[Congressional Record Volume 150, Number 27 (Thursday, March 4, 2004)]
[Senate]
[Pages S2181-S2186]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OUTSOURCING U.S. JOBS
Mr. BOND. Madam President, yesterday we began our discussion on
outsourcing--a subject well worth discussing because it is of great
concern.
I am sorry I didn't have a chance to hear all of the discussions
because I think we need to address all of the issues related to the
needless outsourcing of U.S. jobs abroad. It is a problem in my State
as it is in many others. I imagine I am not the only Member of this
body who has been confronted with workers who have lost their jobs, and
many more who feel that the loss of their job is likely. They raise
these concerns about outsourcing and jobs going abroad.
Yesterday I heard a lot of strong rhetoric about how bad it was, but
I didn't hear a discussion of the many complicated issues that go into
outsourcing. I did not hear a thorough discussion of how effectively we
can remedy the problem.
As a matter of fact, the chairman of the Finance Committee raised the
question that perhaps one of the remedies being proposed might put us
in violation of the World Trade Organization rules with the possible
imposition of much broader penalties on other U.S. workers not directly
affected.
I think it is time we begin a discussion of this complicated issue. I
hope we have hearings on it. I hope we have discussions on it because I
think the people of America need to understand what it is like as we
live in a true world economy.
I want to look first at what I consider to be a real problem of
outsourcing; that is, governmentally enforced outsourcing. You say,
What? The Federal Government and State governments are threatening to
drive jobs out of the United States? Do we realize that?
In this body last year, I led a debate in which there were strong
opinions on both sides. I don't think I need to remind my colleagues of
the debate over the regulation proposed by the California Air Resources
Board that proposed to require all small engines--the engines we have
in weed trimmers, in lawnmowers, leaf blowers and chainsaws--would have
to have catalytic converters. This was a very contentious debate. I
thank my colleagues who supported me and who helped us prevent the
imposition of this rule nationally outside of California.
[[Page S2182]]
We talked about some of the dangers--the danger that 1,100-degree
catalytic converters would start fires. Grass burns at 500 degrees. The
danger of a small engine with a 1,100-degree catalytic converter is
great. But there was a more direct danger. If that California
regulation had gone nationwide, then the companies set up to
manufacture small engines would not have been able to manufacture them
in their existing facilities. They told us--and outside experts
agreed--that they would have to rebuild these facilities. Where would
they rebuild the facilities? They would rebuild the facilities in China
because they could do it so much more cheaply and use less expensive
labor in China to turn out the engines. Some of them are now produced
in China, and they would have moved all of the small engine production
to China.
I was in Poplar Bluff, MO, last Saturday night. I was thanked by the
1,100 employees of Briggs & Stratton in Poplar Bluff. I was thanked,
and my colleagues in this body and in the House were thanked, because
we took steps to stop the California Air Resources Board from sending a
regulation nationwide that would have cost them their jobs. Not just
1,100 jobs at Poplar Bluff in Missouri, a total of 5,000 jobs in
Missouri would have moved offshore. They would have been outsourced.
Nationally, more jobs in Wisconsin, almost as many jobs in Kentucky,
jobs in Alabama, jobs all across the Midwest, a total of 22,000
American jobs would have been outsourced by that governmental
regulation if this body, at my request, and the other body at the
request of Congresswoman Emerson, had not been able to say you are not
going to impose those restrictions outside the State of California. I
thank my colleagues on behalf of the workers in Missouri and around the
Nation whose jobs were not outsourced.
But then we have another problem. Do you know what is driving jobs
offshore now? A shortage of natural gas. Natural gas prices have run
way up because of governmentally enforced provisions. The natural gas
crisis we have in the United States is a governmentally enforced
shortage, a governmentally enforced hike. Many low-income families find
their natural gas bills going through the ceiling. All of us who heat
with natural gas see our natural gas bills going up.
Worse, men and women who work in industries that use natural gas--
chemical and related industries--are seeing their jobs move offshore
because the producers of those goods have to go to other countries
where they have abundant natural gas supplies, where the natural gas
supply has not been constrained by governmental action and not been
enhanced by governmental mandate. We have been sitting around here and
we cannot get an energy bill through that would tap the absolutely
essential natural gas resources in the Presiding Officer's State of
Alaska--and, I might add, ANWR, too.
We have natural gas, but we cannot use it. Why? Because governmental
regulations say we cannot drill here or there; we have not been able to
build a pipeline.
Why have natural gas prices gone up? We have mandated electric
utilities not to use abundant coal but to use natural gas. Natural gas
should not be used to fire electric generating boilers. It has too many
other uses.
There was an article last week in the Wall Street Journal by Russell
Gold talking about how natural gas costs hurt United States firms:
The root of higher natural-gas prices is a federal policy
that promotes use of the relatively cleaner-burning fuel
without providing incentives or means for natural-gas
companies to increase production. So while demand soared in
recent years, especially from a raft of new gas-fired power
plants, producers have struggled with supply. Most North
American gas fields are years past their prime, and
environmental restrictions prevent drilling on many of the
most promising areas.
He has summed it up well. We have a crisis in natural gas prices and
natural gas supply and in outsourcing of natural gas-using industries
because of government policy. The farmers in my State have to use
fertilizer. The ``n'' in the three-numbered fertilizer most farmers use
or the anhydrous ammonia comes from natural gas, and they see
tremendously high prices. I believe in a little bit of 13/13/13 and the
prices jumped in that small sack I buy. When you are buying tons and
tons of this, it cuts into farmers' profits and raises their costs.
Do you know what I think. We have all these impact statements,
environmental impact statements, but maybe what we need is a jobs
impact statement. Before we pass one of these good ideas or before some
agency of government comes up with a new regulation, maybe they ought
to have to do an impact on the jobs it would cost or create.
I would like to have some of my colleagues who have been so vocal and
persuasive and vociferous in arguing against outsourcing to have a
chance to vote on whether we ought to have a jobs impact statement.
That seems to make a lot of sense to me. Maybe we can do something. I
will be working on that. I may offer that for this body's
consideration.
But I tell you something else that is causing outsourcing and that we
have not done anything about. We cannot move forward on asbestos
litigation reform. There are 3,000 or 4,000 people who are tragically
sick because of asbestos, but the asbestos trial lawyers have filed
class action suits with 700,000 plaintiffs.
That struck home for me because I live in northeast Missouri. My
hometown of Mexico, MO, used to call itself the saddle horse and fire
clay center of the world. Saddle horses are three- and five-gaited
horses. Rex McDonald, trained by Tom Bass, is one of the leaders.
Unfortunately, we are no longer the fire clay or refractory center of
the Nation. We had thousands and thousands of people employed in making
high-temperature and abrasive-resistant bricks that line steel furnaces
and petroleum-cracking furnaces that line the Navy boilers. That used
to be the major industry.
But it turns out that some time ago there was some asbestos used in
the mortar that held the refractory's products together. So all of
those companies have 700,000 lawsuits filed against them. Most, if not
all of them, have been forced into bankruptcy because of asbestos
litigation. Their buyers have come in and picked up the customer lists
and the recipes and moved the production to Canada to supply our basic
industry needs. The most basic industry, basic for steel, for aluminum,
for petroleum products, has been driven largely to Canada to get away
from asbestos litigation.
We are not taking the steps we need to allow us to bring back into
the United States the production of one of the most basic elements of
heavy industry. That is one thing maybe we can work on. Maybe we can
pass an asbestos bill--we should have done so a long time ago--to care
for those who are really sick, but also to cut off frivolous claims
that do nothing but line trial lawyers' pockets. Tort reform is another
thing we need to address to keep businesses productive so they can hire
workers.
I tell you one other thing. I have a particular interest because the
Senator from Maryland and I chair the appropriations subcommittee that
appropriates funds for the National Science Foundation. We are seeing a
tremendous shortage of scientists and engineers. We are just not
finding enough United States students who want to follow a science or
engineering curriculum. With the increasing developments in science and
technology and engineering, we have to be turning out more scientists.
We need more money. I make a plea for more money for the National
Science Foundation budget so we can increase the incentives the
National Science Foundation is using, along with science centers and
educational institutions through the country, to train more scientists
and engineers and technicians.
Yes, we need to train more people in community colleges. That is very
important because if we do not train them, other countries, such as
India, with tremendous reservoirs of engineers are turning out top
quality engineers. If we do not have the engineers to do the work that
is needed, that work is going to go to India. We need to do something
about it. And we ought to begin moving.
In a growing competitive and interdependent global economy, as any
economist will explain, there are increasingly greater flows of trade,
capital, and labor.
Outsourcing apparently has been occurring wherever freedom has
existed
[[Page S2183]]
because private businesses will seek to increase efficiency and provide
better products at a lower cost by focusing resources on what they do
better than everyone else. This has occurred in the United States in
the previous half century, as the United States employment grew from 45
million to 130 million jobs.
I was one who thought I would always buy an American car. I thought I
had been doing so. But do you know something. More and more American
cars have foreign-made parts and foreign-made components. At the same
time, more foreign companies are coming into the United States. You
have to do a lot of research to find out which car has more and which
car has less U.S. components.
The auto industries are employing people at good wages in the United
States at high-tech jobs, while lower-tech jobs are done overseas. But
the American consuming public has demanded the best quality
automobiles. So it is difficult, when you go out and try to buy
American, to find out what is truly American. Those eggs have been
scrambled, and it is difficult to unscramble them.
But as much a problem as outsourcing and foreign trade is, I want to
give you some good news. There are some in this body who voted for the
North American Free Trade Agreement and have now roundly condemned it.
But on Monday of this week, the Governor of Missouri proudly
announced--and I congratulate the State--that Missouri exports grew by
6.5 percent in 2003. From his release, it says Canada and Mexico were
top importers of Missouri products. Canada imported $3 billion of
products; Mexico imported $748 million of products. Not bad. Those are
two countries I believe are in NAFTA.
But more interestingly, the Governor goes on to say:
More than 75,000 jobs in the state were directly tied to
industries that export to other countries. . . . Also, the
top 10 exporting industries paid higher average annual wages,
at $41,894, than the statewide average wage of $33,600.
Madam President, I ask unanimous consent that release be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Missouri Exports Grow 6.5 Percent in 2003
Missouri's exports increased by 6.5 percent in 2003,
reaching $7.23 billion, the state's Department of Economic
Development said.
Missouri's exports totaled $6.79 billion in 2002.
Transportation equipment was Missouri's top export in 2003
with nearly $2.2 billion in sales. Other strong exports were
chemicals, plastics and rubber, leather products and
electrical equipment, appliances and components, and food and
similar products.
Canada and Mexico were the top importers of Missouri
products. Canada imported $3.08 billion of products, and
Mexico imported $748 million of products. The other top
importers of Missouri products were Japan, the United
Kingdom, China, Germany, Italy, Hong Kong, Belgium and
Australia.
Nationally, Missouri ranked No. 26 for export sales, but
its international sales grew faster than the nation's, which
grew an average of 4.4 percent.
More than 75,000 jobs in the state were directly tied to
industries that export to other countries, the department
said in a written release. Also, the top 10 exporting
industries paid higher average annual wages, at $41,894, than
the statewide average wage of $33,600.
Kelvin Simmons, director of the department, said Missouri's
exports seem to be returning to the level they were at before
the recession.
``Increased sales of Missouri products abroad is another
important indicator that Missouri's economy has turned the
corner on the national recession,'' Simmons said in the
release.
Mr. BOND. Madam President, as businesses and our economy
restructure--a natural occurrence of the business cycle--workers in our
country have done better overall. ``Overall,'' however, does not mean
everyone has done better. Many have not, and those are the people for
whom the overall benefits of restructuring or even the so-called
temporary nature of the unemployment is of little comfort because they
want to work and provide for their families but they do not have a job.
Yesterday afternoon, the Senator from New Jersey was very loudly and
strongly decrying the outsourcing of jobs, and he made, I believe--I
did not hear all of his statement--a very compelling case. At the same
time, the firm he was associated with announced last fall it intended
to establish an Indian unit with 250 employees working on operations in
technology. Now, how does that square with not outsourcing? That is
something perhaps we should discuss in a hearing or further debates.
But I just came across an interesting article from Tom Friedman,
certainly not with a Republican base, but I think a very good New York
Times international analyst. He was talking about interviews he had
with an Indian who was a founder of 24/7's customer call center. He
said:
How can it be good for America to have all these Indians
doing our white-collar jobs?
The reply was:
All the computers are from Compaq. The basic software is
from Microsoft. The phones are from Lucent. The air-
conditioning is by Carrier, and even the bottled water is by
Coke, because when it comes to drinking water in India,
people want a trusted brand. On top of all this . . . 90
percent of the shares . . . are owned by U.S. investors
[including U.S. pension funds]. This explains why, although
the U.S. has lost some service jobs to India, total exports
from U.S. companies to India have grown from $2.5 billion in
1990 to $4.1 billion in 2002. What goes around comes around,
and also benefits Americans.
Mr. Friedman concludes his article quoting the Indian gentleman
saying:
It's unfair that you want all your products marketed
globally, but you don't want any jobs to go.
And Mr. Friedman replies:
He's right. Which is why we must design the right public
policies to keep America competitive in an increasingly
networked world, where every company--Indian or American--
will seek to assemble the best skills from around the globe.
And we must cushion those Americans hurt by the outsourcing
of their jobs. But let's not be stupid and just start
throwing up protectionist walls, in reaction to what seems to
be happening on the surface. Because beneath the surface,
what's going around is also coming around. Even an Indian
cartoon company isn't just taking American jobs, it's also
making them.
Those are Mr. Friedman's comments.
Madam President, I ask unanimous consent that op-ed be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the New York Times, Feb. 26, 2004]
What Goes Around . . .
(By Thomas L. Friedman)
BANGALORE, India--I've been in India for only a few days
and I am already thinking about reincarnation. In my next
life, I want to be a demagogue
Yes, I want to be able to huff and puff about complex
issues--like outsourcing of jobs to India--without any
reference to reality. Unfortunately, in this life, I'm stuck
in the body of a reporter/columnist. So when I came to the
24/7 Customer call center in Bangalore to observe hundreds of
Indian young people doing service jobs via long distance--
answering the phones for U.S. firms, providing technical
support for U.S. computer giants or selling credit cards for
global banks--I was prepared to denounce the whole thing.
``How can it be good for America to have all these Indians
doing our white-collar jobs?'' I asked 24/7's founder, S.
Nagarajan.
Well, he answered patiently, ``look around this office.''
All the computers are from Compaq. The basic software is from
Microsoft. The phones are from Lucent. The air-conditioning
is by Carrier, and even the bottled water is by Coke, because
when it comes to drinking water in India, people want a
trusted brand. On top of all this, says Mr. Nagarajan, 90
percent of the shares in 24/7 are owned by U.S. investors.
This explains why, although the U.S. has lost some service
jobs to India, total exports from U.S. companies to India
have grown from $2.5 billion in 1990 to $4.1 billion in 2002.
What goes around comes around, and also benefits Americans.
Consider one of the newest products to be outsourced to
India: animation. Yes, a lot of your Saturday morning
cartoons are drawn by Indian animators like Jadoo Works,
founded three years ago here in Bangalore. India, though, did
not take these basic animation jobs from Americans. For 20
years they had been outsourced by U.S. movie companies, first
to Japan and then to the Philippines, Korea, Hong Kong and
Taiwan. The sophisticated, and more lucrative, preproduction,
finishing and marketing of the animated films, though, always
remained in America. Indian animation companies took the
business away from the other Asians by proving to be more
adept at both the hand-drawing of characters and the digital
painting of each frame by computer--at a lower price.
Indian artists had two advantages, explained Ashish
Kulkarni, C.O.O. of Jadoo Works. ``They spoke English, so
they could take instruction from the American directors
easily, and they were comfortable doing coloring digitally.''
India has an abundance of traditional artists, who were able
to make the transition easily to computerized digital
painting. Most of these artists are the children of Hindu
temple sculptors and painters.
Explained Mr. Kulkarni: ``We train them to transform their
traditional skills to animation in a digital format.'' But to
keep up
[[Page S2184]]
their traditional Indian painting skills, Jadoo Works has a
room set aside--because the two skills reinforce each other.
In short, thanks to globalization, a whole new generation of
Indian traditional artists can keep up their craft rather
than drive taxis to earn a living.
But here's where the story really gets interesting. Jadoo
Works has decided to produce its own animated epic about the
childhood of Krishna. To write the script, though, it wanted
the best storyteller it could find and outsourced the project
to an Emmy Award-winning U.S. animation writer, Jeffrey
Scott--for an Indian epic!
``We are also doing all the voices with American actors in
Los Angeles,'' says Mr. Kulkarni. And the music is being
written in London. Jadoo Works also creates computer games
for the global market but outsources all the design concepts
to U.S. and British game designers. All the computers and
animation software at Jadoo Works have also been imported
from America (H.P. and I.B.M.) or Canada, and half the staff
walk around In American-branded clothing.
``It's unfair that you want all your products marketed
globally,'' argues Mr. Kulkarni, ``but you don't want any
jobs to go.''
He's right. Which is why we must design the right public
policies to keep America competitive in an increasingly
networked world, where every company--Indian or American--
will seek to assemble the best skills from around the globe.
And we must cushion those Americans hurt by the outsourcing
of their jobs. But let's not be stupid and just start
throwing up protectionist walls, in reaction to what seems to
be happening on the surface. Because beneath the surface,
what's going around is also coming around. Even an Indian
cartoon company isn't just taking American jobs, it's also
making them.
Mr. BOND. Madam President, there are many ways to address the
needless outsourcing of jobs. One of the things we could do is to have
the Government impose even more restrictions on the private sector.
However, in many cases that is not the solution; it is the problem.
According to the Congressional Research Service, there is a
relationship between high employment restrictions and high
unemployment. CRS says:
. . . the four largest countries with the most protection
(Germany, France, Italy, and Spain) had the highest
unemployment rates of any country.
CRS cites the ``unintended effect of making firms reluctant to take
on new workers'' is the result of the protectionist policies.
Interesting comments on this came from former Labor Secretary Robert
Reich, who was President Clinton's Secretary of Labor. On November 2,
2003, in the Washington Post, he said, in a headline: ``High-Tech Jobs
Are Going Abroad! But That's Okay.'' What is he talking about? How did
he say that? Man, that sounds bad. That sounds as bad as some of the
statements we have heard out of economists in this administration. I
will submit the whole thing for the Record, but at the end of it he
said:
So why don't I believe the outsourcing of high-tech work is
something to lose sleep over?
He says:
First, the number of high-tech jobs outsourced abroad still
accounts for a tiny proportion of America's 10-million-strong
IT workforce. . . .
Second, even as the number of outsourced jobs increases,
the overall percent of high-tech jobs going abroad is likely
to remain relatively small.
Next:
Outsourcing also poses quality-control problems.
Next:
As smart U.S. companies outsource their more standard high-
tech work, they're simultaneously shifting their in-house IT
employees to more innovative, higher value-added functions,
such as invention, creation, integration, key R&D and basic
architecture. . . .
There's no necessary limit to the number of high-tech jobs
around the world. . . .
In conclusion, this former Secretary of Labor says:
. . . it makes no sense for us to try to protect or
preserve high-tech jobs in America or block efforts by
American companies to outsource. Our economic future is
wedded to technological change, and most of the jobs of the
future are still ours to invent.
Madam President, I ask unanimous consent that the article by Robert
Reich be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Washington Post, Nov. 2, 2003]
High-Tech Jobs Are Going Abroad! But That's Okay
(By Robert B. Reich)
There's good news and not-so-good news in the American
workplace. The good news is that the economy is growing and
businesses are spending once again, on high technology. The
Commerce Department reported last Thursday a sharp pickup in
spending on equipment and software in the third quarter. Not
so good is the news that high-tech jobs have not come back,
at least not so far.
Jobs in America's sprawling information-technology (or IT,
as is known in the info world) sector--including everything
from software research, design and development to computer
engineering--are down 20 percent from late 2000. Salaries are
down, too. In 2000, senior software engineers earned
$130,000. The same job now pays no more than $100,000.
Meanwhile, a lot of high-tech jobs are moving offshore. Is
that a cause for concern?
When I was labor secretary, I fought to preserve U.S. jobs.
So you might assume that I would see the number of high-tech
jobs moving offshore as a troubling trend. And yet, I do not.
I'll explain why in a moment.
But lots of people are worried about it. Indeed, those
anxieties seem to be increasing:
On Sept. 30, Congress let the cap on H-1B visas issued to
foreign high-tech workers to shrink from 195,000 to its old
level of 65,000. The ostensible reason: to make sure more
high-tech jobs go to Americans.
Bills are pending in several state legislatures barring
state government projects from using offshore high-tech
workers.
High-tech workers are organizing against foreign
outsourcing. One group of them--the Organization for the
Rights of American Workers--has demonstrated outside
conferences on ``strategic outsourcing'' in New York and
Boston.
The fear is understandable.
More than half of all Fortune 500 companies say they're
outsourcing software development or expanding their own
development centers outside the United States. Sixty-eight
percent of more than 100 IT executives who responded to a
survey last spring by CIO magazine said their offshore
contracts will increase this year. By the end of 2004, 10
percent of all information-technology jobs at American IT
companies and 5 percent in non-IT companies will move
offshore, according to Gartner Co., a research and analysis
firm that specializes in high-technology trends. And by 2015,
according to a study by Forrester Research in Cambridge, an
estimated 3.3 million more American white-collar jobs will
shift to low-cost countries, mostly to India.
The trend isn't surprising. American companies are under
intense pressure to reduce costs, and foreigners can do a lot
of high-tech jobs more cheaply than they can be done here.
Already India has more than half a million IT professionals.
It's adding 2 million college graduates a year, many of whom
are attracted to the burgeoning IT sector. The starting
salary of a software engineer in India is around $5,000.
Experienced engineers get between $10,000 to $15,000. Top IT
professionals there might earn up to $20,000.
Meanwhile, it's become far easier to coordinate such work
from headquarters back in America. Overseas cable costs have
fallen as much as 80 percent since 1999. With digitization
and high-speed data networks, an Indian office park can seem
right next door. Matthew Slaughter, associate professor of
business administration at Dartmouth College, says
information-technology work ``will move faster [than
manufacturing] because it's easier to ship work across phone
lines and put consultants on airplanes than it is to ship
bulky raw materials across borders and build factories and
deal with tariffs and transportation.''
With such ease of communicating, the squeeze on H1-B visas
will do little to keep IT jobs out of the hands of non-
Americans. ``It doesn't make a difference for firms whose
business model has people largely working offshore,'' Moksha
Technologies Chairman Pawan Kumar told the Press Trust of
India. ``It . . . will make firms drive business where the
technology workers are.'' Guatam Sinha, head of the Indian
human-resource firm TVA Infotech, agrees. ``In fact, lots of
techies are coming back to India.'' India exported $9.6
billion worth of software last year. Such exports are
expected to grow 26 percent this fiscal year.
So why don't I believe the outsourcing of high-tech work is
something to lose sleep over?
First, the number of high-tech jobs outsourced abroad still
accounts for a tiny proportion of America's 10-million-strong
IT workforce. When the U.S. economy fully bounces back from
recession (as it almost surely will within the next 18
months), a large portion of high-tech jobs that were lost
after 2000 will come back in some form.
Second, even as the number of outsourced jobs increases,
the overall percent of high-tech jobs going abroad is likely
to remain relatively small. That's because outsourcing
increases the possibilities of loss or theft of intellectual
property, as well as sabotage, cyberterrorism, abuse by
hackers, and organized crime. Granted, not much of this has
happened yet. But as more IT is shipped abroad, the risks
escalate. Smart companies will continue to keep their core IT
functions in-house, and at home.
Outsourcing also poses quality-control problems. The more
complex the job order and specs, the more difficult it is to
get it exactly right over large distances with subcontractors
from a different culture. In a Gartner survey of 900 big U.S.
companies that outsource IT work offshore, a majority
[[Page S2185]]
complained of difficulty in communicating and meeting
deadlines. So it's unlikely that very complex engineering and
design can be done more efficiently abroad.
As smart U.S. companies outsource their more standard high-
tech work, they're simultaneously shifting their in-house IT
employees to more innovative, higher value-added functions,
such as invention, creation, integration, key R&D and basic
architecture. These core creative activities are at the heart
of these companies' competitive futures. They know they
have to nourish them.
The third and most basic reason why high-tech work won't
shift abroad is that high technology isn't a sector like
manufacturing or an industry like telecommunications. High-
tech work entails the process of innovating. It's about
discovering and solving problems. There's no necessary limit
to the number of high-tech jobs around the world because
there's no finite limit to the ingenuity of the human mind.
And there's no limit to human needs that can be satisfied.
Hence, even as the supply of workers around the world
capable of high-tech innovation increases, the demand for
innovative people is increasing at an even faster pace.
Recessions temporarily slow such demand, of course, but the
long-term trend is toward greater rewards to people who are
at or near the frontiers of information technology--as well
as biotechnology, nanotechnology and new-materials
technologies. Bigger pay packages are also in store for the
professionals (lawyers, bankers, venture capitalists,
advertisers, marketers and managers) who cluster around high-
tech workers and who support innovative enterprises.
In the future, some of America's high-tech workers will be
found in laboratories but many more will act like management
consultants, strategists and troubleshooters. They'll have
intimate understandings of particular businesses so they can
devise new solutions that meet those businesses' needs.
They'll help decide which high-tech work can most efficiently
be outsourced, and they'll coordinate work that goes offshore
with work done in-house.
Don't get me wrong. None of this is an argument for
complacency. It's crucial that America continues to be the
world's leader in innovation. Our universities are the best
in the world, but they can't remain that way when so many are
starved for cash. Federal and state support for higher
education must keep up with rising demand for people who are
creative and adaptive.
Federal government investments in basic research and
development are also vital. We need to guard against what is
already a drift away from basic research toward applied
research and development--that is, from the creation of new
knowledge that can be put to many different uses versus R&D
that's related to the commercialization of specific products,
especially military-related aerospace, telecommunications and
weapons.
And just as with laid-off manufacturing workers, we need to
ensure that high-tech workers are adaptive and flexible. They
should be able to move quickly and get the retraining they
need. Pensions and health insurance should be more portable
across jobs. High-tech workers who want to polish their
skills or gain new ones should have access to tax credits
that make it easy for them to go back to college for a time.
But it makes no sense for us to try to protect or preserve
high-tech jobs in America or block efforts by American
companies to outsource. Our economic future is wedded to
technological changes, and most of the jobs of the future are
still ours to invent.
Mr. BOND. Madam President, as we have this debate, it is impossible
to observe one nearly ignored reality. Despite whether we often or
always disapprove of corporate decisionmakers, it is impossible to be
for employees while being against employers. We cannot be unrestrained
in our desire to impose additional costs on employers and expect there
not to be harmful consequences to employees.
One would not know it by listening to some of the Presidential
wannabes, but when you put more burdens on employers, they respond.
They respond to punitive taxation, regulation, and litigation. They
will outsource. They will move away. They will respond positively to
incentives. We hope the incentives of the underlying subject of the
bill before us today to provide tax relief for exports will help us get
more jobs in this country.
In my State, governmental regulations, State and Federal, are being
used by some to try to prevent a foreign firm from investing $400
million in a plant that will employ 200 high-paid workers in a poor
area.
They are trying to stop insourcing. We are in year 3 of environmental
assessments to see if the plant can meet all the EPA, Corps of
Engineers, and State standards. If we keep piling on burdens, this firm
can conduct operations in Thailand. I am afraid that option may be
becoming more attractive every day.
As I said, the trial lawyers have litigated the refractory business
out of Missouri. According to the National Association of
Manufacturers, we have the most expensive legal system in the world,
yet filibuster after filibuster keeps us from reforming the system.
Tort taxes, for which America is famous, are estimated to have been
over $230 billion in 2002, 13 percent higher even than the costs in
2001. Who pays for these skyrocketing costs? The tort lawyers pocket
their 40 percent, but employers, employees, and consumers contend with
those costs.
We are not upgrading the locks and dams on the Mississippi River that
are the vital lifeline to make sure we can use the farm productivity of
the Midwest to ship grain to export markets around the world, export
markets that are bringing up prices and restoring economic well-being
to the agricultural sector. We need to invest in our infrastructure.
Let me add highways. Highways are very important to growing jobs. I
wouldn't want to leave the Chamber without saying that. There is much
work to be done.
Some apparently think that highways are too expensive: ignoring the
greater expense of decay and inefficiency. A good highway bill has
passed the Senate, but is bogged down and may not emerge from the
House.
We spend $60 million over 12 years studying whether our 70-year-old
dilapidated locks on the Mississippi River should be modernized--a
study that has resulted in nothing but red tape, congestion, and delay,
without resolution. While failing to respond to the obsolescence of our
Nation's most important inland waterway and artery to the world's
markets, we are at risk of outsourcing corn and bean production to
other countries.
This quagmire has been excellent news for South American farmers who
are winning market share as fast as we are losing it.
On the Missouri River, another key waterway, the U.S. Department of
Interior proposed in 2000 to end water transportation and increase
flood risk for downstream businesses and landowners so they could
experiment with pallid sturgeon habitat. Our farmers and other shippers
who are struggling to compete look to government for more efficient
transportation options. Instead, government uses it regulatory power to
consign farmers and other employers to the mercy of a higher-cost
transportation monopoly. More good news for foreign farmers courtesy of
the U.S. Federal Government.
Farmers and businesses in my State routinely raise issues related to
high energy costs. We need to be encouraging domestic production of
energy. Instead we discourage it. Rather than safely developing
renewable resources at home and oil in Alaska, we import oil from the
Middle East. We had an energy bill that promoted all forms of domestic
energy production but could not overcome a filibuster. So we are
outsourcing midwestern farm jobs and Alaskan energy jobs to Saudi
Arabia by Congressional obstruction. The Wall Street Journal featured
an article recently noting how some firms were ``off-shoring'' in
response to dramatic increases in natural gas necessary to fuel their
operations.
Then there is the tax burden on U.S. businesses. According to some
estimates, the U.S. has the second highest corporate tax burden in the
world--second only to Japan. Most small businesses are taxed as
individuals and are subject to the top marginal rates. Consequently,
according to election-year Democrat rhetoric, these small businesses
and corporations are ``the rich'' and next week we will see numerous
attempts to raise their taxes.
Again, Congress can't stick it to the employers and claim to be
deeply concerned about employees. We don't always like what
corporations do--and I troubled by what seems like a herd mentality
when it comes to outsourcing of many jobs--but businesses exist because
Americans voluntarily purchase their products, Americans own them,
Americans run them, Americans work for them.
No one advocates a business environment free of regulation, but we
cannot continue to be oblivious to the costs that we, little-by-little,
heap upon our employers.
If we want them to hire people and do so in the U.S.--and I certainly
do--why don't we prove it. Why don't we resist raising their taxes next
week? Why don't we end the filibuster on legal reform or ``tort tax''
reform? Why don't we end the filibuster on an energy bill? Why don't we
modernize our infrastructure? Why don't we recognize that by working
with businesses, we can reduce pollution rather than reduce American
jobs.
[[Page S2186]]
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, it is my understanding there are two
additional requests for time. Do we have time left on the Democratic
side?
The PRESIDING OFFICER. There is no time remaining on the Democratic
side.
Mr. REID. I ask unanimous consent that there be an additional 10
minutes equally divided and that our 5 minutes go to the Senator from
Delaware, Mr. Carper, following the statement of the Senator from
Minnesota.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. COLEMAN. Madam President, I yield to my friend, the Senator from
Delaware.
Mr. CARPER. I thank the Senator from Minnesota.
The PRESIDING OFFICER. The Senator from Delaware.
____________________