[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[House]
[Pages 5535-5541]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          OUTSOURCING OF JOBS

  The SPEAKER pro tempore (Mr. Carter). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from Washington (Mr. Smith) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. SMITH of Washington. Mr. Speaker, I want to talk this evening a 
little bit about a subject that has been on everyone's mind and 
certainly being talked about throughout the country, and that is the 
issue that has come to be known as outsourcing or offshoring, the 
concern that many Americans have about the number of jobs that used to 
be done in the United States that are now being done overseas.
  The best way to think about this issue is to think about our entire 
economy. It is not really just about outsourcing or offshoring of jobs. 
It is about the future of the U.S. economy and, most specifically, 
where the jobs are going to be. That is the fear that I hear expressed 
by my constituents and by people throughout the country. They are 
worried about what jobs are going to be here for them in the future and 
for their children and for their grandchildren. What should they 
prepare for? What type of economy are they going to have? Are we going 
to have enough good jobs across the board so that the people of our 
country can be employed and employed at a standard of living that we 
have all come to expect?
  I think, when I look at the debate, we have to be very careful about 
how we approach this issue; and I am pleased in working with the new 
Democrats and also with other members of the House Democratic Caucus 
that we are working on a series of proposals and a series of issues to 
try to address this issue in a serious and intelligent manner that will 
help us create the type of economy that we all want.
  Right now, there are sort of two directions that we see being taken 
by the majority of folks, and neither one of them is particularly 
helpful. On the one hand, I do not think it makes sense to take a full-
scale protectionist approach, to basically say that we need to stop 
trading with other countries that do not have the same labor and 
environmental standards that we do, that we need to cut off immigration 
and, in essence, we need to adopt a policy that says we are going to do 
whatever we can to protect every job that currently exists, regardless 
of the consequences. History has shown us that sort of approach leads 
to less economic growth in the future, and that is what this is all 
about, is long-term, sustainable economic growth for the benefit of all 
of us.
  I would point out that the most protectionist economy in the world 
right now is, arguably, Japan. They have done just about everything 
they can to protect all of their existing jobs, all of their existing 
businesses. They subsidize industry. They erect tariff barriers to 
outside countries coming in and competing with them. They protect bad 
loans even long after they are no longer obviously going to be paid. 
They do everything they can to protect that economy, and it has led to 
a decade-long recession in Japan.
  One needs to be able to change. One needs to be able to grow. One 
needs to be able to not just protect the bulk of the jobs they have 
but, most importantly, to be prepared to take advantage of the future 
economic opportunities that are to come.
  That is what we do better than any other country in the world. We 
have a higher capacity for change than any other country in the world. 
We have consistently seen the next trend, gotten there first, and 
benefited economically. Most recently, we have seen this in technology, 
in the Internet, in software and hardware before that. We prepare 
ourselves for the new trends in the economy, take advantage of it, and 
get out front and have a leadership role, and we need to do that again.
  As much as protectionism is not the best way to go on this, I think 
it is an equal mistake to take the approach that far too often the 
current administration has taken, which is to say that there is not a 
problem, basically outsourcing, offshoring, it is just the natural 
economic dynamic at work, creative destruction, it will all work itself 
out, we do not need to do anything. That, I think, is an equally unwise 
approach. There are policies that we need to adopt in this country to 
be prepared to deal with globalization, to deal with the economic 
changes.
  They will point to past times when it looked like our economy was 
challenged throughout the 1980s. People thought that Japan and other 
countries in Asia would take over and we would never be able to compete 
with them. That certainly did not happen as we came into the 1990s. 
With each economic change, there has been this concern that somehow we 
will not be able to compete, and we have risen above and competed. And 
that is true, but it is wrong to say that we did that effortlessly, 
that we did that without adopting policies to confront it.
  In the 1950s and 1960s, we adopted policies to deal with the space 
race that we had going on with the Soviet Union. We set up the National 
Science Foundation. We did a lot of things to encourage people to study 
and get education in the areas where we thought the jobs and the 
economy would be in the future. We built the interstate highway system. 
We passed the GI Bill to make sure that all the people coming out of 
the service could have access to education.
  We made policy decisions to deal with these changes. We did not just 
take a step back and say economics will take care of it. We adopted 
policies that made sense to move us forward. That is what we need to do 
today, and we have some specific ideas amongst the new Democrats and 
the Democratic Caucus to do that.
  First and foremost, there is nothing more important than education 
and job skills in competing in the global economy. The more skills we 
have, the more education we have, the more we will be able to compete, 
particularly for those high-end jobs that are so important in keeping 
our economy strong and giving American families the opportunities that 
they deserve.
  There is some despair out there about job training. We can see 
stories about people who were trained for jobs and then wound up being 
outsourced and they did not have access to them. But for every one of 
those stories, there are hundreds, if not thousands, of other stories 
of people who have used the advanced skills training and the advanced 
job training and education they have received to be employable, to be 
employed in many cases in better jobs than they had before.
  That is why I and a number of other folks have introduced a bill on 
trade adjustment assistance to the number of people who are eligible 
for those benefits because we believe that trade adjustment assistance 
works. It would work a lot better if we fully funded it so everybody 
eligible for those benefits got all the benefits, but it works when it 
is used, and we need to use it more, not less. So our Trade Adjustment 
Assistance Bill would expand the number of people covered to include 
service sector workers who now increasingly face the same sort of 
competition that manufacturing sector workers have faced.

[[Page 5536]]

  We also expand the bill to expand the number of countries to which, 
if they lose their job, they are eligible for these benefits. 
Currently, it is restricted to very few countries that we have specific 
trade agreements with. We have lost many jobs to countries that do not 
fall into that category. We need to retrain those workers as well. We 
need to make that investment.
  But when we look at the education and jobs skills issue, it is not 
just about retraining. It is also about basic education. We hear a lot 
of scary economic statistics out there, but for me the scariest 
statistic right now has to do with education and specifically with 
education in the area of math, science, and engineering. Those are the 
degrees and skills that are going to most create jobs in the future, 
that are going to most take advantage of the trends in everywhere from 
biomedical sciences to energy to the new ideas. It is math, science, 
and engineering that will grow our economy.
  Right now, in China, 70 percent of all undergraduates get degrees in 
math, science, or engineering. That is what the Chinese are doing. What 
we are doing here in the U.S. is 5 percent of our undergraduates get 
degrees in math, science, and engineering; and, furthermore, the real 
number of degrees that U.S. students are receiving in those three key 
areas, math, science, and engineering, have gone down every year for 
the last decade. We are putting out fewer people with the skills that 
are desperately needed, and there are changes that we can make in our 
education system from the K-12 system forward that will help us deal 
with that and compete better. We need to set high standards. We need to 
place emphasis in the K through 12 level on math and science to get our 
students interested in it.
  Too often right now, and I have visited just about every school 
district that I represent and many of the schools, when I talk to the 
students and the teachers there, they cite the same problem. By about 
the seventh or eighth grade, someplace between the seventh and eighth 
grade and 11th or 12th, students lose interest in math and science. It 
is happening to somewhere between 50 and 75 percent of our students. We 
lose them before they even have the chance to get into a university and 
get the advanced degrees that they need in these areas. We have to 
change that, and we have to increase the emphasis in those areas.
  I am pleased to say that that is happening in a lot of States in the 
Union. Certainly in Washington State we have adopted higher standards. 
We have made math and science priorities. We have made those basic 
skills fundamental, and we are starting to see some changes. But we 
need to aggressively approach that. We need to do whatever we can to 
make sure that we get as many degrees in math, science, and engineering 
as is possible.
  But it is not just about education. There are other issues that are 
important, and certainly trade is important. I mentioned that 
protectionism is not the way to go, and I believe that. We need to open 
overseas markets, get access to those markets so that we can sell our 
goods. But that does not mean that we need to lay back and do nothing 
in the trade area. We need to make sure that our trading partners live 
by the same rules that we do.
  One of the biggest mistakes that this country has made certainly in 
the last 3 years is to not aggressively enforce the trade agreements to 
our advantage. Certainly other countries are coming after us. Europe 
sued us over our manufacturing tax credit. Now we have to totally 
change that, possibly to the detriment of U.S. companies. We have dealt 
with many different issues where other trading partners have come after 
us for what they perceive to be trade violations on us. We, on the 
other hand, stand idly by while other countries do not give us the same 
access to their markets that they have to ours.
  Most specifically, we have a huge problem with other countries, 
primarily China, stealing our products. And it is not just software and 
intellectual property like movies and books and recordings. It is 
everything. It is the basic manufactured product that some small 
businesses made where the Chinese come over, copy it, take it back, 
sell it as their own. We should issue trade actions to stop that.
  We should also aggressively go after nations that unfairly manipulate 
their currency to gain a trade advantage. That is against the WTO. We 
voted, I think correctly, to bring China into the WTO, to make them 
part of a rules-based economy. That is great. But to bring them into a 
rules-based economic system and then not make sure that they follow 
those rules is ridiculous. It is not taking advantage of what we put 
out there. We have numerous opportunities to make sure that our trading 
partners' markets are as open to our goods as ours are to theirs. We 
should be much more aggressive in enforcing that. We cannot afford to 
lay back and assume that somehow we are always going to win these 
competitions.
  The final issue I want to talk about is investing in research and 
development, basically making sure that we have the investments made 
with our companies and with our university system so that we can 
develop the next best thing first. That is what economic growth is 
really about, is being at the cutting edge of new inventions, and that 
is all about investments in research.
  One issue of particular concern, when we look at economic growth, a 
lot of people will tell us that health sciences, biotech, biomedical, 
that is where the future is. When we look at what is going on with the 
human genome, with DNA, with a variety of different issues, with the 
development of pharmaceuticals, there is massive potential for growth 
in these areas. We have several advantages in being the leader on that.
  But one of the ones that we are giving away right now is in the area 
of stem cell research. It is a critical factor in developing in the 
area of health sciences. We have limited the funding for stem cell 
research in the United States, and a lot of those projects have gone to 
other countries. They are getting ahead of us in that technology.
  In numerous other technology issues we have the ability to change our 
policy to make sure that we are making the investments in research and 
new technology to be the leaders. We need to make sure that we do that 
and move forward.
  Overall, there is no question in my mind that the United States of 
America can figure out a way to create long-term economic growth so 
that we can compete in a global economy and create the kinds of jobs 
that we want. But we cannot sit idly by and pretend that that is just 
going to happen naturally. We have to make smart policy choices to help 
the workers, to help the people of our country in their efforts to 
compete in an increasingly challenging world. We can do it, no doubt 
about that whatsoever, but not if we are not smart as public policy 
makers about helping our workers in their ability to compete and create 
a strong, long-term, sustainable economic growth in this country.
  I am pleased to be joined by one of my colleagues who has been 
working with me and others on this issue, very knowledgeable in 
economic policy issues. I yield to the gentleman from Florida (Mr. 
Davis).
  Mr. DAVIS of Florida. Mr. Speaker, I thank the gentleman for yielding 
to me.
  Let me elaborate on some of the points that the gentleman has raised 
about the outsourcing issue that we are experiencing throughout the 
country, in Washington State and my home State of Florida. Forrester 
Research, Inc., has predicted that American employers will move over 
3.3 million white collar service jobs amounting to about $136 billion 
in wages overseas over the next 15 years.

                              {time}  2130

  There are clearly sectors of our economy that are among the most 
vulnerable. About 14 million jobs, or 11 percent of the U.S. total that 
have been identified at risk, are jobs that involve telephone call 
centers, computer operator, data entry operators, business and 
financial support, parallel and legal assistants, diagnostic support 
services, and finally, accounting, bookkeeping and payroll.

[[Page 5537]]

  This is a phenomenon which we are experiencing right now throughout 
the country, Democrats, Republicans, Independents. There is no nobody 
who will escape this. The question is, how will we deal with it? We 
have to be honest. We cannot bring a lot of these jobs back. We can 
offer the Trade Adjustment Act, which the gentleman from Washington 
(Mr. Smith) has introduced with a growing number of Members of 
Congress, Democrats and hopefully Republicans, that will provide 
support for people who are displaced by trade or outsourcing. But what 
we really need to do, as was mentioned earlier, is try to get to this 
problem at the source.
  We cannot promise anybody that having the highest level of education 
will guarantee them that they will not be competing against somebody 
from another country, but what we can guarantee to them is the best 
fighting chance they have of protecting themselves and their family.
  We will be debating, hopefully, in this Congress changes in the tax 
law that assure that the United States taxpayer is not subsidizing 
companies to go overseas and to compete against the domestic workforce. 
But at the end of the day, our best weapon is the American worker and 
his or her job skills and work ethic.
  One of the areas that we should be emphasizing as a Congress to deal 
with the problem of encouraging more students to enter math and science 
and engineering, as was mentioned earlier, is to attract more teachers 
into those fields.
  There are ideas that abound in congressional districts and 
communities around the country, and it is the job of Congress and 
Washington to provide the funds to the community colleges, to the 
school districts, to the private sector, the not-for-profit sector that 
will come together for the good of the communities and attract people 
into the teaching profession and create the kinds of programs that will 
work in individual communities.
  In every community in this country, there is an enormous amount of 
graduate school education that is occurring in these fields, math, 
science and engineering; yet the painful fact is that the vast majority 
of students that are entering these programs now are students who are 
entering here from other countries and helping us build bridges with 
those countries that are important; but ultimately many of these 
students are choosing to return to their homes and to benefit their own 
economies. We need to be getting more of our students into these 
graduate courses to become professors, to become inventors, to become 
some of the best forward-thinking engineers for the next generation of 
this country.
  Ultimately, what we also need to focus on is a way for Congress, 
Democrats and Republicans, to write a tax credit that will provide an 
incentive to employers to invest in their workers. Not just to meet the 
needs of the employer, but to provide a lifetime of learning, to 
provide trainability for a worker, so that as more competition is 
experienced from other countries, that worker is able to adapt through 
additional training, whether they are doing it on their own or going 
back to a college, university, community college or vocational 
training, so, again, our workers have a fighting chance, they have the 
tools they need and the ability they need to sharpen those tools, to 
broaden their job skills, to compete in this increasingly global 
economy.
  This is a time where Democrats and Republicans in Congress should be 
coming together trying to find solutions in education and job training 
to help our workers face this onslaught of competition from overseas. 
The agenda from the President and from this Congress so far has been to 
simply provide tax cuts that have gone to the most affluent Americans 
in this country.
  It is time for us to acknowledge as competition heats up in the 
global economy that is not a solution for most of the people in this 
country who want to work, who want to succeed, who are prepared to go 
back to school, who are prepared to do some additional job training, 
but want us to support them, to help them do that.
  So I hope that there will be other Members that will come to the 
floor here in the days ahead and join us in trying to identify how we 
write a bill that provides a constructive, positive agenda with 
confidence in the work ethic and the skills of the American worker, to 
help us ultimately succeed, as we have done throughout the history of 
this country.
  Mr. SMITH of Washington. I thank the gentleman.
  I want to follow up with a couple of the tax policy points. As I 
mentioned, job training and worker skills, the best way to do that is 
obviously to have the companies train their workers, because companies 
know what specific skills they need. Increasingly, in having job 
skills, it is not just a matter of knowing a certain computer 
programming skill or a certain scientific skill. It is knowing what a 
specific company needs, and the only way to do that is to get training 
from the companies, or I should say the best way to do that.
  So tax credits that encourage companies to give training to their 
workers so that they can improve those skills and stay employable in 
those companies is an excellent idea, and also just overall developing 
the Tax Code to make sure it encourages businesses to create jobs here 
domestically.
  We have a situation now in the Tax Code where if you have a plan, let 
us take a call center as an example, that is one of the ones that has 
been off-shored, and you are here domestically in the U.S. employing 
workers and making profits on that call center, you pay taxes on it.
  Now, if you take those same workers and move them overseas, even if 
they are still servicing U.S. consumers, U.S. customers, all of a 
sudden they do not pay taxes anymore in the U.S. on that. There is a 
proposal by Senator John Kerry to change that, to make sure that if you 
are performing services here in the U.S., you continue to perform them 
for U.S. customers in a different country, you still have to pay taxes 
on that. That would discourage or take away one of the incentives the 
companies have to move jobs overseas.
  The second idea within that area that Senator Kerry has introduced, 
which is a positive incentive, would be to allow companies that have 
subsidiaries overseas and subsidiaries that serve overseas markets, not 
U.S. markets, whether it is in China, India, Vietnam or wherever, if 
they are doing that and making profits over there, right now if they 
want to bring those profits back to the U.S. from their subsidiaries, 
they have to pay taxes on them. If they leave them overseas, they do 
not.
  It makes sense to reduce that tax rate to give them an incentive to 
bring the money back and invest here in the U.S., and that is another 
tax idea that Senator Kerry has supported. I think it is a pretty good 
contrast with the general approach of the Bush administration, which is 
just give tax cuts to the people who make a lot of money and hope that 
they invest that money here. We know there is no guarantee of that. 
They can invest that money any place they want to, and increasingly 
they are investing it overseas. So our tax policy needs to be smart to 
help grow jobs here domestically.
  I want to now turn it over to the gentleman from Michigan (Mr. 
Stupak), another of my colleagues who has worked extensively on this 
issue and understands the importance of job creation.
  Mr. STUPAK. Mr. Speaker, I thank the gentleman for yielding. I am 
pleased to join the gentleman from Washington (Mr. Smith) and the 
gentleman from Florida (Mr. Davis) in just talking a little bit about 
jobs and what needs to be done.
  Those of us who have worked in many different aspects within the 
Democratic Party, we like to see different things done. It is not just 
simply a free trade issue, or it is not just a tax issue. It is a 
combination of things that are hurting this economy and hurting our 
States and the people we represent.
  I come from the State of Michigan. We have already lost many, many 
jobs in Michigan, about 128,900 manufacturing jobs. Michigan is known 
as a manufacturing State because of the auto industry. But we have a 
total job

[[Page 5538]]

loss of about 336,000 jobs, 128,000 in manufacturing alone.
  Michigan continues to struggle. We need some help from the Federal 
Government; and we have to take a look at our fair trade agreements, as 
we call them. We also have to take a look at the tax structure in this 
country and what incentives are there to keep jobs staying here in this 
country.
  Michigan, in the last few years, we have offered close to $1 billion 
to try to retain corporations and jobs in my home State of Michigan. 
Nationwide, we have lost 2.8 million manufacturing jobs. Some analysts, 
as I believe the gentleman pointed out, believe we may lose as many as 
14 million jobs in the U.S., or be at risk of going overseas.
  To stop that hemorrhaging of job loss in this country, for whatever 
reason, the Committee on Ways and Means really should report out the 
Job Protection Act of 2004, also known as H.R. 3827, a bill with really 
strong bipartisan support.
  Whether you are a Democrat or a Republican, we are seeing these 
manufacturing jobs leaving this country, so we have put together a 
bipartisan bill. There are 182 Members who have signed on to a 
discharge petition. If the chairman of the Committee on Ways and Means 
does not allow the bill to come before the House for a vote, the only 
way we can change that is to have 218 Members sign a discharge 
petition. We have 182 signatures right now.
  We would like to see the Job Protection Act of 2004, a strong 
bipartisan bill, come before the floor. This bill would amend our tax 
laws to comply with the recent World Trade Organization rulings on the 
Foreign Sales Corporation benefit.
  The Foreign Sales Corporation, that is a tax break for those 
corporations who sell their product overseas. When they come back to 
this country, it is not taxed. The World Trade Organization has said 
that is an unfair subsidy and should cease and desist. So we take care 
of that situation with the Foreign Sales Corporation, plus there are 
other tax benefits in there that do not encourage jobs to leave our 
shore, but actually keep them here in the United States.
  It would revitalize our manufacturing base by lowering tax rates on 
all domestic producers, including small businesses and farms, by 3.5 
percent. So as long as we keep it in the United States, keep them 
producing jobs here, we can lower some of that tax rate by 3.5 percent.
  The proposal is fully paid for. We have enough deficits. We do not 
want to add to the deficit. We pay for this proposal, and it would not 
increase the deficit. We need to pass this bill, as millions and 
millions of Americans are relying upon it. Again, it is H.R. 3827, 
strong bipartisan support. We would like to see the bill moved.
  The gentleman from Washington (Mr. Smith) mentioned Senator Kerry. He 
has been on this issue. In fact this past weekend, Friday and Saturday, 
he was in my home State of Michigan. He has put forth a proposal to 
create jobs and stop the shipping of our jobs overseas.
  He basically said, why do we continue to give tax rates to 
individuals and big multinational corporations in hopes they will 
create jobs? Why do we not give the tax break after you create the job? 
Produce and show results of a job, and we can then look at a tax break 
for your training, for your research, to put those people to work, give 
you back something for putting them back to work.
  We spent a lot of time on manufacturing. Why is that so important? 
Recent studies have shown that a manufacturing job in this country pays 
on an average $44,000 a year. Now, service industry jobs, which we hear 
a lot about, it is a good profession, but, unfortunately, they are only 
paying about $24,000 a year for a job. Then, of course, you have the 
retail industry, that pays about $19,000.
  So what happens to these people after they lose their manufacturing 
job at about $44,000 a year? Well, there is service industry at about 
$23,000, or $24,000, and then there is the retail industry at about 
$19,000. How do you ever make up for that lost income?
  So Senator Kerry's plan addresses the problem in the tax system and 
makes sure we do not reward those companies that ship jobs overseas.
  You take the Maytag Corporation. I was in Illinois about 2 years ago. 
Their profits were up 24 percent. Their profits for the year were $360 
million. That is their profit after paying everything. But still 
Maytag, which made refrigeration units for refrigerators and freezers, 
still thought it was so important to go to Mexico, where you pay about 
$1.50 an hour; and our Tax Code, which Senator Kerry wants to change, 
would actually pay them $30 million in tax credits if they shipped or 
moved to Mexico.
  So, first of all, their profits are $360 million; they were up 24 
percent from the previous year. It is not that they were hurting. But 
still they felt it necessary to move out of Illinois, probably paying 
$15 or $18 an hour, to Mexico, where they are paying about $1.50, and 
then our government is going to give them another $30 million tax break 
on top of that. That is just plain wrong.
  So Senator Kerry's plan would end these tax breaks that allow these 
companies to keep their earnings overseas and avoid paying U.S. taxes.
  The indefinite deferral of paying taxes amounts to the U.S. taxpayer 
of about $8 billion a year to these companies investing abroad. That is 
according to the conservative American Enterprise Institute.
  So think about it. We are using taxpayer money and giving them $8 
billion to invest overseas, plus we are left with people who lost good-
paying jobs with no recourse where to go with it. So the taxpayers are 
paying for them to go invest overseas, plus we have to take care of the 
unemployed workers.
  The tax system has ability in incentive to ship jobs overseas. That 
has to change. We need to help out manufacturers and small business. 
Unfortunately, we have just seen the President's budget. We had debate 
on it last week.
  The Manufacturing Extension Partnership Program, which has been used 
greatly in my district for Horner Flooring up in Dollar Bay, or 
Jacquart Fabric Products over at Ironwood, Michigan, that was cut by 
two-thirds. It went from $111 million to $39 million. That has helped 
our people to take care of jobs and try to ship their product overseas. 
Unfortunately, that program has been cut.
  So I think the administration just has it backwards. We have to do 
something differently. It is not just the free trade agreements; it is 
the tax incentives built into our Tax Code.
  It is also what we call HELP. The State of Michigan has been 
devastated, as we mentioned, about manufacturing, so we actually put 
together a program called HELP, which we sent to the Secretary of 
Commerce, Secretary Evans, and said, look at this proposal.
  It is a lengthy proposal, but HELP really means, first, let us 
address health care needs. Every American should have the right to have 
health care. You take Ironwood Plastics, a small company up in my 
district. They were going to expand their plant, but they found their 
health care costs went up so much in the last 2 years, they cannot add 
on their plant. In fact, for every product they produce, 42 cents of it 
is just for fringe benefits; and they do not have lucrative fringe 
benefits. Health care is probably 60 to 70 percent of that 42 cents on 
every piece they make. It is just to pay for the health care in this 
country. We have to get a handle on health care prescription drug 
costs.

                              {time}  2145

  That is the first part of ``H'' in HELP.
  Unemployment compensation. Why is it that past years when we have had 
these downturns in the economy, in my state of Michigan we are at 6.6 
unemployment, some parts of my district fall over 12 percent 
unemployment. Federal Government works the area with the States. The 
States have a program. We do 26 weeks of unemployment, but we have 
always extended it another 13 weeks. Unfortunately, we have not done 
that.
  While people are unemployed through no fault of their own, we should 
be there to help them out to see them through those rough spots and 
keep

[[Page 5539]]

them working and keep their health care going.
  Level playing field. The third letter in HELP. ``L'' for level 
playing field. On these trade barriers, I am always amazed that we see 
these trade agreements, take the CAFTA plan, which is the Central 
America Free Trade Agreement, which will devastate the sugar industry 
in my State of Michigan, which is a half billion dollar industry, if 
Central America is allowed to bring their sugar into this country. They 
all do now. But if one takes down all barriers and it can freely flow 
into this country, it will wipe out the sugar beet industry in 
Michigan.
  The sad part about that is, while we immediately lower our barriers 
in this country, it takes about 15 years for other countries to lower 
their barriers. Plus they put up these artificial trade barriers 
depending on the value of their currency, the environmental standards, 
their employment standards of their workers. Why can't we have a level 
playing field?
  If it is truly going to be a global economy, and I was here back in 
1993 through the NAFTA debates, which I did not support NAFTA because I 
felt it would hurt this country overall. But when you take a look at 
it, in NAFTA and all the rest of it, if we are going to have a global 
economy, and that was the buzzword back in 1993, some 11, 12 years ago, 
then should not we really have global standards on workers' rights, on 
the environment, how we treat each other's currency so you do not have 
these artificial trade barriers for our products from the U.S. going to 
these other countries? So that is the third letter in our help program.
  Last but not least, P for pensions. In this country we are funding 
pensions. Many people feel we are overfunding them. Some are 
underfunded. But we have to look at pension reform. There has been a 
bill that we tried to pass out of the House. It has been stuck in the 
Senate. We can do some work here and make this pension system fair to 
the workers, guarantee the benefit, but at the same time allow the 
companies to use it for research and development. That would free up 
some money so they can do their research, development, and investment 
in their countries. It just makes sense.
  Training. We have to invest in this country. So there are so many 
needs, and one can just see what happens and in State after State, 
whether it is Washington, Florida, or Michigan.
  Just one more: Electrolux, which was really a sort of French company 
that had been in Michigan for many, many years, besides making great 
vacuum cleaners, they also did refrigeration. They just announced it is 
closing its doors and going to Mexico also. It will cost Michigan 2,700 
jobs.
  We are losing about 2,000 jobs in Michigan just in the manufacturing 
section. Our governor, who is very concerned about it, has put together 
an aggressive manufacturing agenda to try to help companies. Our 
governor even offered Electrolux a new $30 million building, $182 
million in tax credit, including a Renaissance Zone that would allow 
the company to operate virtually free of State and local taxes for up 
to 20 years.
  There was even changes from the United Auto Workers that they said, 
look, we do not want to lose these jobs. It is good-paying jobs. We 
will change our labor agreement. We will give about $31 million in 
concessions. But still the company still saw it lucrative to go to 
Mexico with the tax breaks they would get from the U.S. taxpayers and 
the low-wage-paying jobs in Mexico.
  Electrolux was a very profitable company. It pays $13 to $15 an hour 
plus benefits, and that included health care to its employees. So why 
are they moving? Because they can go down to Mexico and pay people 
$1.57 an hour.
  Like I said, Michigan has lost about 128,900 manufacturing jobs since 
January of 2001. We have a total job loss in our State of 335,868 in 
Michigan, despite offering almost $1 billion in tax incentives for 
companies to stay.
  So I am pleased to join with the gentleman from Washington (Mr. 
Smith) tonight. I think my colleague said it best earlier when he said 
it is not just trade agreements, there are tax issues, there are 
employment issues, there are a number of issues we should tackle as a 
Congress.
  I will go back and just repeat that. The Job Protection Act of 2004, 
H.R. 3827, a bipartisan bill. We have 182 Members who signed a 
discharge petition. I wish the majority in this Congress would allow to 
us bring that bill to the floor. If the majority party, the Republican 
party, want to vote against it, that is certainly their right. But at 
this critical time in our Nation's history, manufacturing jobs leaving, 
why cannot we have a good debate on the issue?
  Maybe this tax break is not quite right. I am not saying we have all 
the answers, but let us at least get a debate going. Let us exchange 
ideas. Because we have to look at trade agreements, Tax Code, and other 
incentives we have out there that encourage people to leave offshore or 
go offshore with their corporations.
  So I stand with Senator Kerry and my colleagues tonight and we look 
forward to a day when we invest in companies for keeping jobs here in 
the United States and not shipping them overseas, providing health care 
for all our workers so it is not such a burden on just strictly the 
employer, and reexamine these trade laws and make sure we all play by 
the same rules.
  America can compete with anybody anywhere in this world. We are just 
looking for a level, fair, playing surface on trade agreements.
  I thank the gentleman from Washington (Mr. Smith) for once again 
yielding. I thank him again for stepping forth and organizing this 
special order tonight. It is always a pleasure to join with the 
gentleman and look forward to working with him on this and other issues 
in the future.
  Mr. SMITH of Washington. Mr. Speaker, I want to thank the gentleman 
from Michigan (Mr. Stupak) for his remarks, and I do agree, as I said, 
that we need to be more aggressive about enforcing our trade 
agreements.
  I will point out I am actually fairly familiar with the CAFTA trade 
agreement, and it does not have the affect on sugar you describe. It 
raises the quotas for sugar from Central America by less than 5 percent 
over what they currently are and it is, in fact, spread out over 15 
years.
  So if my colleague looks at the details of CAFTA, sugar, corn, a 
variety of different issues, it is a pretty level playing field on both 
of those. It does not dramatically increase the quotas on sugar coming 
from Central America.
  So I would urge my colleague to take a closer look at that and assure 
your folks in the Michigan sugar beet industry that they are going to 
be just fine with regard to that particular agreement.
  Mr. STUPAK. Mr. Speaker, if the gentleman would yield on that one. 
Our sugar producers and the Michigan Farm Bureau have come out against 
it because we do not have that big of a sugar industry. It is only a 
$500 million industry. But they feel with it coming in, and my 
colleague is right, over 15 years, the barriers would fall down. That 
would just about do the end of our sugar in Michigan.
  Mr. SMITH of Washington. Mr. Speaker, that cannot possibly be true. I 
would be happy to take a look at it, but it is not just over 15 years. 
At the end of 15 years the quotas are still there. They are just 
slightly larger than they are now. It does not even get rid of them.
  So sugar was very important to me, and I was actually in 
conversations with Ambassador Zellick and others while they were 
negotiating that.
  Mr. STUPAK. Mr. Speaker, I hope my colleague is right on that issue 
because we are concerned about it in Michigan. We look forward to my 
colleague's leadership on that issue to make sure we preserve our sugar 
industry in Michigan.
  Mr. SMITH of Washington. Mr. Speaker, absolutely. We have a sugar 
industry throughout the U.S.
  Mr. Speaker, I want to now yield to my colleague from my State, our 
State, I should say, the gentleman from the great State of Washington 
(Mr. Inslee) from the first district who is the cosponsor with me on 
the TAA

[[Page 5540]]

bill to expand trade adjustment assistance for service sector employees 
and expand it in other areas as well.
  Mr. INSLEE. Mr. Speaker, I thank my colleague for yielding.
  I want to make a couple points before I address the specifics of this 
trade adjustment which I really think is great, not a panacea but 
certainly one of the things we need to do that address this problem. 
But I want to make two points about why legislation like this is 
necessary right now, and that is that two I think interesting facts 
that demonstrate why Congress needs to act now and the administration 
needs to follow us in doing so.
  That is the unemployment, the job loss that we have suffered in the 
last 3 years is actually understated. A lot of folks have heard now a 
familiar number that we have lost about 2.2 million jobs in the last 3 
years which is a greater job loss than any other time since Herbert 
Hoover was President of the United States. But that number is really 
kind of a fake number, and the reason is that it fails to take into 
account the jobs that should have been created under any sort of normal 
rate of economic growth. The truth is we have lost specifically about 
2.2 million jobs, but if we had just grown jobs to keep pace with the 
rate of population increase, we would have actually grown four and a 
half million jobs if we had only kept pace with the population increase 
in the United States in the last 3 years.
  So it is not that we have lost 2.2 million jobs, sort of behind the 
curve by 2.2 million Americans that are out of work. It is actually 
closer to 7 million. So the job deficit, along with the largest Federal 
deficit in American history, we now have the largest job deficit in the 
last 50 years.
  Mr. SMITH of Washington. Mr. Speaker, if the gentleman would yield, 
because that is a point I found interesting. When the President has 
proposed his tax cuts, for 3 years he has talked about the number of 
jobs he is going to create. The figure that he used for the tax cut 
that was passed was 1.2 million. He has fallen way short of at this 
point, I think it is about 400,000. But in making that proposal it is 
interesting that he assumes that, absent that tax cut, no jobs would be 
created, which flies in the face of history. Obviously, some jobs were 
going to be created.
  As the gentleman points out, after we did this supply side tax cut 
for people at the high end of the scale, we actually created less jobs 
than economists tell us we would have created if we had done nothing. 
So it is worse than just not doing what he said it was going to do. It 
seems to be having a negative impact.
  Mr. INSLEE. Mr. Speaker, that is another way of basically saying we 
have had no meaningful job creation for the last 3 years. So we have a 
$7 million job deficit and we basically had an experiment and that 
experiment failed. The President basically said these very large tax 
cuts for the wealthiest among us, those who are over $200,000 a year, 
we are going to create millions of jobs. It failed even to keep pace 
with just population growth.
  There is four and a half million jobs missing that should have been 
there just to keep pace with population growth, and then there are 2.2 
million jobs lost on top of that. So we are in a deep, deep hole; and 
whatever we are going to say, if we add one job now, we are still at 
the bottom of the well. So maybe we are one inch off the bottom of a 7 
million foot well, if you will. We have got a long ways to go.
  Second point is the reason Congress needs to act now is that these 
figures belie the severity in the length of this unemployment. Because 
we have over 2 million people who are unemployed tonight who have been 
unemployed for more than 6 months. That is the longest period and the 
largest number of people who have been unemployed over 6 months for 
over 50 years in America.
  So not only are people not even counted in the unemployment insurance 
statistics because they have given up looking for work, those who are 
still on there we have the longest period of long-term unemployment in 
the last 50 years.
  So I just want to point out those two points that we need to take 
into consideration whether we are going to act or not boldly and 
aggressively. And we think we should.
  So one of the ideas, and this is not the only idea that we need to 
pursue, but we need to bring our trade adjustment assistance for 
Members up to speed with what is going on in the U.S. economy. We, and 
I am sure the gentleman has talked about this, have had a program to 
help people who have lost jobs that are associated with the dynamics of 
trade in manufacturing now for some period of time.
  We have seen in Seattle a great success with that program. We have 
seen hundreds of folks, if not thousands, in Boeing who several years 
ago during the downturn availed themselves of the benefit of this 
program to get retraining. I have talked to any number of those. It is 
not 100 percent, but any number of these folks have been successful in 
finding other careers with retraining.
  But now we have this phenomenon in the service sector, computer 
programming, accounting, in radiological services, in call centers. Now 
the service sector employees are experiencing the dynamics of trade. We 
simply have to bring this up to speed to this century's challenges that 
exist.
  Our bill will do that. It will simply say that people in the service 
sector who lose jobs associated with the dynamics of trade are going to 
have an assistance from Uncle Sam. It is a pretty simple commitment 
that Uncle Sam ought to fulfill. We hope that the administration will 
embrace this idea.
  And I will share one piece of good news. I serve on the President's 
Export Council, which is a group appointed essentially to advise the 
executive branch on export policies and trade policies.

                              {time}  2200

  It is a group of a lot of high-level executives of major corporations 
at General Motors, Intel, Boeing, a couple of Members of Congress; and 
last week, we met and this group sort of unanimously concluded that 
this idea of the extension of trade adjustment authority to service 
personnel should be pursued, and that will go to the President as a 
formal recommendation of this group here in the near future.
  So we are hopeful that the administration and our Republican 
colleagues will join us in this very commonsense measure to help 
Americans get back on their feet, and we do not want to hear that we 
cannot do this for fiscal reasons, for two reasons; and there is a 
fiscal impact for this obviously, and we should be totally responsible 
in addressing that fiscal impact, but we believe that in the long term 
this is fiscally responsible to do because these folks are going to get 
back to work, they are going to get off the unemployment rolls, and 
they are going to start creating wealth and profits and wages and taxes 
themselves. This is a fiscally responsible thing to do, is we get 
people back to work. Over the long term it does not create the deficit; 
it helps to ameliorate it.
  In addition, we think there are some future tax cuts for those 
earning over $200,000, which on a scale is not as important as the fact 
as getting these thousands of people who may have lost these jobs to 
folks in other countries due to trade. They have a higher claim on 
America's assistance right now, and they will be much more productive 
for the U.S. economy as well, and so we think this is a fiscally 
responsible approach; and we hope our Republican colleagues will join 
us.
  There is one other thing that this bill will do. You may have talked 
about this already, but I want to allude to it. There are some 
imperfections in the existing trade adjustment bill, one of which would 
not kick in assistance for Americans except that they lost their job, 
at least the presumption is a country that we already had free trade 
agreement with. That is an artifact of history that we had to cure 
because if you are out of work, frankly it does not make a difference 
to your creditors whether you are out of work, losing a job to someone 
Uncle Sam has a free trade agreement with or not. So we hope to fix 
that in the long term.

[[Page 5541]]

  The bottom line is, as the trade world has changed, as the economy 
has changed, Congress needs to change our provision for Americans to 
get retrained; and this is a fundamentally sound, fair, fiscal way to 
do it, and we are hoping that ultimately this becomes a bipartisan 
effort.
  Unfortunately, we have not had our colleagues across the aisle coming 
in droves to join this, and that frankly is disappointing because 
anyone ought to understand when you are out of work and your job's been 
shipped to another country, and your mortgage still needs paying and 
your child's college education tuition still needs paying, it should 
not be a Republican or Democrat position the fact that we ought to help 
you get retrained, and we ought to recognize for those of us who 
recognize the value of trade, and I count myself among those who come 
from a very trade-dependent part of the world. The State of Washington 
is one of the trade-dependent parts of the country. We recognize the 
value of trade, selling Boeing planes to India, selling Microsoft 
software to China. We understand the value of trade, but those who care 
about trade have to recognize that there are dynamics of trade and 
people are discomfited and there are job losses associated with trade, 
and we need to create a lifetime learning situation where, as trade 
creates dynamic changes in the job market, we need to guarantee 
Americans the ability to get back on their feet and become retrained, 
and that is one part of that support system that I hope that we will 
pass.
  Mr. SMITH of Washington. I thank the gentleman for his help on this 
issue. You worked very closely on it, and I thank you for your 
leadership
  I want to close off the debate, and we do not have anymore speakers 
for our hour, which is almost up, by emphasizing the point the 
gentleman from Washington (Mr. Inslee) made about the cost and some of 
the choices involved. It is interesting, business leaders throughout 
this country have come together and agreed with a lot of the items we 
have talked about tonight, agreed with the importance of education, the 
importance of job training, the importance of investment in research 
and development, the importance of another item we have not talked 
about, which is an investment in infrastructure, a building of roads 
and improving our energy system so that we can have a sustainable 
strong economy; and they know we need to do those things, and they 
consistently advocate for them and I appreciate that support.
  But it is also tied into the issue of how do we pay for these things, 
and as the gentleman from Washington (Mr. Inslee) pointed out, the tax 
cut choice. We have heard a lot already in this campaign about taxes 
and tax cuts; and the general approach of the President and his party 
is that, look, any tax cut there is has to be lower, anyone who is for 
higher taxes is by definition not worth being elected, but we have to 
take a step back and look at this in terms of choices, and take a look 
at those issues that I just talked about, the business leaders and many 
Republicans say they support, funding for education, funding for job 
training, funding for infrastructure.
  There is the little problem of paying for these things, and we have 
to look at the choice that is being presented. The President wants to 
make his tax cut permanent, all of his tax cut, including the portion 
of that tax cut which is a pretty substantial portion of it that goes 
to people making over $200,000 a year, also the portions of the tax cut 
that go to people who are paid dividends; and, yes, I know average 
Americans earn some dividends, too. If you look at the percentage of 
where dividend income goes, it goes almost entirely, 75 to 80 to 90 
percent, to people again making a great deal of money; and I understand 
the philosophy behind that, give these people money, they will invest 
and everything will be fine.
  It has not quite worked over the course of the last 3 years at this 
point, but more importantly it is a matter of choices. If the business 
community, other folks out there, want us to make that investment in 
education, job training and research and infrastructure, there has got 
to be some money left somewhere to do that; and when we are sitting 
here with an over-$400 billion deficit due this year to pile on top of 
a $7 trillion debt, to say that we are going to make the tax cuts 
permanent at the cost of somewhere around 2 to $3 trillion, over the 
course of the 10-year period, and still make these investments in our 
workers, an investment in our economy, it does not add up.
  It is a matter of choices, what is the best investment of that money. 
Is it really best to make sure that the top tax rate for people who 
make, it is about $250,000 before you hit that top tax rate, goes down 
from 39 to 35 percent? It goes down to 4, I guess, critical percentage 
points. Or is it best to take some of that money to get us back towards 
fiscal responsibility and to get us back towards making an investment 
in our workers that they can fairly compete? Looked at in that context, 
I think it is a pretty obvious choice; and I hope that we will make 
those choices.
  We absolutely need tax cuts. Senator Kerry supports a number of tax 
cuts targeted to the middle class, the child tax credit, elimination of 
the marriage tax penalty, a number of different issues; but, 
absolutely, we have got to give those tax cuts to hardworking 
Americans.
  When you look at the total package of tax cuts, these are some 
choices we can make to better invest in our workers and better invest 
in our country. We hope that we can make those choices so that we can 
deal with the challenges we face from outsourcing, from offshore, so 
that American workers can have that level playing field, can have that 
opportunity to grow our economy and to benefit from that growth.
  I thank you very much for the time.

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