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Biden's Buy American push is good politics but bad economics – CNN

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And he took a small step toward ensuring Washington can upgrade less of it.
That step backward came with Biden’s move last week to stiffen requirements that federal government purchases be limited to products made in the United States — even if they’re more expensive. Thus he followed the grooves set by both Democratic and Republican predecessors, who have consistently embraced crowd-pleasing “buy American” stances that make economists groan.
“Counter-productive,” cautioned Melissa Kearney, a University of Maryland professor who favors much of Biden’s economic agenda. “It really makes some of the administration’s other goals harder to achieve.”
Biden acted to strengthen the nearly-a-century-old Buy American Act, whose provenance alone hints at shaky economic foundations. It was signed into law by former President Herbert Hoover, who had earlier signed the Smoot-Hawley protective tariffs at the dawn of the Great Depression.
That association has not diminished its political appeal as America’s economy over the decades has become steadily more integrated with the rest of the world. Former President Ronald Reagan signed a companion law as America lost industrial jobs in the 1980s.
Former President Barack Obama incorporated Buy American provisions into his 2009 stimulus plan in response to the Great Recession. And Buy American provided a natural component for former President Donald Trump’s pledge to “Make America Great Again.”
Trump signed a series of executive orders advancing the theme. But as with steps taken by earlier presidents, they allowed ample room for such exemptions as complying with international trade agreements and permitting purchase of some foreign-made goods when suitable domestic alternatives were unavailable.
Now Biden — who has placed revival of American manufacturing at the center of his economic agenda — has moved to limit that wiggle room. Proposed rules he announced last week would boost the minimum value of American-made components in products purchased with taxpayer dollars to 60% from 55% immediately, and to 75% over time.
In the name of national security, the administration would enlarge price preferences for some American-made “critical products and components.” It would simultaneously strengthen reporting requirements for federal suppliers to demonstrate the domestic content of their products.
“It’s not lip service,” said William Reinsch, a former Commerce Department official under President Bill Clinton now at the Center for Strategic and International Studies in Washington. “It’s a genuine effort to change the rules.”
By demonstrating America’s reliance on China and other foreign sources for medical supplies, the coronavirus pandemic has fueled the effort. Even economists who celebrate free-market forces acknowledge that Buy America policies make sense in limited circumstances to protect vital national interests.
“It’s a question of scope,” said Kyle Pomerleau of the conservative American Enterprise Institute. He worries that Biden’s policy — which has not yet specified what it considers “critical components and products” — will be too broad.
Heather Boushey, a member of the White House Council of Economic Advisers, defended Buy American by noting “mission critical” objectives it can advance. One example: stocking the federal government’s fleet with domestic-made electric vehicles can accelerate a sector crucial for competing economically and fighting climate change.
“I do not think it’s bad economics,” Boushey said. “Everything in balance.”

‘It’s like being for puppies’

No one doubts that it’s good politics. As Biden seeks to recapture the allegiance of some Trump-friendly blue-collar workers, Buy American policies fare “extremely well” among voters, observed Democratic pollster Mark Mellman.
“It’s like being for puppies,” cracked Republican counterpart Glen Bolger. In fact, Bolger added, the idea that Washington can boost the domestic economy through federal purchasing power strikes plenty of Americans as too good to be true.
They have some basis for skepticism. In 2018, the Government Accountability Office found that foreign-made products exempt from the Buy American Act made up just 4% of federal government purchases the previous year.
That makes the sphere of economic activity affected by Biden’s initiative fairly small even if it achieves its intended goals.
“You’re talking about $300 billion of goods in a $22 trillion economy,” Reinsch concluded. “The question is whether it’s going to change very much.”
To that extent, the added costs Buy American initiatives impose threaten less economic havoc than protectionism in other forms, such as import tariffs. Jason Furman, who chaired Obama’s Council of Economic Advisers, considers relative harmlessness an argument in their favor.
“The ratio of good politics to bad economics,” Furman said, “might make it fully justified.”

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New Brunswick election profile: Progressive Conservative Leader Blaine Higgs

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FREDERICTON – A look at Blaine Higgs, leader of the Progressive Conservative Party of New Brunswick.

Born: March 1, 1954.

Early years: The son of a customs officer, he grew up in Forest City, N.B., near the Canada-U.S. border.

Education: Graduated from the University of New Brunswick with a degree in mechanical engineering in 1977.

Family: Married his high-school sweetheart, Marcia, and settled in Saint John, N.B., where they had four daughters: Lindsey, Laura, Sarah and Rachel.

Before politics: Hired by Irving Oil a week after he graduated from university and was eventually promoted to director of distribution. Worked for 33 years at the company.

Politics: Elected to the legislature in 2010 and later served as finance minister under former Progressive Conservative Premier David Alward. Elected Tory leader in 2016 and has been premier since 2018.

Quote: “I’ve always felt parents should play the main role in raising children. No one is denying gender diversity is real. But we need to figure out how to manage it.” — Blaine Higgs in a year-end interview in 2023, explaining changes to school policies about gender identity.

This report by The Canadian Press was first published Sept. 19, 2024.

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Anita Anand taking on transport portfolio after Pablo Rodriguez leaves cabinet

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GATINEAU, Que. – Treasury Board President Anita Anand will take on the additional role of transport minister this afternoon, after Pablo Rodriguez resigned from cabinet to run for the Quebec Liberal leadership.

A government source who was not authorized to speak publicly says Anand will be sworn in at a small ceremony at Rideau Hall.

Public Services and Procurement Minister Jean-Yves Duclos will become the government’s new Quebec lieutenant, but he is not expected to be at the ceremony because that is not an official role in cabinet.

Rodriguez announced this morning that he’s leaving cabinet and the federal Liberal caucus and will sit as an Independent member of Parliament until January.

That’s when the Quebec Liberal leadership race is set to officially begin.

Rodriguez says sitting as an Independent will allow him to focus on his own vision, but he plans to vote with the Liberals on a non-confidence motion next week.

This report by The Canadian Press was first published Sept. 19, 2024.

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New Brunswick Premier Blaine Higgs kicks off provincial election campaign

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FREDERICTON – New Brunswick Premier Blaine Higgs has called an election for Oct. 21, signalling the beginning of a 33-day campaign expected to focus on pocketbook issues and the government’s provocative approach to gender identity policies.

The 70-year-old Progressive Conservative leader, who is seeking a third term in office, has attracted national attention by requiring teachers to get parental consent before they can use the preferred names and pronouns of young students.

More recently, however, the former Irving Oil executive has tried to win over inflation-weary voters by promising to lower the provincial harmonized sales tax by two percentage points to 13 per cent if re-elected.

At dissolution, the Conservatives held 25 seats in the 49-seat legislature. The Liberals held 16 seats, the Greens had three and there was one Independent and four vacancies.

J.P. Lewis, a political science professor at the University of New Brunswick, said the top three issues facing New Brunswickers are affordability, health care and education.

“Across many jurisdictions, affordability is the top concern — cost of living, housing prices, things like that,” he said.

Richard Saillant, an economist and former vice-president of Université de Moncton, said the Tories’ pledge to lower the HST represents a costly promise.

“I don’t think there’s that much room for that,” he said. “I’m not entirely clear that they can do so without producing a greater deficit.” Saillant also pointed to mounting pressures to invest more in health care, education and housing, all of which are facing increasing demands from a growing population.

Higgs’s main rivals are Liberal Leader Susan Holt and Green Party Leader David Coon. Both are focusing on economic and social issues.

Holt has promised to impose a rent cap and roll out a subsidized school food program. The Liberals also want to open at least 30 community health clinics over the next four years.

Coon has said a Green government would create an “electricity support program,” which would give families earning less than $70,000 annually about $25 per month to offset “unprecedented” rate increases.

Higgs first came to power in 2018, when the Tories formed the province’s first minority government in 100 years. In 2020, he called a snap election — the first province to go to the polls after the start of the COVID-19 pandemic — and won a majority.

Since then, several well-known cabinet ministers and caucus members have stepped down after clashing with Higgs, some of them citing what they described as an authoritarian leadership style and a focus on policies that represent a hard shift to the right side of the political spectrum.

Lewis said the Progressive Conservatives are in the “midst of reinvention.”

“It appears he’s shaping the party now, really in the mould of his world views,” Lewis said. “Even though (Progressive Conservatives) have been down in the polls, I still think that they’re very competitive.”

Meanwhile, the legislature remained divided along linguistic lines. The Tories dominate in English-speaking ridings in central and southern parts of the province, while the Liberals held most French-speaking ridings in the north.

The drama within the party began in October 2022 when the province’s outspoken education minister, Dominic Cardy, resigned from cabinet, saying he could no longer tolerate the premier’s leadership style. In his resignation letter, Cardy cited controversial plans to reform French-language education. The government eventually stepped back those plans.

A series of resignations followed last year when the Higgs government announced changes to Policy 713, which now requires students under 16 who are exploring their gender identity to get their parents’ consent before teachers can use their preferred first names or pronouns — a reversal of the previous practice.

When several Tory lawmakers voted with the opposition to call for an external review of the change, Higgs dropped dissenters from his cabinet. And a bid by some party members to trigger a leadership review went nowhere.

This report by The Canadian Press was first published Sept. 19, 2024.

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