The fiscal 2024 defense authorization bill, which moves into conference negotiations this week, includes key provisions to ensure U.S military equipment is made in America.
In particular, the legislation includes provisions that would increase DoD domestic content requirements to 75% by 2029, exclude foreign content from naval ships and expand Defense Production Act investments to overseas locations.
Critics from the free-trade camp oppose these common-sense policies, disregarding Congress’s obligations to the taxpayer and the devastation that Wall Street-led outsourcing has wreaked on the nation’s manufacturing workers and dwindling middle class.
They also argue the United States has an obligation to support our allies through outbound overseas investment and procurement of foreign military equipment, lest they be unwilling to support mutual policy objectives.
Supporting American foreign policy, however, is clearly in the best interests of our NATO and major non-NATO allies, regardless of whether they have access to the U.S. defense budget. Also absent from free-trader objections are recognition of the dangers of domestic supply chain gaps, acknowledgment of the opportunity costs associated with foreign investment, recommendations for any conditions on U.S. foreign investment and, most importantly, acknowledgment of the U.S. taxpayer’s interest and the impact of outsourcing on domestic manufacturing.
The U.S. government is undertaking major industrial base investments through programs like the Defense Production Act and Innovation Capability and Modernization, both designed to close supply chain gaps through direct investment in manufacturing capability. These efforts have awarded more than $700 million in 2023 alone, largely filling voids in the U.S. industrial base.
Additionally, Congress is considering a DoD proposal to expand Defense Production Act investment authority to both the U.K. and Australia, an effort that failed in Congress last year. Absent from the conversation, however, are any proposed conditions on sending these funds overseas. Unaddressed, Congress could enact policy that outsources thousands of manufacturing jobs, further harming the U.S. working class.
Though it is unrealistic and impractical to mandate that every U.S. dollar must be spent at home, Congress should carefully consider its responsibility to enact industrial base policy that allows allies access to the U.S. defense budget only if certain conditions are met.
For example, allies receiving DoD industrial base funding for overseas manufacturing locations should be required to co-invest 75% or more in the project. Additionally, DoD-developed capabilities overseas should be subject to the Defense Priorities and Allocations System, meaning the U.S. would be guaranteed by the foreign partner that it would prioritize U.S. defense orders and be prohibited from filling its own country’s orders first. This is already a requirement for any U.S. company contracting with the Pentagon.
As Pentagon acquisition chief Bill LaPlante recently said, “co-development, co-production, and co-sustainment with our partners” is key to addressing challenges from Russia, China, and other threats to global security. But such agreements must be accompanied by proper safeguards, or else they risk harming American businesses and taxpayers.
Put simply, government funds should serve the taxpayers first, and they should provide tangible returns on investment. The U.S. needs a nuanced policy that is not pure domestic preference, but rather buy American when you can, from allies when you must, but never from adversaries.
In today’s increasingly unpredictable world, in which Covid-19 taught every American about the risk of weak supply chains, taxpayer dollars should not flow overseas without strong guarantees of return on that investment. Safeguards such as proportional co-investment requirements and agreements to buy American-made products should be the bare minimum for receiving access to the U.S. defense budget. To these ends, the Congress should support properly calibrated Buy American policies that balance supply security, national security needs, and U.S. taxpayer equities.
Jeff Green is president and founder of J.A. Green & Company, a bipartisan government relations firm based in Washington. Green previously was staff director of the House Armed Services readiness subcommittee.
