Bill aims to curb offshoring

House members introduce a bill to discourage American companies from shipping jobs overseas by controlling the flow of federal grants and loan guarantees.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
Declan McCullagh
2 min read
In a move designed to make U.S. companies think twice about sending jobs overseas, a group of politicians is proposing a novel way to punish them for it.

A new bill, drafted by Socialist legislator Bernard Sanders and backed by a few dozen Democrats and Republicans, would slap limits on federal grants to companies that fire U.S. workers and hire replacements abroad.

"People who are working in technology jobs know the threat to their jobs right now," said Sanders spokesman Joel Barkin. "They've seen their jobs going over to India by the hundreds of thousands, if not millions. What this legislation would do is encourage these companies to think twice before shipping over these technology jobs."

The proposed Defending American Jobs Act, introduced on Wednesday, requires federal agencies that provide grants or loan guarantees to businesses to obtain reports on the number of employees those companies have inside and outside the United States, and on how much each group is being paid. One year after the bill becomes law, which is unlikely to happen this year, grant or loan recipients would be required to disclose how many domestic employees have been laid off as a proportion of the company's total global work force.

Here's the catch: If more U.S. workers than foreign workers received the ax, the company would be "ineligible for further assistance" until it started hiring American employees again.

It's unclear what the measure's prospects are. To be enacted, it would need the support of the House Republican leadership.

"The Republican leadership is corporately owned and only interested in the interests of corporate America and their campaign contributors," Barkin acknowledged. "Do I see them being supportive? Unlikely. On the other hand, I think we'll see many, many (supporters) on both sides of the aisle, simply because people are going home to their districts and seeing that people's lives are being ruined by our trade policies."

The current U.S. unemployment rate of around 5.7 percent is not especially high by historical standards. But a growing unease among white-collar workers has turned the topic of offshore outsourcing into a potent election-year issue, with presumptive Democratic nominee John Kerry denouncing "Benedict Arnold" CEOs in stump speeches. One report this week, however, claimed that Kerry has received $370,000 in campaign contributions from those same companies.

A few Republicans, including libertarian firebrand Rep. Ron Paul, R-Texas, support the bill. A related proposal, which would restrict offshore outsourcing of government work, has been introduced in the U.S. Senate.