[Congressional Record (Bound Edition), Volume 150 (2004), Part 3]
[Senate]
[Pages 3431-3436]
[From the U.S. 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 out-
sourcing 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 out-
sourcing; 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 chain-
saws--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.
  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

[[Page 3432]]

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 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

[[Page 3433]]

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 3434]]

      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

[[Page 3435]]

     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 
     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

[[Page 3436]]

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.
  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.

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