Congress looks for ways to slow offshore hiring

WASHINGTON - The U.S. government should stop buying foreign products and the U.S. Congress should enact other policies encouraging U.S. IT and other companies to stop sending jobs offshore, the chairman of the House Small Business Committee said Monday.

Congress should pass a corporate tax reduction to keep manufacturing jobs in the U.S., and the Bush Administration should encourage countries like China and Japan to stop manipulating their currencies to keep them low against the U.S. dollar, committee chairman Don Manzullo, an Illinois Republican said during a hearing on the "offshoring" of high-skill jobs Monday.

Manzullo criticized U.S. Department of Defense purchases of foreign-made clothing and weapons systems, rather than technology. But if the U.S. government cannot buy American, U.S. companies won't see much incentive to be loyal to U.S. workers, he said. "If the American people see how the U.S. government is using their taxpayers' dollars to destroy jobs here at home, what type of example does that set?" Manzullo asked.

Manzullo called on Congress to strengthen "Buy American" laws, requiring the Defense Department and other agencies to buy U.S. products.

Manzullo produced a report which he said showed more than 60,000 U.S. jobs lost through "offshoring" in the last month, including thousands of jobs moved by Intel, Oracle, Electronic Data Systems, Sprint and Microsoft.

"Thousands and thousands and thousands of white-collar jobs are going overseas, chasing the cheap dollar in India, China, Malaysia and the Philippines," Manzullo said. "That's the reason for this hearing, because of the incontrovertible evidence that the United States is on the verge of adopting the economies of Third World nations."

While part of the hearing focused on manufacturing and U.S. government procurement, much of the debate centered on moving IT jobs offshore. Harris Miller, president of the Information Technology Association of America, said even in the most dire predictions of jobs lost through "offshoring," only about 500,000 U.S. IT jobs would move offshore by 2015, representing about 5 percent of the U.S. IT workforce. The issue of offshoring IT jobs has been over-hyped in the media and Congress, Miller said.

The U.S. needs to worry about competition from IT sectors in India and other countries, Miller added, but he expects IT spending in the U.S. to increase in 2003 after two years of decline. If the U.S. adopts trade policies that discourage companies from hiring IT workers in other countries, those countries may decide to stop buying U.S. IT products, Miller said. The U.S. IT industry enjoys a $7.9 billion trade surplus with other nations, but that could change if Congress tries to restrict offshore hiring and outsourcing, he said, and some large U.S. IT vendors receive more than 40 percent of their profits from overseas sales.

Any trend toward offshoring touches many other topics, including trade policy and tax law, Miller said. He called on Congress to conduct a "thoughtful examination" of the issue before passing "knee-jerk" legislation.