The House of Representatives approved (246-183) and the Senate is preparing to pass the final version of the American Recovery and Reinvestment Act of 2009, H.R. 1. Once approved by Congress, it will quickly head to the President for his signature. AEM has been very active in this process to highlight the importance of infrastructure investment and the dangers of enacting trade protectionist policies.
After intense negotiations the final cost of the stimulus package is $789 billion, down significantly from the Senate's $838 billion and the House's $819 billion versions. Spending provisions make up $507 billion and tax cuts the remaining $282 billion. Full summaries of the spending and tax provisions can be found on AEM's Economic Stimulus Update Web site.
Below are a few highlights of the stimulus package:
- $27.5 billion for highways projects
- $8.4 billion for public transportation projects
- $9.3 billion for rail projects
- $6 billion for clean and drinking water projects
- $4.6 billion for the Army Corp of Engineers
- $8,000 tax credit for first time home buyers
- One-ear bonus depreciation extension
- Five-year Carryback of Net Operating Losses for companies with gross receipts of $15 million or less
- Three-year extension for renewable energy production tax credit
Of great concern to AEM members was the "Buy American Act," which was expanded in the Senate version of the bill to include manufactured goods. The final Buy American language and the Joint Explanatory Statement language from H.R.1, clarifies that the President still retains his authority under the Trade Agreements Act of 1979 to issue waivers to ensure that the United States complies with the WTO Government Procurement Agreement and other trade agreement obligations. It also provides that the new Buy American restrictions will not apply to least developed countries to the same extent that these restrictions do not apply to trade agreement partners (i.e., the least-developed country exception in current regulatory practice).
Additionally, a small change was made from the Senate language in the final provision. Specifically, subparagraph (b) now makes explicit that the Administration can use the waiver authority not just on a project basis, but also in any "category of cases."
The good news for equipment manufacturers is that this "Buy America" language is the original law that has been used in Federal Highway Administration projects and it never restricted any machinery from being used to build highways and bridges. As of now, we have not seen any language or explanation that would suggest restrictions were being added to the machinery products.
Now the focus will shift to the implementation of the legislation. Monies intended for transportation projects are expected to start reaching the states within a week. There will be intense press for projects to begin work as quickly as possible.
Visit the Association of Equipment Manufacturers (AEM).