If Congress feels like an eternal battle of one step forward, one step backward, this month’s markup of the mammoth $778 billion National Defense Authorization Act in the House Armed Services Committee is testimony to that.
In one vote, a Buy American Act provision to make parts of a Navy ship brought up by Rep. John Garamendi (D-CA-3) was shot down by Rep. Rob Wittman (R-VA-1). The two went toe-to-toe twice on September first in the first half of the session that took lawmakers from mid-morning into dinnertime. It was a draw.
Wittman then locked horns over the same issue in the second half of the debate on the markup that resumed that evening, this time with Rep. Donald Norcross (D-NJ-1).
The emotional back-and-forth is a reminder of the difficulties at hand in convincing some members of Congress to advocate for, and move faster on, strengthening domestic manufacturing and local supply chains.
Norcross’s amendment (Log No. 699) to increase domestic content on major defense contracts from 55% to 60%, gradually reaching 75% over the course of 8 years, did not exempt NATO member nations, major non-NATO allies, and almost all of Europe from participating in those bids. But Wittman thought, as he had earlier in the day, that we needed more studies on delivery times and cost overrides (Log No. 1502).
Judging by his talking points, it seems probable that Wittman is getting an earful from Norfolk, Virginia shipbuilders, his constituents. He says they tell him they cannot find the materials they need in the United States. And so because of that, it’s taking too long to get the work done. Ships delays are stretching close to two years.
Norcross, Garamendi, and Rep. Elissa Slotkin (D-MI-8) pushed back against Wittman, who immediately offered his substitute amendment to wipe out Norcross’s amendment to increase the weighted American content in major defense acquisition programs (think submarines and military drones).
Norcross said he has spent the latter part of a year speaking with defense contractors, getting a sense of the bidding process and the content requirements for Department of Defense deals. His amendment would not impact existing contracts.
Norcross said that his main point in offering up the amendment was to “bring some of those jobs back home. There was certainly never any studies when work went offshore and we lost job after job to foreign companies.”
It’s a valid point. The most recent big picture study on trade agreements by the International Trade Commission showed that they largely benefit multinational corporations. This has come at the detriment of middle of the supply chain manufacturers, and blue-collar workers, especially those with only high school degrees. That report is one recent example of how these old-school, one-world kumbaya policies have impacted domestic supply chains and American labor markets. It must be similar for manufacturers of C-130s, too, outsourced in part to India’s Tata Group, by the way. They make the tail wings in Hyderabad.
See full ITC study here: and CPA chief economist Jeff Ferry’s thoughts on it here.
Norcross said Wittman, and others of the same mind, keep “moving the goalposts” on Buy American provisions, continuing to lengthen the duration of time we give contractors to start making products in the U.S. and often preferencing procuring from allies.
Norcross: What we heard last year (from defense contractors) was that they needed predictability. So, in the event that the contract is against the public interest, the waiver is there; if there is no domestic availability, they get a waiver there; if there is unreasonable cost, they get a waiver there. Trade agreements, 27 countries, all of NATO, are part of this. But we have the ability to bring this back home in a fair and equitable way. Major defense acquisitions now have the ability to make the decisions as to what they want to onshore. It’s time to consider the American worker and how tough they’ve had it. Please, we have worked with you for the last four years. Don’t move the goalposts again. Vote in favor of this amendment.
Wittman: We still see that a lot of our contractors have difficulty meeting the 50% domestic threshold.
Norcross dug in.
Norcross: This didn’t happen overnight. We had nine years for the industry to start onshoring things. You know what we’re not hearing…that we can’t get American products; that we can’t meet 50%. And again, all of the countries I’ve mentioned earlier are already considered Made in America.
It’s true. The Buy America Act is full of holes. Norcross calls it a “Swiss cheese” rule. Exempt countries include dozens who are part of the World Trade Organization’s Government Procurement Agreement, which happens to include Hong Kong, now considered by many (and surely by the CCP) to be just another city in mainland China.
Wittman’s substitute amendment called for a review of the impact of hiking content requirements for major acquisitions. He countered Norcross, saying it might be easy for industry to make those decisions today, but “there is no data that suggests that they can. What we have seen in many instances is that they cannot.”
Wittman made similar arguments to his winning substitute amendment from earlier in the day. Nearly every Republican on the House Armed Services Committee voted in favor of more studies regarding costs and delays, likely because those two concerns trumped immediate concerns over Buy America provisions.
One of the more interesting exchanges was when Chairman Adam Smith asked Norcross for clarification on how the Buy America Act (BAA) really works.
Smith: This isn’t really just that you have to buy it in America; there are like 27 other countries?
Norcross: Yes. Twenty-seven countries; every NATO member, including South Korea and Japan. Purchasing from them, under these rules, is actually considered Made in America already.
Wittman: Buy America requires all procurement comes from domestic sources.
Norcross: Yes, but it doesn’t matter. According to the BAA, if you buy from Germany, it is considered Buy America, not foreign.
Smith: It is important that we start building a more reliable trusted supplier base. But that reliable supplier base can’t always just be American.
He said he wanted to give our allies a shot at it too. “I want to build that up, and give them an opportunity,” Smith said, as if he was against Norcross and in favor of Wittman. He would later vote in roll call in favor of Norcross.
Wittman insisted that Norcross’ increase in domestic content would lead to bottlenecks. But Norcross said he wasn’t hearing that from his defense contractor sources.
Norcross: These are the purchasing decisions that are being made now to get to 55%; so moving to 60 doesn’t change the idea of needing to know more ahead of time. They know where these products are. It’s not holding us up on major acquisition programs.
Wittman: We can’t make this out of thin air.
Garamendi, fresh off previous bouts with Wittman, fired back in defense of local contractors. He gave an example in a heated speech peppered with an expletive.
Garamendi: I guess I’m so damn tired of hearing you can’t do it in America. Under the American Recovery Act, $800 million was put in for 16 locomotives for Amtrak. And there was a requirement that they be 100% American-made. This is the American Recovery Act, around 2009. General Motors said 100% American? Can’t be done here. But there was this little old company out in California called Siemans America, and they said, ‘800 million dollars, hmmm. 100% American-made? We can do that.’ And they did. They did it within three years. They established outside of Sacramento, a major manufacturing facility. So don’t sit here and tell me we can’t do it in America. We can’t do it in America because this committee doesn’t require it to be done in America. This amendment is so easy to achieve. If we don’t have the courage to stand up to industry and say (expletive) get it done…then they won’t ever make it in America.
Slotkin: We went through a whole year of watching what happens when so much of our supply chain is dependent on other countries. It flagged to us that we need to understand our defense supply chains and so if the past year and a half hasn’t pushed members forward on this issue then what will? Of course we know we can buy it from other sources from abroad. But haven’t we learned we need more resilience…enough to push for more American requirements? This is not about removing waivers. If you can’t find something here, use the waiver. If the past year and a half haven’t pushed us to care more about what’s made in America…what will?
Here’s how they voted.
A yes vote was in favor of Wittman’s substituting amendment and a no vote was in favor of the original Norcross amendment to gradually hike content requirements to 75% over 8 years. There was some cross-over from a similar floor vote. For instance, Republican Vicky Hartzler and Democrat Elaine Luria voted against Wittman this time.
In this case here, “no” is the vote CPA wants as it is a vote against Wittman’s substitution to the Norcross amendment.
Chairman Smith later held a vote for the underlying amendment by Norcross and that passed. Norcross won.
The NDAA came down like this in the end: two specific roll-call votes on amendments won in favor of Buy American provisions, and one vote on an amendment against it and in favor of more studies. Two to one? A win’s a win. But it’s clear many House Members still have a lot to learn about why making things in America is good for America and good for national defense, regardless of price. Delays can be remedied by building up stronger, local supply chains.
The FY22 NDAA awaits floor consideration later this month, with all Members of the House filing amendments to the bill as reported out of the Armed Services Committee.
So far, a whopping 800 amendments have been filed.
CPA will be tracking amendments deemed worthy of floor consideration by the prestigious House Rules Committee and what sorts of debates will be allowed to take place on the House Floor.
Final House votes are expected as early as next week, and then it is off to the Senate for their crack at their version of the NDAA on the Senate floor.
All of this sets the table for the House and Senate versions of the NDAA being combined together in a conference process, then it is off to final passage in both chambers, hopefully by Christmas.