President Joe Biden pitched the Bipartisan Infrastructure Law to get America building again. But one of its provisions, known as Build America, Buy America (BABA), is sabotaging projects nationwide. Veterans in Idaho and elsewhere are seeing the costs firsthand.

Older Buy America requirements forced federal-aid-receiving states to use American iron, steel, and manufactured products when building infrastructure. BABA, however, added “construction materials” to that list, and expanded the term “infrastructure” to include, among other things, individual buildings. Those changes have hampered a Department of Veterans Affairs initiative for aged veterans.

The VA’s State Home Veterans Construction Grant Program helps states build special skilled-nursing homes with 24/7 care for veterans in need. The federal government pays about two-thirds of the cost (about $150 million a year); states pay the rest and run the facilities.

Idaho had long ago planned and gotten VA approval for three such homes, in Boise, Lewiston, and Pocatello. Recently, however, the federal government said that projects like Idaho’s would have to adhere to BABA, even if they were approved before the law went into effect. Though the department had previously issued waivers for two other facilities, VA secretary Denis McDonough in February told a concerned conference of veterans home officials that the department wouldn’t grant future project waivers, according to several attendees.

The problem for Idaho, and other states, is that the earlier VA grants didn’t include the higher costs that would result from BABA itself. Now states are struggling to find the extra funds—and building materials. States have found that some products, such as HVAC-system parts, electrical switch gear, and LED light fixtures simply aren’t available in America at any price.

Idaho’s veterans’ office spent almost $200,000 and 1,500 hours compiling a report of the BABA-induced cost increases and product shortfalls. They estimated that BABA would add about $13 million to the cost of the 122-bed Boise home, assuming the VA would approve waivers for unavailable products.

In March, the VA withdrew the grant from the Boise home because the “project is not BABA[] compliant.” But, as Mark Tschampl of the Idaho veterans office said, “We’ve proven that it’s not possible to be compliant.” BABA allows waivers when the act raises costs by 25 percent or when products are not available, but these possibilities didn’t persuade Secretary McDonough or the department. They were also unfazed that, according to Tschampl, Idaho has already spent almost $7 million on the project.

Veterans’ departments in other states, including those in Utah, California, and New York, are scrambling to comply. Like Idaho, they have seen a shortage of switchgear, lighting equipment, and other construction necessities. The federal government’s mandate to use American-made products cannot make those items appear.

Idaho’s Senator Jim Risch and Representative Russ Fulcher have each introduced bills bill, known as the WAIVER Act, to allow veterans’ homes projects approved before BABA to proceed. Fred Sganga, legislative director of the National Association of State Veterans Homes and executive director of the Long Island State Veterans Home in Stony Brook, New York, observes that the bill has had an “extremely difficult time securing additional co-sponsors” because some in Congress thought it could be portrayed as anti-American and hurt their reelection chances. As Tschampl says of the strict BABA rules, “They’re making our veterans pay the price of politics.”

The tragedy is that Buy America requirements usually don’t boost U.S. manufacturing. Instead, they result in projects that don’t get built at all or in delays that turn projects into a burden. BABA already created onerous new mandates, but the Biden administration is going beyond the letter of the law to enforce them. America’s veterans are paying the price.

Photo by John Paraskevas/Newsday RM via Getty Images


City Journal is a publication of the Manhattan Institute for Policy Research (MI), a leading free-market think tank. Are you interested in supporting the magazine? As a 501(c)(3) nonprofit, donations in support of MI and City Journal are fully tax-deductible as provided by law (EIN #13-2912529).

Further Reading

Up Next