Will “buy American” become the defense spending debate of the 2008 election?

I recall that defense modernization played an important role in the 2000 election, and then-candidate George W. Bush’s pledge to skip a generation of weapons technology led to the “transformation” agenda of Rumsfeld’s Pentagon.

We all know how that worked out!

In 2008, defense modernization still hasn’t become a hot-button issue in the US election, despite the efforts of lobbying groups like the Aerospace Industries Association (AIA) and urgent pleas for more cash coming from the Pentagon.

But I’m starting to feel that the ’08 debate by the candidates on the defense budget might bypass completely the issue of spending levels for new weapons systems. The campaigns may focus instead on where the weapon systems are coming from (ecoute-moi, l’Airbus?).

A campaign theme that focuses on “Buy American” may become as significant to the US defense industry as any havoc caused by Rumsfeld’s transformation policies.

I’m attaching a press release issued by Senator Hillary Clinton last Saturday that outlines her plan to keep foreign outsourcing from disrupting the security of the US defense industrial base.

Let’s see if this campaign theme starts to snowball into a real election issue. A quotable excerpt is pasted below, but click on the link for the full press release.

“Because of the Bush administration’s failed policies, we’re not just outsourcing jobs, we’re outsourcing our security. This has got to stop. We cannot remain a strong, free and prosperous nation if we continue to outsource industries essential to our national defense,” said Clinton.

“This is not about ideology. This is not about economic theory. This is not about Democrat or Republican. It’s about common sense. ‘Made in America’ can’t be just a slogan. It must be a strategy.”

Here’s the entire text of the press release:

At a speech in Indianapolis today, Hillary Clinton outlined a plan to maintain a strong national security and keep good jobs in the U.S. Her plan will invest in a new generation of defense manufacturing jobs and research and development to maintain America’s competitiveness, innovative edge, and to provide our military and our soldiers with the equipment and technology they need.

Hillary’s plan is in response to the growing trend of defense manufacturing jobs leaving the U.S., and with them critical technology and know-how to keep our country safe. Hillary believes that America must maintain and strengthen its capacity to produce key defense technologies to have a strong economy and strong national security.

“Because of the Bush administration’s failed policies, we’re not just outsourcing jobs, we’re outsourcing our security. This has got to stop. We cannot remain a strong, free and prosperous nation if we continue to outsource industries essential to our national defense,” said Clinton.

“This is not about ideology. This is not about economic theory. This is not about Democrat or Republican. It’s about common sense. ‘Made in America’ can’t be just a slogan. It must be a strategy.”

Hillary delivered her remarks at Allison Transmission in Indianapolis, a local manufacturer of military vehicle components. At the event, she was joined by Senator Evan Bayh, who has been a leader on defense manufacturing issues and keeping these jobs in America.

Hillary’s plan includes five major parts – launching a comprehensive review of the defense industrial base in the first 100 days, a new critical capabilities impact analysis for federal contracts, a requirement to review foreign investment in critical national security industries and technologies, protecting “Buy America” provisions for metals that are vital to national security, and a new inter-agency task force to combat industrial espionage.

After the event in Indianapolis, Hillary will tour an AM General plant in Mishawaka. AM General produces buses, large trucks, and Jeeps for industrial, military, and government use. In the late 1970s, it developed the “Humvee” for military use as a heavy-duty replacement for the jeep. After the tour, Hillary is expected to have a conversation with some of the employees of the plant.

She will end her day at a town hall in Valparaiso to meet with the community and discuss the challenges of people who lost their jobs at the Magnaquench factory. Five years ago, Indiana lost more than 225 jobs when Chinese investors moved the operations of Magnaquench to China.

At the time, Magnaquench was the only producer in the United States of what are known as rare-earth “neo” magnets, critical components in the guidance systems of military smart bombs, which were not covered by the federal ‘Buy America’ specialty metals clause. As a result of the decision to shut down Magnaquench’s U.S. production, today the U.S. military buys “neo” magnets from China.

Hillary Clinton believes a strong defense industrial base is one of the foundations of the U.S. economy and is essential to ensuring our technological edge and safeguarding national security. Defense manufacturing also provides good, high-paying jobs for workers in Indiana and across the country. Below is a full outline of her plan:

1. Comprehensive Review of Defense Industrial Base Initiated Within the First 100 Days. It has been 15 years since the Defense Department last conducted a comprehensive, “bottom-up review” of the U.S. defense industrial base. Since then, technologies have changed, the industrial base in the United States has waned, and the world market for defense procurement has rapidly integrated, bringing new players, such as China, into the fold. As we look forward to creating new jobs in the United States and maintaining our edge in technology and innovation, we must conduct a bottom-up review, assessing everything from technical capabilities to engineers to systems integration to our supplier base. As President, Hillary will initiate the first major, comprehensive review of our defense industrial base in more than 15 years to determine where U.S. capabilities are lacking and what steps need to be taken. Hillary will use the recommendations from this review to guide:

* A doubling of basic and applied research at the Department of Defense. By identifying key areas of weakness in our defense industrial base, the recommendations of this comprehensive review will help guide Hillary’s commitment to double basic DoD research to help drive the defense innovations of the future.

* Expansion of graduate research fellowships in science and engineering. Hillary will direct new NSF research fellowships for students interested in pursuing research in cutting-edge defense technology and innovation.

* New advanced manufacturing research investments. Hillary will incorporate the results of this review in to the investment strategy of her new Manufacturing Advanced Research Projects Agency (MARPA). This agency will help propel defense manufacturing innovation by investing in higher risk research projects.

2. A New Critical Capabilities Impact Analysis for Federal Contracts. It is vitally important for the United States to maintain its capacity to produce domestically what we need to protect our national security interests. Our defense manufacturing industry not only provides vital jobs and economic benefits to communities across Indiana and the United States but ensures that we maintain the technology and know-how to keep our citizens safe. Under current procurement rules, the Department of Defense is not allowed to consider the impact on American jobs our national security technological capacity. As a result there is often little reliable independent information on the impact of these contracting decisions, which can affect entire communities and the security of our economy. As President, Senator Clinton would require that an independent, third-party to work with bidders on defense contracts to conduct an impact analysis on critical capabilities – including U.S. jobs – so that the Department of Defense, Congress and other interested parties have a full and complete picture of the impact of procurement decisions. This new analysis will help ensure that we maintain an independent, competitive procurement process that is in the best interest of our country and our workers.

3. New Public Periodic Review Requirement of Foreign Investments in Critical National Security Industries and Technologies. The Committee on Foreign Investment in the United States (CFIUS) plays an important role in ensuring that technologies and industries critical to U.S. national security are not sold off and outsourced to foreign governments. Senator Clinton has been an outspoken proponent of strengthening CFIUS and supported the 2007 legislation that was signed into law to increase oversight and transparency in the CFIUS process. However, despite these improvements, there is no mechanism currently in place to review CFIUS decisions once they are made. The story of Magnaquench highlights how important it can be to review foreign investments in key U.S. industries, to ensure that foreign investors and foreign governments are sticking to the terms of the agreements they made. That’s why today, Senator Clinton called for requiring new periodic public reviews of CFIUS decisions on mergers, acquisitions, and agreements. These reviews will ensure that approved mergers have not changed in a manner that would be harmful to our national security interests. She will require that all periodic reports are published in the Federal Register so they are accessible to the public.

4. Protecting “Buy America” Provisions for Metals that are Vital to Our National Security. The United States must ensure that it maintains a secure source for the metals that are used to build out aircraft, ships and weaponry. We cannot afford to have our national security hinge on whether we can secure key inputs from other countries like China, which have shown a clear willingness to break and bend trade rules. Last year, Senator Bayh led an effort in Congress to strengthen the “specialty metals clause” which requires that certain vital metals used in defense manufacturing must be produced here in the United States. This provision helps ensure we maintain our independence and security, and that we maintain good, high-paying defense manufacturing jobs in Indiana and across the country. However, the Bush Administration and John McCain have made clear that they want to eviscerate this key provision. As President, Hillary will work to protect and strengthen the specialty metal clause to help ensure a strong, independent defense manufacturing base in America.

5. A New Inter-Agency Task Force to Combat Industrial Espionage. Industrial espionage on the part of foreign governments and businesses is a serious problem for out our defense industrial base. In 2007, the U.S. China Economic and Security Commission reported that Chinese industrial espionage in the United States presents the single greatest threat to U.S. technology that exists today. The illicit acquisition of sophisticated U.S. technology and economic know-how allow China and other competitors to gain a valuable competitive edge without investing time or money in research. Furthermore, U.S. government efforts to combat industrial espionage are not yet calibrated to new, 21st century espionage threats to like hacking and cyber attacks.

Hillary will invest $75 million to create a new Inter-Agency Task Force on Industrial Espionage to bring together top experts from the FBI, Justice Department, Commerce Department, Immigration and Customs Enforcement, the Department of Defense to develop a comprehensive approach to combating known espionage threats and anticipating new ones. The Task-Force will be headed by a new Industrial Espionage Coordinator at the National Counterintelligence Executive. The Task-Force will reach out to businesses that particularly vulnerable to espionage activities to develop new strategies to protect sensitive technologies. It will strengthen the government’s capacity to investigate and prosecute cases of espionage and information theft. And it will devote new resources to counter cyber-espionage and secure sensitive online information.

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One Response to Will “buy American” become the defense spending debate of the 2008 election?

  1. Randall De Garis 17 April, 2008 at 3:07 pm #

    Question: Wasn’t it Hillary and co. who rented out White House bedrooms to senior Chinese officials and approved the transfer of significant technologies off-shore or have I got the wrong Clinton’s?

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