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Outsourcing Bill Shot Down in the Senate
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October 02, 2010, 12:53 PM
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Last Monday (9/27/2010) a major vote on outsourcing occurred in the Senate. You probably didn`t hear about it because the mainstream media was missing in action.

S.3816 - "Creating American Jobs and Ending Offshoring Act" as sponsored by Senator Durbin was designed to encourage employers to hire Americans. The bill included tax incentives such as a payroll tax holiday for companies that move jobs back to the United States and would have limited deductions and tax credits for companies who opted to move jobs offshore.

This slightly partisan blog does a good job of explaining what happened:

Today, Senate Democrats tried to bring the Creating American Jobs and Ending Offshoring Act, which would give "companies...that shift overseas jobs to the U.S." a special payroll tax holiday, to the floor for a full vote. Yet thanks to a united Republican filibuster and the defection of a handful of Democratic caucus senators — Max Baucus (MT), Ben Nelson (NE), Jon Tester (MT), Mark Warner (VA), and Joe Lieberman (CT) — the Democrats failed to achieve cloture and were unable to bring the bill up for a vote. "Sanders: Chamber Would Rather Have Companies Pay Vietnamese 20 Cents An Hour Than Hire Americans", by Zaid Jilani on Sep 28th, 2010
Much has been said about how the bill failed, and there is no shortage of finger pointing between Democrats and Republicans, but very few of them explain why the bill failed. In this case defeat came from a familiar address: K-STREET!

While the media was silent, a blitzkrieg of high-powered lobbyists descended on Washington DC to defeat the bill. The Chamber of Commerce wrote a strong letter to Congress that makes the incredulous assertion that hiring Americans has no net benefit for the economy.

"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," wrote Chamber executive vice president Bruce Josten in letter to senators. U.S. Chamber comes out against Senate outsourcing bill, by Jay Heflin, The Hill, 09/23/10
Not to be outdone, the National Association of Manufacturers (NAM) wrote their own letter to the Senate:
The National Association of Manufacturers (NAM), the nation’s largest industrial trade association representing small and large manufacturers in every industrial sector and in all 50 states, urges you to oppose S. 3816, the Creating American Jobs and Ending Offshoring Act. Letter to Senate from NAM, 9/27/2010
Heavy hitters from India`s NASSCOM and CII joined the K-Streeters to persuade the Senate to vote against the outsourcing bill. . They are obviously very pleased with the end result:
"We welcome the move. The anti-offshoring bill was more of an electoral rhetoric. We had met the Congressmen, key Government officials and American industry last week and expressed our concerns against the protectionist measures," Nasscom Vice-President Ameet Nivsarkar said.

Ganesh Natarajan, the chairman of the CII national committee on IT and the CEO of Zensar Technologies said, "Unemployment is a concern in the US. But they should understand that any protectionist barrier will deepen the recession. This kind of measures will not help create job in the US."

India Inc happy about defeat of anti-outsourcing bill in US, India Economic Times, 30 Sep. 2010

I have not seen evidence of lobbying by the Chinese on this one but it would be odd if they didn`t chip in since they are in the U.S. to lobby against moves to devalue their currency, the Yuan.

Senator Chuck Grassley, who has lately seemed to side with American labor on outsourcing issues and H-1B visas, surprised many by opposing the bill. He claimed that the bill would decrease the net number of American jobs.

"The legislation that was defeated in the Senate today would make U.S. companies pay an extra tax, of up to 35 percent, compared to foreign competitors, and really hit companies like John Deere, where they have big overseas markets," Grassley said. "The reality of the consequences for manufacturing jobs in the United States was cast aside to create a debate for political demagoguery." U.S. Sen. Grassley: Senate proposal played politics with jobs, Iowa Politics, 9/28/2010
Sen. Grassley was opposed to the bill and yet he offered to amend the Outsourcing bill with two of his own that attempt to limit the use of H-1B/L-1 and to prevent fraud. So, on the one hand he opposed the Outsourcing bill, but on the other hand he included his amendments. That`s political game making on a level that`s difficult to comprehend!
Congressional Record 111th Congress (2009-2010) Page: S7580 excerpts by Sen. Grassley

The first amendment mirrors a bill that the junior Senator from Vermont and I have coauthored. Known as the Employ America Act , this amendment would prevent any company engaged in a mass layoff of American workers from importing cheaper labor from abroad through temporary guest worker programs.

The second amendment I filed yesterday mirrors a bill that the senior Senator from Illinois and I have worked on for several years. Known as the H-1B and L-1 Visa Reform Act of 2009, this amendment would improve two key visa programs by rooting out fraud and abuse while making sure Americans have the first chance of obtaining high-skilled jobs in this country.

These two amendments go directly to the concerns about job creation and prevention of offshoring of U.S. jobs. Both amendments are bipartisan. Yet if cloture is invoked, these amendments would fall on the Senate cutting room floor.

Sen. Grassley could have been shouting at the wind and it would have done just as much good because Sen. Reid totally ignored everything Grassley said. Before a vote could be taken to add those two amendments Reid asked for a vote for cloture. There weren`t enough Senators that voted in favor of cloture so the entire bill with amendments died. Grassley joined the ones that voted NAY, so he voted against a bill that he submitted amendments to.