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More on the self-defeating Schumer Buy American effort

More on the self-defeating Schumer Buy American effort

The proposal by New York's Sen. Schumer and a handful of others to shut off the flow of Treasury grants to new wind projects illustrates the self-defeating nature of current Congressional policy towards jobs and manufacturing. As the Energy Department's spokesman said yesterday, “Other countries are not pressing the pause button on clean energy industries, and they will move quickly to capture America‚Äôs share of the global market while we sit on the sidelines.”

Consider the big picture: The U.S. economy has not yet fully emerged from recession. Unemployment is still hovering around 10 %. The Recovery Act has been pumping money into job creation initiatives, including new wind energy projects, in order to stimulate the economy and keep more people from losing their jobs. By AWEA's estimates, approximately 40,000 American jobs were saved by the stimulus program due to projects that went went ahead because of the financing help provided by the Recovery Act.

The Schumer proposal would shut the program down, leading to lost jobs, because no wind developer could meet the strict requirements of the Schumer Buy American amendment–the United States simply does not have the manufacturing capacity yet to produce 100% of the turbine parts. Lost in the shuffle would be the good jobs that would go to Americans if Treasury continued to provide assistance to new U.S. wind projects: construction, engineering, transportation, and the manufacturing of those turbine parts–more than half–that are made in the United States.

Also lost would be the momentum the industry has developed in the last five years toward building a turbine manufacturing capability as investors see strong demand for wind energy and agree to finance new plants. As the Energy Department spokesman said, “The best way to stimulate our manufacturing base is to stimulate demand for wind turbines in America, since manufacturers tend to locate where the demand is. “

Why would a group of intelligent Senators, in the name of “saving” American jobs, knowingly champion a job-losing scheme? You have to go back to last November, when a consortium of American and Chinese firms announced a vague plan to build a wind project in West Texas. In the course of the announcement, they noted that the turbines would be coming from China, and the Recovery Act funds would be used to finance it. The plan was attacked by some in Congress as “sending jobs to China.”

Fast forward to the present. If you listen to the Senators behind the Buy America proposal, the premise is that 1) the West Texas project is already completed and 2) the Treasury sent a special delivery bank draft to pay the Chinese workers producing the turbines. Of course, neither is true–the project has not moved forward–in fact, no one in the industry is holding their breath until this project is finished, because many more wind projects are proposed than ever come to fruition. But that fact has gotten lost, too.

Moral: never let the facts get in the way of a good story–and a bad policy.

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