supported it. Republicans and lobbyists for multi-national corporations that wanted to spend U.S. tax money overseas opposed Buy American provisions.

Congress adopted weak, limited Buy American language. Now D.C. exports stimulus dollars to create jobs in foreign countries.  

Some of the foreign wind firms that got stimulus funds have American subsidiaries. But most of them shipped major components for wind farms to the U.S. That means  American stimulus dollars employed foreign workers. One Spanish company, Iberdrola S.A., got $545 million from U.S. taxpayers. 

Sen. Charles E. Schumer, a Democrat from New York, denounced the request to use U.S. tax dollars to create jobs in China and demanded the Obama administration deny funding. But it’s too late for the $849 million in stimulus dollars already given away to foreign wind companies. American tax dollars, meant to create jobs and nurture a green energy industry in the U.S., are gone with the wind.

Lavishing stimulus funds on foreign businesses is tragic for another reason:  Those overseas companies are competitors to fledgling U.S. firms that were supposed to get the money. President Obama has said he wants the U.S. to be “the world’s leading exporter of renewable energy.” That’s not going to happen if the U.S. pays European and Chinese manufacturers to import wind turbines. 

Congress set aside at least $3 billion in the stimulus bill for renewable energy projects. That investment would have two benefits. Growth in renewable energy – from sources such as windmills and solar cells – could reduce dangerous pollution from burning fossil fuels. In addition, the Blue Green Alliance estimated in its report, “Building the Clean Energy Assembly Line,” that U.S. manufacturers could create 850,000 jobs if Congress adopted a national standard requiring 25 percent of electricity to be generated with renewable sources by 2025. 

The key, obviously, is that the wind turbines and solar cells constructed to meet that standard couldn’t be imported for the jobs to be created in the U.S. The U.S. industry, however, needs the kind of help foreign governments give their clean energy manufacturers. The Blue Green Alliance report notes:

“Without new policies promoting domestic manufacturing, an unnecessarily large portion of these jobs will remain overseas.”

Keith Bradsher of the New York Times in a July 13 story described China’s policy to protect and promote its renewable energy industries: “China is shielding its clean energy sector while it grows to a point where it can take on the world.” That includes, Bradsher recounted, a competition last spring where China disqualified all foreign bidders on technicalities for 25 contracts to supply wind turbines. Beijing then awarded the contracts to seven Chinese companies, including some that had never built a turbine.

There’s no reason except a desire to shoot itself in the foot for the U.S. not to protect and promote its own renewable energy industries. “The Building the Clean Energy Assembly Line” report provides recommendations for Congress to cultivate American renewable energy industries, including long-term investment tax credits,  adopting a national standard requiring a minimum percentage of electricity be generated through renewable energy, passing cap and trade legislation, and providing low-interest financing.  

After the Texas windmill incident, I wrote Sen. Schumer asking for bold action to support U.S. clean energy manufacturing. In the letter copied to all members of Congress, I told him we must expand and accelerate the availability of incentives for manufacturing wind turbines and other clean energy technologies – here, in the U.S. One important way to do that is for Congress to extend to the manufacture of components like turbines the funding incentives that are now provided for production of clean energy.

Clearly, another method would be to Buy American. When constructing a wind farm in Texas, why would taxpayers give their money to support importing the turbines from China or Spain when there are perfectly good turbine manufacturers here in the U.S.? 

The Texas windmill farm developer announced this week that its Chinese partner plans to construct a $50 million turbine factory in the U.S., according to a story in the New York Times.  But that facility won’t supply the turbines for the project that the partnership wants $436 million in stimulus funds to support. Those would come from China. So, in the end, it still means nearly half a billion in U.S. tax dollars would create 2,000 turbine-building jobs in China.  

When China passed its $600 billion economic stimulus bill this summer, it adopted “Buy China” provisions. Obviously, as far as wind turbines were concerned, it was implementing a “Buy China” policy before that.

Is the U.S. going to continue thwarting itself and tilting at windmills or is it going to adopt and enforce a robust Buy American policy and build some?