You Bet It's Protectionist:  I'm Protecting My People

Your March 16 editorial "Outsourcing New Jersey" decries my bill in the New Jersey State Senate prohibiting the state from entering into service contracts that use foreign labor.  You fail to address the focus of this legislation — that sending tax dollars overseas to pay for state services is bad public policy.

It is the responsibility of those of us in government to ensure that every tax dollar we spend advances the best interests of our community.  When New Jersey, or any other government, enters into a contract that sends tax dollars overseas, it may seem like we are saving money in the short term, but that fails to look at the long-term costs of that decision.

By sending those dollars abroad, we lose all economic benefit they could bestow upon New Jersey or the U.S. No income or sales taxes will be received from these wages.  No goods or services will be purchased from local businesses from these wages.  No mortgages will be paid from these wages.

It is highly hypocritical to chastise individuals on welfare who do not have a job and then support efforts to send the jobs for which they are qualified to the other side of the world.  If the state has jobs that individuals on welfare can successfully perform, then those jobs should go to the welfare recipients before someone in Bangalore, so that those taxpayer dollars not only provide the service they pay for, but also reduced the overall dependence on social welfare programs.

You criticize this bill for being protectionist, and it is.  But I make no apologies for that, since my responsibility is to the people who elected me, who want to know that I am fighting to keep their jobs secure and their families safe.

You know, there are all kind of statistics out there, but I want to bring it down to an individual.

Mr. President, what do you say to someone in this country who has lost his job to someone overseas who's being paid a fraction of what that job paid here in the United States?

BUSH:  I'd say, Bob, I've got policies to continue to grow our economy and create the jobs of the 21st century.  And here's some help for you to go get an education.  Here's some help for you to go to a community college.

We've expanded trade adjustment assistance.  We want to help pay for you to gain the skills necessary to fill the jobs of the 21st century.

You know, there's a lot of talk about how to keep the economy growing.  We talk about fiscal matters.  But perhaps the best way to keep jobs here in America and to keep this economy growing is to make sure our education system works.

I went to Washington to solve problems.  And I saw a problem in the public education system in America.  They were just shuffling too many kids through the system, year after year, grade after grade, without learning the basics.

And so we said:  Let's raise the standards.  We're spending more money, but let's raise the standards and measure early and solve problems now, before it's too late.

No, education is how to help the person who's lost a job.  Education is how to make sure we've got a workforce that's productive and competitive.

Got four more years, I've got more to do to continue to raise standards, to continue to reward teachers and school districts that are working, to emphasize math and science in the classrooms, to continue to expand Pell Grants to make sure that people have an opportunity to start their career with a college diploma.

And so the person you talked to, I say, here's some help, here's some trade adjustment assistance money for you to go a community college in your neighborhood, a community college which is providing the skills necessary to fill the jobs of the 21st century.  And that's what I would say to that person.

I'm asking for your vote.

So far, the Bush administration's chief response to the wave of outsourcing is to spend more money on vocational training, including $4 billion earmarked through the Workforce Investment Act.

President Bush told a conference on job training in Arkansas last month that there are plenty of jobs available for displaced workers.  "It's just some people are used to working in different kinds of fields," he said.

But critics say the jobs Bush wants to train workers for — computer, technical and math-related positions — are those most susceptible to being exported to foreign markets.

"This White House is clearly out of touch with America's work force," said Dawn Teo, public outreach director of Rescue American Jobs, a labor-backed organization that wants to slow outsourcing.  "They're retraining workers who have held high-wage jobs to take low-wage jobs.  And some of the workers are being trained to take jobs that may not even exist."

Ironically, some of the people who are being told they need to be retrained to compete with workers overseas are the people who trained the foreign workers how to do the jobs in the first place.

New York, Congressman Joseph Crowley, the Democratic chair of the Congressional Caucus on India and Indian Americans, has hailed the founding of the Senate India Caucus as a "major milestone."

He congratulated Senator John Cornyn, Republican from Texas, and Senator Hillary Clinton, Democrat from New York, on the founding of the Senate India Caucus.

"I am pleased to join Senators Cornyn and Clinton at this major milestone and applaud them for their initiative and friendship," said Crowley.

"The formation of the Senate India Caucus is a welcome addition to this Congress.  It is now more than ever essential that this wonderfully diverse and culturally rich nation have a strong voice in both houses of Congress, as their voice all over the country and world is getting louder.

N. Gregory Mankiw, the besieged chairman of President Bush's Council of Economic Advisers, has learned the hard way that there's a huge difference between ivory tower discussions at Harvard and political combat in Washington.  After setting off a firestorm by remarking that sending America's high-tech service jobs abroad is "probably a plus" for the U.S. economy long-term, he has been working on his mea culpas.  On Feb. 17, Mankiw said his analysis, which has been widely seen as economically sound, was "injudiciously worded."

But Mankiw's message malfunction was more than impolitic.  It added fuel to the fiery debate over outsourcing, put the President on the defensive on the perilous subject of job losses, and helped boost Democratic Senator John Edwards (N.C.) to a strong second-place finish in the Wisconsin Democratic Presidential primary.

For Democratic sharks, there is blood in the water.  In Mankiw's gaffe, they see an opportunity to appeal to voters beyond blue-collar manufacturing workers by tapping into white-collar anxiety over the loss of jobs to high-skill, low-wage nations like India and China.  And they may have an opening:  A December Zogby Poll found that 25% of Americans earning at least $75,000 worry about pink slips — more than any other income group.

Edwards is effectively exploiting those fears.  "I'll tell you what we should do," he declared in Appleton, Wis., on the day before the Feb.  17 primary.  "We should outsource this Administration."

"We are in very desperate times," says House Small Business Committee Chairman Donald A. Manzullo, whose hometown of Rockford, Ill., is suffering from 11% unemployment.  Manzullo, who prides himself on his pro-trade votes, now wants stronger "Buy American" rules in federal contracts as well as Mankiw's dismissal.

In Congress, the first effect of the growing controversy over outsourcing could be the death of a House GOP effort to cut up to $60 billion from the taxes of U.S. multinationals, many of whom have moved operations offshore.  The Senate prefers tax relief for manufacturers who keep jobs at home.

Responding to the Bush Administration's view that sending jobs overseas will benefit the U.S.  economy, Connecticut Democratic Senator Chris Dodd has announced the introduction of new legislation to ensure that hard-earned American tax dollars remain invested in America's workers.

"Workers in Connecticut and across the nation are first-rate.  It is simply doesn't make sense to export their jobs and futures halfway around the world to save a few pennies," said Sen. Dodd in his announcement February 17.

Sen. Dodd's United States Workers Protection Act would prohibit taxpayer dollars from being used to outsource or take offshore work that is being done in the United States.

The proposed blockade focuses on three areas of government contracting — privatizing of federal work, federal procurement of goods and services, and state government procurement using federal funds.  Under this bill, state governments would not be eligible to receive federal funds unless they certify each year that such monies would not go offshore.

Washington:  President Bush and his administration have reiterated their commitment to free trade, including explicitly backing the idea of outsourcing to countries such as India.

Specifically referring to India as an example of an outsourcing destination, the Bush report says "when a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically."

Elaborating on the administration's stand, a Senior White House official later described outsourcing as the "latest manifestation of the forces of free trade and increasing international specialisation in production."

"An open world trading system is generally a positive contribution to economic prosperity.  It increases living standards both at home and abroad," explained Bush's Economic Advisor Greg Mankiw, adding, "That is the reason the President has actively pursued trade agreements to open up markets abroad."

[Sen. Shirley] Turner, [D-Lawrence,] and Assemblyman Reed Gusciora, D-Princeton, have introduced the bill in the new Legislature. They aren't saying that government should — or even could — interfere with strictly private decisions to ship U.S. jobs overseas, but they insist that government agencies shouldn't be a party to it.

Democratic state Sens. Deanna Hanna of Lakewood and Terry Phillips of Louisville said too many companies are moving jobs out of state or overseas, hurting the state economy.

Hanna said she was shocked when workers for EDS, a Texas-based company that has a contract for computers for the state human services programs, recently told lawmakers it was sending technical support jobs to workers in India and Pakistan.

Hanna said her measure (Senate Bill 170) would require companies to keep workers assigned to state contracts in the United States.

"I know profits are important to companies, but we in Colorado need to do all we can to make sure people have jobs," Hanna said.

Phillips said IBM recently announced it was moving 900 jobs out of Louisville.  His measure (Senate Bill 169) would bar companies that relocate 100 jobs or more outside the United States from doing business with the state for seven years.

"The way I see it, America has got to put its foot down and protect its own citizens," Swenson said.  "We're losing high-wage jobs to foreign competitors."

(Rep.  Dale Swenson, R-Wichita, plans to introduce a bill this session that would prevent state contractors from having service work performed outside the country.)

A Missouri state senator has sponsored legislation to ensure that government contractors do not ship tech call centre jobs to India or other countries but employ only locals for the purpose.

Republican Senator Chuck Gross' legislation takes strong objection to foreign workers collecting personal information about Missourians and requires such contractors to complete work for the state within the United States.  The provision would also apply to subcontractors.

Hyderabad [India]:  Terming as "temporary hardship" the hue and cry over Business Process Outsourcing (BPO), US Senator John Cornyn and Congressman Joseph Crowley on Thursday said the Indo-US efforts should be focussed on free trade and encouraging global economy.

"There has to be a give and take approach...  Outsourcing has added to the competitive edge by uplifting standards in India and made US companies efficient and competitive," Crowley, co-chair of Congressional Caucus on India and Indian Americans, said while addressing the CII Partnership Summit here.

Mr. Joseph Crawley, co-chair of the Congressional Caucus on India and Indian Americans, said Indian companies must focus on the creation of more jobs for American professionals in the US.  "Outsourcing is certainly an issue that all of us are grappling with in the US," Mr. Crawley told a business meeting jointly organized by the Confederation of Indian Industry and the National Association of Software and Service Companies here.

"I would not support any bill that would restrict the shipping of jobs overseas. It is a two-way street and both India and the US stand to gain in the long-term through this process," said Mr. Crawley.

Question: Thank you, Mr. President.  Staying with that theme, although there are some signs of improvement in the economy, there are sectors in the work force who feel like they're being left behind.  They're concerned about jobs going overseas, that technology is taking over jobs.  And these people are finding difficulty finding work.  And although you're recommitted yourself to your tax cut policy, do you have any ideas or any plans within the administration of what you might do for these people who feel like there are fundamental changes happening in the work force and in the economy?

President Bush: Sure.  Listen, I fully understand what you're saying.  In other words, as technology races through the economy, a lot of times worker skills don't keep up with technological change.  And that's a significant issue that we've got to address in the country.

I think my idea of reemployment accounts makes a lot of sense.  In essence, it says that you get $3,000 from the federal government to help you with training, day care, transportation, perhaps moving to another city.  And if, within a period of time, you're able to find a job, you keep the balance as a reemployment bonus.