Just in time for Tax Day, former Vice President and presidential candidate Joe Biden says he wants to bring "further immediate relief" to struggling Americans in response to the coronavirus pandemic. Unfortunately, his recently proposed policies would straddle taxpayers and consumers with higher costs at the worst possible time.
Biden’s “Build Back Better” plan would impose onerous “Buy American” requirements on taxpayers, ensuring that the government will pay far more than it needs to for health care, infrastructure and defense.
This Tax Day, politicians and presidential candidates should commit to policies that tap into global and resilient supply chains that strengthen the United States and our allies while reducing taxpayer costs. Global trade is a boon to everyone and leads to lower costs for everybody involved. With the federal deficit nearing $4 trillion, it’s time for low cost, pro-taxpayer procurement policies.
Biden isn’t about to let President Donald Trump “out-American” him. Likely in response to reports that the president is considering beefing up “Buy American” federal purchasing requirements, Biden unveiled his own protectionist plans. On his campaign website, Biden touts that his “comprehensive manufacturing and innovation strategy will marshall [sic] the resources of the federal government in ways that we have not seen since World War II.”
It’s almost never a good sign when a politician or presidential candidate invokes the second World War to justify greater spending. Instead of devoting taxpayer dollars toward defeating Nazis, Biden wants to, “make a $400 billion Procurement Investment that together with the Biden clean energy and infrastructure plan will power new demand for American products, materials, and services and ensure that they are shipped on U.S.-flagged cargo carriers.”
According to a Heritage Foundation analysis, bids made by domestic companies are usually about 25 percent more expensive than foreign bids. For a $400 billion federal “investment,” that implies total costs will likely reach $500 billion. Even that bloated figure fails to account for good ol’ fashioned overruns related to procurement and construction, which would probably tack on an additional 20 percent to costs. With an extra $100 billion (plus), the federal government could give 10 million struggling small businesses across the country an extra $10,000 in tax relief to save and invest.
Yet, the former vice president and his campaign team prefer complicated protectionist schemes to straightforward relief and tax reform. For all the rabble-rousing centered around “Buy American” schemes, there’s precious little evidence that these policies save American jobs. Despite the domestic steel industry being heavily targeted by federal domestic preference provisions over the past 40 years, employment in the sector has more than halved since 1980.
Biden seems to be following the lead of President Trump because the current administration is purportedly considering an executive order that would make it nearly impossible for the government to procure critical health care supplies from abroad. Tens of millions of Americans who rely on insurance plans sponsored by the Departments of Defense, Health and Human Services, and Veterans Affairs would suddenly find it far more difficult to get the drugs they need to live normal, pain-free lives.
Since approximately 80 percent of active pharmaceutical ingredients are produced overseas (mainly by U.S. allies such as India and European countries), it’s unclear how patients would be able to get lifesaving medications. Let’s hope that Biden doesn’t follow suit with a similarly disastrous “Buy American” plan for health care supplies, especially during the worst pandemic in 100 years.
If history is any guide, candidates for higher office are often unable to resist patriotic-sounding protectionist policies that fail ordinary Americans. Biden should back off this pointless “Buy American” tit-for-tat with President Trump and champion policies that will actually help taxpayers and consumers.
* This article was originally published here
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