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GOP, U.S. Chamber Of Commerce Beat Back Bill To Combat Outsourcing

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First Posted: 09/28/10 02:48 PM ET Updated: 05/25/11 06:50 PM ET

Senate Republicans beat back an effort by Democrats Tuesday to end tax breaks for companies who send jobs offshore only to import products back into the United States. The House has passed a series of similar legislation over the past several weeks, as Democrats work to portray Republicans as in the pocket of Big Business at the expense of workers, the economy, the trade deficit and the budget deficit. That message was muddied, however, by the defection of four Democrats and Independent Democrat Joe Lieberman, who voted against the motion to end a filibuster.

"I wish this election would be a simple referendum on this issue," Dick Durbin, the Senate's number two Democrat, said on the Senate floor Monday night. "Who in the world believes that we should be rewarding corporations in our country for shipping jobs overseas?"

The U.S. Chamber of Commerce is one powerful answer to Durbin's query. The Chamber, which represents businesses in the United States, has aggressively battled the effort to reduce outsourcing. During the debate over the stimulus, the U.S. Chamber fought efforts to include a provision that would encourage taxpayer money to be spent on products made by domestic companies. It opposed the outsourcing bill, arguing in a letter to the Senate that "the concept of economic growth is not a zero-sum game. Replacing a job that is based in another country with a domestic job does not stimulate economic growth or enhance the competitiveness of American worldwide companies."

In 2004, Chamber head Tom Donohue made the case that outsourcing shouldn't be a concern because only "two, maybe three million jobs, maybe four" would be lost. "American companies employ 140 million Americans," Donohue said in a CNN interview that Chamber opponents are happy to remind him of. "They provide health care for 160 million Americans. They provide training in terms of 40 billion a year. The outsourcing deal over three or four or five years and the two or three sets of numbers are only going to be, you know, maybe two, maybe three million jobs, maybe four."

The bill included a payroll tax holiday for companies that bring jobs back from overseas, ended tax breaks for plants that shut down to go elsewhere, and blocked companies from deferring their tax bill year to year by keeping money out of the U.S.

The U.S. Chamber, in a letter to the Senate, outlined its opposition to the measure and said that it may use the vote to rate how friendly to business a senator is in the lobby's annual scorecard. The bill, argued the Chamber, would "significantly curtail [tax] deferral [of earnings], reversing longstanding tax policy and subjecting American worldwide companies to immediate double taxation on the earnings of their foreign subsidiaries. Limiting deferral would hinder the global competitiveness of these American companies, impede U.S. economic growth, and ultimately result in the loss of jobs - both at the companies directly impacted and companies in their supply chains."

Sens. Ben Nelson (D-Neb.), Jon Tester (D-Mont.) and Mark Warner (D-Va.) broke with their party to vote to continue the filibuster, as did the chairman of the Senate Finance Committee, Max Baucus (D-Mont.).

Republicans argued that revoking the tax breaks would punish American companies and make them less competitive with foreign firms. But more broadly, they pressed the case that the vote was a political stunt since Democrats knew they didn't have 60 votes to cut off the filibuster. The best thing to do, said GOP senators, is to get out of town.

"I think that right now all concerns, the leader included, are to get this over with, get back home and campaign," said Sen. Jim Inhofe (R-Okla.).

"To be honest with you, because of the election, we're not going to get anything done. We're just wasting--they're wasting time. My hope is that after the election we can come back here and get serious about some issues that need to be dealt with," said Sen. George Voinovich (R-Ohio).

"They may be forcing it, but what we should be taking up right now are the tax cuts," argued Sen. George LeMieux (R-Fla.).

Sen. Bernie Sanders (I-Vt.) pushed back on the GOP argument that the vote was political theater. "Republicans call this a stunt. You go and you speak to the millions of American workers who have lost their jobs, because their plants have shut down and their companies have moved to China, and you ask them if they think focusing on outsourcing and demanding that American companies reinvest in American companies is a stunt. I don't think they believe it's a stunt," he said.

"We're hearing a lot of things thrown out to create a diversion," added Sen. Debbie Stabenow (D-Mich.). "The question is this: Do Republicans think that middle class families should pay through their tax subsidies for plants to close up and the cost of shipping jobs overseas to be on their back?"

House Democrats are making a similar attempt to draw a bright line on jobs between Republicans and Democrats. At Tuesday's "Conference on the Renaissance of American Manufacturing," House Majority Leader Steny Hoyer (D-Md.) laid out the agenda for the remaining floor time before the election. "[T]his week the House will vote on three additional bills," he said, according to his prepared remarks. "One will make sure that the government buys American-made American flags. Another helps ensure that American workers are given every opportunity to earn certifications, degrees, and qualifications for the jobs American industry needs to fill. And the third addresses China's unfair currency policy and its harms to American workers. By deliberately keeping the value of its currency low, China is able to sell its goods in the United States at an artificially low price--which helps put American manufacturers out of business. The bill we vote on this week will help level the playing field for American businesses and workers."

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