Lawmakers push offshore outsourcing legislation

The U.S. Senate voted to approve an amendment restricting federal tax dollars from being used on jobs going overseas, a day after a U.S. representative introduced a bill prohibiting federal grants and loans from going to some companies that send jobs out of the country.

The Senate, by a vote of 70 to 26, voted to approve Senator Chris Dodd's amendment, which would prohibit taxpayer dollars from being used to outsource or take offshore work formerly done in the U.S. The Connecticut Democrat's amendment, added on to a bill to restructure corporate taxes, would prohibit outsourcing in three areas of government contracting: privatizing of federal work, federal procurement of goods and services and state government procurement using federal funds.

"American workers are hurting," Dodd said in a statement. "Our nation's chief export shouldn't be jobs for foreign workers. Thankfully this measure says enough is enough. Taxpayers' hard-earned money shouldn't be used to bankroll the loss of taxpayers' jobs to overseas workers."

The Information Technology Association of America (ITAA), which has opposed limits on offshore outsourcing, criticized Dodd's amendment and a bill introduced by Representative Bernie Sanders, a Vermont independent. Sanders' bill, introduced Wednesday, would bar companies from receiving federal grants, loans and loan guarantees if they lay off a greater percentage of workers in the U.S. than they lay off in other countries.

It's unclear how many U.S. companies could potentially be affected by Sanders' bill, which had the support of 50 cosponsors when it was introduced. Sanders' office didn't return repeated phone calls.

The Sanders bill takes a "very mistaken" approach, said Bob Cohen, senior vice president of the ITAA. "We entirely disagree with its general direction and its specific language," Cohen said. "There's nothing about it we would agree with."

The ITAA and other opponents of restrictions on outsourcing argue that the U.S. economy benefits more from free trade than from attempts to save U.S. worker jobs through limits on outsourcing. The U.S. exports more IT-related products and services than it imports, the ITAA argues, and restrictions on offshore outsourcing could prompt a trade war in which nations cut back on U.S. tech imports.

The Dodd amendment could lead to other countries refusing to allow U.S. IT companies to do government work, the ITAA said. The amendment could also result in higher prices paid on some U.S. government contracts, with the option of sending work overseas eliminated, said ITAA President Harris Miller.

"The U.S. IT software and services industry has a multibillion dollar surplus with the rest of the world, in large part because governments around the world buy products from U.S. IT companies," Miller said in a statement. "That means we create more jobs selling to them than they create by selling to us. Trying to protect unclassified government business from overseas competition is a step that is sure to backfire, shrinking markets and harming workers."

Dodd said the U.S. needs to stop job loss. The U.S. has lost 2.7 million manufacturing jobs since 2001, he said.

Sanders, in a statement, also defended his legislation. "In my view, it is an insult to the middle class of this country, that American taxpayer dollars are being used to provide loans, loan guarantees, grants, tax breaks and subsidies to huge and profitable corporations who then say to the American people: 'Thanks for the welfare chumps. But we're closing your plant and taking your job to China ,'" he said.