Is the 'Buy American' provision a trade buster?


What could be the most controversial component of the roughly $787 billion fiscal stimulus package, as it relates to investors? The "Buy American" clause. Proponents and opponents offer starkly differently interpretations of the clause's impact.

Organized labor and other pro-union groups argue that the the clause is needed to guarantee that U.S. taxpayer dollars are deployed in such a way that they create the most domestic jobs as possible, thus creating a strong ripple effect on U.S. GDP. They argue that without it companies and others who receive federal dollars could use outsourced, overseas personnel to complete tasks, and U.S. GDP will not feel the full impact of stimulus dollars.