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Federal bill targets offshore labor

The political response to outsourcing continues as Sen. Christopher Dodd introduces legislation seeking to ban the movement of government work to overseas locations.

Offshore outsourcing continues to raise the hackles of American politicians.

This week Sen. Christopher Dodd (D-Conn.) introduced legislation seeking to ban offshore outsourcing in three areas of government work: privatizing of federal work, federal purchase of goods and services, and state government procurements using federal funds.

Under Dodd's U.S. Workers Protection Act, state governments would be eligible to receive federal funds only after they certify that the money will not go offshore. The senator asserts that the United States is losing jobs at an "alarming" rate, saying that the country has lost 2.7 million manufacturing jobs since 2001 and that as many as 3.3 million jobs may be sent overseas in the next 15 years.

"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," Dodd said in a statement. "This legislation is a step toward stopping the needless export of American workplaces."

Outsourcing is emerging as a major political issue in the run-up to the November presidential elections. Although much of the work heading overseas has been in white-collar categories--such as engineering and software design work moved to cheaper locations such as India and the Philippines--the Democratic candidates have tended to focus on manufacturing jobs.

Government officials in the United States have responded to protests against outsourcing by crafting legislation and curtailing some planned work. Last year, for instance, Indiana canceled a project awarded to a company in India, claiming the move was necessary to protect the jobs of local citizens. But not all politicians see an immediate need for laws against outsourcing. Members of a congressional delegation that recently visited India said they were concerned about job losses but added that legal measures may not be of much help.

Indian politicians and technology executives, meanwhile, have been keeping close watch on developments in the United States and Europe. Government ministers and groups such as the Confederation of Indian Industry have decried proposed laws as protectionist and against the spirit of free trade envisaged by the World Trade Organization.

The Indian IT industry group National Association of Software and Services Companies, however, said that the effect of efforts, such as Dodd's bill, on the Indian IT industry would be very small, as the share of U.S. federal government contracts in exports of IT software and services from India is less than 2 percent.