Anti-outsourcing bill blocked in US senate

[Lankan Ranger]

Anti-outsourcing bill blocked in US senate

Senate Republicans successfully blocked the passage of an anti-offshoring bill that would have denied tax breaks to US companies which move jobs overseas.

Republicans in a 53-45 vote prevented the bill from overcoming a filibuster. At least 60 votes were needed to overcome the Opposition's obstruction.

As per the bill, there will be a ban on government contractors from using American taxpayers' money to move jobs offshore.

What is seen as an electoral populist move, the Creating American Jobs and End Offshoring Act aims at small manufacturers and included a payroll tax exemption for firms that move jobs to US, but the bill also contains provisions to prevent businesses from deferring US taxes on the income they make from foreign subsidiaries.

Indian IT honchos had said the bill won't make much of an impact on India. However, they warned that US companies operating in other countries may be beaten by the same stick.

Several business groups such as the National Association of Manufacturers (NAM) were strongly opposed to the legislation. It had sent a letter to senators arguing the measure would make US corporations less competitive and hurt job creation.

Terming the bill as an election gimmick, Republican senator Orrin Hatch slammed the Democrats for their "height of irresponsibility" that would put the US economy at "greater risk."

"Desperate times call for desperate measures and the majority is showing how desperate they are with a bill that increases the tax burden on job creators and ship much-needed US jobs overseas."

Hatch feared that "raising taxes on companies' overseas profits will just incentivize them to move their domestic facilities to another country... That is not the prescription that will cure our ailing economy."

Anti-outsourcing bill blocked in US senate - The Times of India

 

[Ganguly]

For better interest of India, we should support Republicans.

 

[fallstuff]

Republican making sure they are dragging USA down all the way to the next scene of the crash.

 

[RobbieS]

HAHAHAHA...so much for anti-outsourcing. Take that, you protectionists...!

 

[NWO]

I thought it would be vice-versa -- Republicans trying to pass it and Democrats trying to stop it. Now, I really do believe that the GOP, (Republican Party), is the party of no.

 

[bandit]

Republican making sure they are dragging USA down all the way to the next scene of the crash.

Any solid economic reasoning behind that? Cause what I studied about Economics says Exactly opposite.

If the American companies stop outsourcing, they have to get the same work done at 5x the cost. That increases the price of their final product. Since nobody buys pricier stuff just because it is made by Americans, people buy Chinese or Indian or whatever comes cheaper; they have what is called Comparative Advantage. The profit all goes to outsiders, not American companies. Thats when the real crash occurs. Unless it makes economic sense for people to buy american goods or services, outsourcing will occur.

A better way out is continous development of technology so that it can maintain its comparative advantage, not protectionist tariffs.

 

[fallstuff]

Any solid economic reasoning behind that? Cause what I studied about Economics says Exactly opposite.

If the American companies stop outsourcing, they have to get the same work done at 5x the cost. That increases the price of their final product. Since nobody buys pricier stuff just because it is made by Americans, people buy Chinese or Indian or whatever comes cheaper; they have what is called Comparative Advantage. The profit all goes to outsiders, not American companies. Thats when the real crash occurs. Unless it makes economic sense for people to buy american goods or services, outsourcing will occur.

A better way out is continous development of technology so that it can maintain its comparative advantage, not protectionist tariffs.

The economics you are describing is part of the picture, not all of it. The employee that gets paid about $75,000 years pays mortgage, taxes, car payment; the multiplier effect.

It costs about $70,000/year for a family of four in South Florida for just a decent living.

More than like the US Govt. is going to agree to pay standard US wages/salaries for those contracts. These companies will bill for that but than they may just simply outsource it and not pass the savings to the tax payers.

 

[bandit]

The economics you are describing is part of the picture, not all of it. The employee that gets paid about $75,000 years pays mortgage, taxes, car payment; the multiplier effect.

.

Still doesn't solve the problem of people not buying same goods and services at 5x the rate, does it?

And outsourcing profit comes back to the US in form of shareholder wealth and Corporation taxes, only the jobs don't.

It costs about $70,000/year for a family of four in South Florida for just a decent living.

More than like the US Govt. is going to agree to pay standard US wages/salaries for those contracts. These companies will bill for that but than they may just simply outsource it and not pass the savings to the tax payers

No way round it, welcome to Capitalism and Free Trade. Government cannot dictate business, it has to be the Invisible Hand.

Edit:
You could read Ganguly's post below for a detailed view.

 

[Ganguly]

How Does Outsourcing Affect the U.S. Economy?

How outsourcing affects the US economy is a matter of great debate. For those to the political right, this practice will have an overall positive effect on the US economy, since it saves money for companies, opens up opportunities for greater entrepreneurship in the US, and leads to more Americans holding higher level jobs. Critics suggest hiring foreign workers has an immediate effect on the US economy by stripping many Americans of jobs they would have performed, particularly by semi-skilled or skilled laborers. The way that companies are taxed based on outsourcing may decrease a corporation’s tax debt and thus decrease federal spending.

Both sides on this issue and all those who try to navigate a middle road between the two sides, have some valid points. It is true that outsourcing has led to job loss in the US, and has had a detrimental effect on those people who may be only minimally qualified to work. It’s also the case that there are plenty of skilled labor jobs being outsourced to foreign countries. The loss is not only to people with minimal job skills.

A problem for those Americans who are impoverished, and might take minimal skill jobs is that it is now much harder to get jobs of this type. When President Clinton enacted the Welfare to Work plan in the 1990s, he was attempting to encourage people to get back to work so as to reduce government spending in welfare. Unfortunately, with fewer jobs available for unskilled workers, people may find themselves in exceptional poverty. Poverty does not benefit the US economy since it reduces consumer spending and tax revenues.

Even in the middle classes, there are plenty of jobs that are now outsourced. This has been particularly the case in the computer and technology industry. Again, inability to find work means inability to purchase homes, spend money, and profit companies. When people don’t buy, corporations that produce things don’t make money, which can thus “trickle down” to fewer jobs available and a greater desire to outsource to make things more cheaply so they will be more attractive to consumers.

Those supporting outsourcing say that lowering expenses of corporations will create jobs. There are plenty of government agencies that outsource some of their work, saving them millions of dollars, a direct effect on the US economy and on federal spending. A common theory contends that being able to pay people lower wages for work means that companies will be able to produce things with less expense and transfer this saving to consumers. Lower prices may mean more consumer spending, and companies will be able to hire more workers in the US because they’re paying less for workers outside of it.

Further, many argue that giving jobs to workers in less developed countries improves those countries economically and increases trade for US products. It also increases a country’s ability to pay back debts to the US, and may promote better political relationships. Companies economically benefit by selling their products in other countries. This means they can hire more people in the US, lower their prices on products for US consumers.

There is another “side” to the issue of outsourcing that needs to be addressed. Not all people in other countries economically benefit from outsourced jobs, and some companies aren’t dedicated to providing humane working conditions. Outsourced work may be performed by children, or in inhumane working conditions. Abuses of foreign employees might not benefit US trade or political relationships.

Outsourcing remains a difficult issue, but it does remain. Virtually no one, on any side of the argument concedes that outsourcing can be eliminated completely. There are those who feel that corporations are evading taxes and depriving the government of needed money and suggest corporations should be taxed for outsourcing, and rewarded for keeping jobs within the US. Others feel the temporary loss of jobs will be followed by greater economic growth in the US and will ultimately be worth the cost

 

[su-47]

The economics you are describing is part of the picture, not all of it. The employee that gets paid about $75,000 years pays mortgage, taxes, car payment; the multiplier effect.

It costs about $70,000/year for a family of four in South Florida for just a decent living.

More than like the US Govt. is going to agree to pay standard US wages/salaries for those contracts. These companies will bill for that but than they may just simply outsource it and not pass the savings to the tax payers.

I had discussed this before in some other thread, but I will repeat my point.

Lets take a large US multinational. It might employ about 100 000 people. Due to economic pressure from global competitors, the company might find that it can't compete since its cost base is too high.

Now lets consider the options:

A) It can retain those jobs and continue its operations.I

OR​

B) t can cut 20 000 jobs and outsource it to lower cost

Now the thing is, if they choose option A, they can employ 100 000 people for a few years, but incurring losses, and soon the company might go out of business, and these 100 000 will be out of employment

By choosing option B the company can remain competitive and the 80 000 jobs they have in USA won't be lost.

The multiplier effect you talked of would come crashing down if 100 000 people lose their jobs. Outsourcing can minimise that loss and increase chances that a majority of those 100 000 can retain their jobs.

 

[InPhilTraitor]

How Does Outsourcing Affect the U.S. Economy?

How outsourcing affects the US economy is a matter of great debate. For those to the political right, this practice will have an overall positive effect on the US economy, since it saves money for companies, opens up opportunities for greater entrepreneurship in the US, and leads to more Americans holding higher level jobs. Critics suggest hiring foreign workers has an immediate effect on the US economy by stripping many Americans of jobs they would have performed, particularly by semi-skilled or skilled laborers. The way that companies are taxed based on outsourcing may decrease a corporation’s tax debt and thus decrease federal spending.

Both sides on this issue and all those who try to navigate a middle road between the two sides, have some valid points. It is true that outsourcing has led to job loss in the US, and has had a detrimental effect on those people who may be only minimally qualified to work. It’s also the case that there are plenty of skilled labor jobs being outsourced to foreign countries. The loss is not only to people with minimal job skills.

A problem for those Americans who are impoverished, and might take minimal skill jobs is that it is now much harder to get jobs of this type. When President Clinton enacted the Welfare to Work plan in the 1990s, he was attempting to encourage people to get back to work so as to reduce government spending in welfare. Unfortunately, with fewer jobs available for unskilled workers, people may find themselves in exceptional poverty. Poverty does not benefit the US economy since it reduces consumer spending and tax revenues.

Even in the middle classes, there are plenty of jobs that are now outsourced. This has been particularly the case in the computer and technology industry. Again, inability to find work means inability to purchase homes, spend money, and profit companies. When people don’t buy, corporations that produce things don’t make money, which can thus “trickle down” to fewer jobs available and a greater desire to outsource to make things more cheaply so they will be more attractive to consumers.

Those supporting outsourcing say that lowering expenses of corporations will create jobs. There are plenty of government agencies that outsource some of their work, saving them millions of dollars, a direct effect on the US economy and on federal spending. A common theory contends that being able to pay people lower wages for work means that companies will be able to produce things with less expense and transfer this saving to consumers. Lower prices may mean more consumer spending, and companies will be able to hire more workers in the US because they’re paying less for workers outside of it.

Further, many argue that giving jobs to workers in less developed countries improves those countries economically and increases trade for US products. It also increases a country’s ability to pay back debts to the US, and may promote better political relationships. Companies economically benefit by selling their products in other countries. This means they can hire more people in the US, lower their prices on products for US consumers.

There is another “side” to the issue of outsourcing that needs to be addressed. Not all people in other countries economically benefit from outsourced jobs, and some companies aren’t dedicated to providing humane working conditions. Outsourced work may be performed by children, or in inhumane working conditions. Abuses of foreign employees might not benefit US trade or political relationships.

Outsourcing remains a difficult issue, but it does remain. Virtually no one, on any side of the argument concedes that outsourcing can be eliminated completely. There are those who feel that corporations are evading taxes and depriving the government of needed money and suggest corporations should be taxed for outsourcing, and rewarded for keeping jobs within the US. Others feel the temporary loss of jobs will be followed by greater economic growth in the US and will ultimately be worth the cost

Ah!!! If only things were as "hunky - dory" as you explain. The Indian government subsidizes exporters both of goods and service sector at the cost of Indian consumer, with the GREAT DIRTY FLOAT. The Chinese are even worse with their PEG.

So what is free market? Is India a free market economy? The simple answer is NO. Why does it take so many years for Walmart or Tesco to enter India? Yeah, it is Indian protecting those mom&pop shops, right? those small farmers and their brokers.. etc. Why not millions of Indians will profit from better quality goods esp. from unadulterated food items. Farm to Market situation may actually improve in the short term. Better distribution of commodities in general.. so why not India do this.

Why India subsidizes Infy, Wipro and TCS with dirty float? If it can really help the Indian consumer with less Petrol prices and imported goods....


US has every legitimate reason to bring in the Outsourcing bill, esp. since the widening gap between rich and poor. It failed because Republicans live in this lala land called Free Market Capitalism, which only exists in a handful of city states.

The US consumer is over-leveraged and almost done with this credit crisis. If you have build export-oriented economy with plans to sell to american consumer, your days are nearing .. the dollar will have precipitous fall in the future.. and it is just matter of time, the dirty float or peg will lose the sheen because of the lose of dollar value.

Cost-cutting and competitive advantage is as good as your consumer is employed. If the consumer is unemployed, no amount cost-cutting on your part makes him to buy what you produce.

The current profitable corporations are doing it by cost-cutting and foreign revenues. Its a fact that American consumer is done. Once american economy tanks which is likely to happen in next 2 years, it is race to bottom.

The Bush & Obama administrations have only kicked the can down the road.. no the economic crisis is neither fully handled or resolved, it will again come up in few years.

 

[CardSharp]

Ah!!! If only things were as "hunky - dory" as you explain. The Indian government subsidizes exporters both of goods and service sector at the cost of Indian consumer, with the GREAT DIRTY FLOAT. The Chinese are even worse with their PEG.

So what is free market? Is India a free market economy? The simple answer is NO. Why does it take so many years for Walmart or Tesco to enter India? Yeah, it is Indian protecting those mom&pop shops, right? those small farmers and their brokers.. etc. Why not millions of Indians will profit from better quality goods esp. from unadulterated food items. Farm to Market situation may actually improve in the short term. Better distribution of commodities in general.. so why not India do this.

Why India subsidizes Infy, Wipro and TCS with dirty float? If it can really help the Indian consumer with less Petrol prices and imported goods....


US has every legitimate reason to bring in the Outsourcing bill, esp. since the widening gap between rich and poor. It failed because Republicans live in this lala land called Free Market Capitalism, which only exists in a handful of city states.

Might as well ditch the tri-colour and go for a double dose of the red white and blue.

 

[below_freezing]

How Does Outsourcing Affect the U.S. Economy?

How outsourcing affects the US economy is a matter of great debate. For those to the political right, this practice will have an overall positive effect on the US economy, since it saves money for companies, opens up opportunities for greater entrepreneurship in the US, and leads to more Americans holding higher level jobs. Critics suggest hiring foreign workers has an immediate effect on the US economy by stripping many Americans of jobs they would have performed, particularly by semi-skilled or skilled laborers. The way that companies are taxed based on outsourcing may decrease a corporation’s tax debt and thus decrease federal spending.

Both sides on this issue and all those who try to navigate a middle road between the two sides, have some valid points. It is true that outsourcing has led to job loss in the US, and has had a detrimental effect on those people who may be only minimally qualified to work. It’s also the case that there are plenty of skilled labor jobs being outsourced to foreign countries. The loss is not only to people with minimal job skills.

A problem for those Americans who are impoverished, and might take minimal skill jobs is that it is now much harder to get jobs of this type. When President Clinton enacted the Welfare to Work plan in the 1990s, he was attempting to encourage people to get back to work so as to reduce government spending in welfare. Unfortunately, with fewer jobs available for unskilled workers, people may find themselves in exceptional poverty. Poverty does not benefit the US economy since it reduces consumer spending and tax revenues.

Even in the middle classes, there are plenty of jobs that are now outsourced. This has been particularly the case in the computer and technology industry. Again, inability to find work means inability to purchase homes, spend money, and profit companies. When people don’t buy, corporations that produce things don’t make money, which can thus “trickle down” to fewer jobs available and a greater desire to outsource to make things more cheaply so they will be more attractive to consumers.

Those supporting outsourcing say that lowering expenses of corporations will create jobs. There are plenty of government agencies that outsource some of their work, saving them millions of dollars, a direct effect on the US economy and on federal spending. A common theory contends that being able to pay people lower wages for work means that companies will be able to produce things with less expense and transfer this saving to consumers. Lower prices may mean more consumer spending, and companies will be able to hire more workers in the US because they’re paying less for workers outside of it.

Further, many argue that giving jobs to workers in less developed countries improves those countries economically and increases trade for US products. It also increases a country’s ability to pay back debts to the US, and may promote better political relationships. Companies economically benefit by selling their products in other countries. This means they can hire more people in the US, lower their prices on products for US consumers.

There is another “side” to the issue of outsourcing that needs to be addressed. Not all people in other countries economically benefit from outsourced jobs, and some companies aren’t dedicated to providing humane working conditions. Outsourced work may be performed by children, or in inhumane working conditions. Abuses of foreign employees might not benefit US trade or political relationships.

Outsourcing remains a difficult issue, but it does remain. Virtually no one, on any side of the argument concedes that outsourcing can be eliminated completely. There are those who feel that corporations are evading taxes and depriving the government of needed money and suggest corporations should be taxed for outsourcing, and rewarded for keeping jobs within the US. Others feel the temporary loss of jobs will be followed by greater economic growth in the US and will ultimately be worth the cost

smell like bs to me, the debt part is laughable; the countries that are best at outsourcing have no debt to the US, the countries with the most debt to the US have no ability to outsource.

 

[InPhilTraitor]

Might as well ditch the tri-colour and go for a double dose of the red white and blue.

Dude, what is your problem?
I do not have to be "cheerleader" for outsourcing to be an Indian.

I do not need any advice from a CHINESE guy, to appraise my Indianess.

I expected an Indian guy with false sense of ToI-brand patriotism bash me. Wow a chinese guy is questioning how Indian I am? Wow, where the world has come to. I have to explain my Indianess to a CHINESE guy who claims to live in CANADA.

Lay off your personal attacks on me.. You are name calling me way too much, which is beyond distasteful.