Trojan Horse? The ‘Buy American’ Keystone Amendment Could Hurt Americans

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Peter Fricke Contributor
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Critics are calling on Congress to reject a proposed “buy American” provision in the bill approving the Keystone XL pipeline, calling it anti-trade cronyism.

Last week, Democratic Sen. Al Franken proposed the amendment “to require the use of iron, steel, and manufactured goods produced in the United States in the construction of the Keystone XL Pipeline and facilities,” and it could come to the floor during Senate debate of the Keystone bill this week.

On Monday, the free-market advocacy group Club for Growth issued a key-vote alert urging lawmakers to oppose the amendment, warning that, “A vote is expected as early as tomorrow.” (RELATED: Senate Keystone XL Bill Moves Forward Without a Veto-Proof Majority)

“This protectionist bill … will likely lead to higher costs and fewer jobs,” the group claims,  adding that, “Worse, it might invite retaliation from other countries, as has happened in the past when Congress has approved ‘Buy American’ language.”

Moreover, they argue that the amendment “is also inherently cronyism,” in that involves politicians making a law that gives preferential treatment to some companies over others, generally at the taxpayers’ expense. “In that sense, this amendment is nothing more than an earmark.”

The center-right Cooler Heads Coalition agreed with that assessment in a recent blog post, writing buy American laws “are a headache to comply with and increase taxpayer burdens for the benefit of special interests.” (RELATED: House Passes 10th Keystone XL Bill Despite a White House Veto Threat)

Normally, such protectionist measures are only imposed on “entities that spend or consume tax dollars,” which is bad enough, but the proposal is especially objectionable in this case because “the TransCanada Corporation is not an agency of any government, and all funding for the Keystone XL pipeline would be private,” the post contends.

“Subjecting a privately-financed project to domestic content restrictions would set a dangerous precedent,” they argue, potentially “opening the door to massive new intrusions on entrepreneurial liberty.”

But according to The Hill, the Franken amendment is just part of a broader Democratic strategy to make it more difficult for Republicans to pass the Keystone XL bill. (RELATED: Scientists: Keystone XL Won’t Cause More Global Warming)

Lacking the votes to kill the legislation, The Hill says, “Senate Democrats opposed to the pipeline are offering amendments that they think will be tough for the GOP to vote against or that will play well in the 2016 elections.”

Other such measures include an amendment proposed by Socialist Sen. Bernie Sanders that would put Congress on record agreeing that human activity is responsible for climate change, as well as one proposed by Democratic Sen. Ed Markey requiring companies using the pipeline to contribute to an oil spill cleanup fund.

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