'Buy American' clause stirs up controversy

— -- A contentious debate over a "Buy American" provision in the economic stimulus package poses an early test for President Obama on both domestic politics and foreign policy.

The Senate this week is considering an $885 billion bill designed to help mend the ailing economy, which requires all "manufactured goods" purchased with stimulus money to be made in the United States. The House already has approved a narrower bill mandating the use of domestic iron and steel.

To supporters, including labor unions that helped the Democrats retake the White House last year, a "Buy American" requirement is just common sense at a time of economic crisis and rising unemployment. Factories have been hemorrhaging jobs for years; manufacturing employment is now 12.9 million, down from 17.2 million at the end of 2000. If Congress doesn't insist upon the use of U.S.-made materials, taxpayer funds could line the pockets of European or Chinese workers rather than hard-hit Americans.

"If we're gonna spend many billions of taxpayer dollars in an effort to get the economy up and moving again, it's obvious that money should be spent in our economy," said Jim Robinson, a United Steelworkers (USW) official in Gary, Ind.

Obama's view

In an interview Tuesday with Fox News, Obama cast doubt on the measure, saying, "We can't send a protectionist message."

The U.S. debate comes amid a blizzard of government bailouts and similar political pressures elsewhere. From Indonesia to Sweden, countries have carved out protected turf for favored industries even as Uncle Sam shovels money at wounded banks and automakers.