Obama’s free traders mum on protection

Free-traders on President Obama’s economic team are suppressing concerns over Buy American provisions in the stimulus, derided as protectionist by corporate lobbyists.

Treasury Secretary Timothy Geithner and Obama’s top economic adviser, Lawrence Summers, have raised no objections to tough provisions in the House stimulus bill intended to ensure that U.S. iron and steel are used in any infrastructure projects, such as the construction of highways and bridges, even if they add to the project’s cost.

Nor have they complained about a provision in the Senate bill that would go much further by calling for the use of U.S. iron, steel and other manufactured goods in infrastructure spending in the stimulus.

Some interests have also called for language to ensure that any spending on health technology in the stimulus goes to U.S. firms, and not those in India.


Support in both chambers means the iron and steel provisions, at a minimum, seem likely to be included in the bill sent to President Obama’s desk, despite an outcry from business groups and foreign governments that argue they could set off a new trade war.


Robert Reich, President Clinton’s secretary of Labor, said Summers and Geithner have probably calculated the criticism from abroad and decided that the higher costs of some projects are worth the political price.


“n this case, when American taxpayers are paying a huge amount of money to stimulate jobs in the United States, the argument can be made that the extra cost to the government and the slight antagonism of foreign governments may be worth it,” said Reich, who sparred with Summers and Clinton Treasury Secretary Robert Rubin over trade.


He said if the U.S. stimulus bill leads foreign governments to pass similar bills benefiting their own domestic industries, “so much the better.”


http://thehill.com/leading-the-news/obamas-free-traders-mum-on-protection-2009-02-02.html