[Congressional Record (Bound Edition), Volume 150 (2004), Part 5]
[Senate]
[Pages 6861-6863]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   INSOURCING AND OUTSOURCING OF JOBS

  Mr. FRIST. Mr. President, I will take another few moments to talk on 
a separate issue that centers on a topic that has been the subject of a 
lot of debate and a lot of discussion on the Senate floor and 
elsewhere. It is the overall topic, the phenomenon of outsourcing. 
Critics contend that a company's effort to deliver a product or service 
more cheaply and efficiently to the American consumer is hurting our 
economy and hurting America's workers. Indeed, this has become fodder 
for sound bites that I think are not justified and thus want to take a 
few moments to talk more broadly about what outsourcing is and what it 
is not.
  I should begin by starting with the flip side of outsourcing and that 
is insourcing. What is ``insourcing''? What is this phenomenon of 
insourcing? Well, it has been a company such as Nissan opens a plant in 
the United States and thereby creates high-paying jobs for American 
workers to the benefit of those American workers. In fact, that is the 
very thing that happened in Tennessee when, in 1980, Nissan opened its 
first plant in Smyrna. In the 1970s, Tennessee, like the rest of the 
country, was struggling with high unemployment several times the 
current rate of 5.6 percent. Then Nissan opened a manufacturing plant 
in Rutherford County and Rutherford County then went into high gear.
  A few years later, Saturn announced it was opening a plant, and today 
middle Tennessee is home to three major automobile factories. Nissan 
today employs roughly 7,400 workers and in the year 2000 paid out $27.7 
million a month in payroll. That is insourcing.
  Mark Herbison of the county's chamber of commerce says with 
understandable home pride:

       We continue to see our existing companies grow and expand. 
     That is because of our quality of workforce here. If you look 
     at the Nissan plant, in 9 out of the last 10 years, they've 
     been ranked the most productive automotive plant in North 
     America.

  Because of increased demand for Nissan cars, the company has spent $1 
billion to expand its Smyrna and Decherd plants. Production in Smyrna 
was up 40 percent in February. Moreover, Nissan's success has extended 
by spurring growth of a number of companies that in turn supply the 
plant. There are now more than 900 suppliers providing 140,000 jobs in 
the State.
  The Nashville Business Journal reports that based on its success in 
manufacturing, Rutherford County is now branching out to attract more 
white-collar jobs.
  Nissan is just one success of how insourcing has led to job growth. 
Over 400 overseas companies have U.S. subsidiaries that are employing 
and creating jobs just in my home State of Tennessee.
  The Swedish company Electrolux, previously known as Frigidaire, has a 
Springfield operation that employs 2,900 workers. If one looks at the 
size of these companies and the range, they will see there is a broad 
spectrum. In Australia, a corrugated box company operates a small 
outpost in Humboldt; a Netherlands food preparation company has an 
office in Chattanooga that employs 175 called Bunge Foods.
  Insourcing has, indeed, brought good jobs and good wages to 
Tennessee. Over 157,000 jobs in Tennessee are the result of insourcing. 
That is the flip side of outsourcing. U.S. subsidiaries support nearly 
7 percent of Tennessee's private sector workforce.
  One might ask why do companies come to the United States of America, 
come to Tennessee, to create jobs and manufacture their products? 
Because company after company has found that insourcing is a boon to 
their bottom line. In turn, Tennessee workers get more and pay less for 
their products and the services they purchase.
  There is a second aspect to this whole discussion of world trade that 
has gotten overlooked in the debate, and that is the growth of American 
exports. Again, Tennessee has been a major beneficiary of the opening 
of foreign markets.
  In 2002, Tennessee exported more than $11.6 billion worth of goods, 
up nearly 26 percent from 1997. Tennessee exports support 232,000 local 
jobs, nearly one-tenth the State's total labor force, and over the last 
5 years the average Tennessean exporter increased sales by nearly 16 
percent, selling over $2 million in goods each year to foreign 
consumers.
  Even more notably, export-supporting jobs paid 13 to 18 percent more 
on average than nonexport jobs. Our focus should be to expand economic 
growth and promote higher wages, not to impose sanctions and 
restrictions on America's job creators.
  Listen to the words of Dyer County farmer Jim Moody. He tells a local 
Memphis paper: We've got to have exports to survive and do well.
  Farmer Moody is right, and it is not just his farm that benefits from 
increasing exports. It is every American who gets a good job, who gets 
a higher wage, and every American consumer who is thereby able to 
stretch their dollar a little bit further, sometimes a whole lot 
further.
  As we have all seen, especially recently in the last 6 months, our 
economy over the last measured 6 months is growing faster than it has 
in the last 20 years. America has a dynamic economy. It is true that as 
this economy, because of its dynamism, because of its flexibility, 
because of its ability to adapt, expands it at times has to shift 
resources, thereby resulting in dislocations. Hopefully, the 
dislocations are

[[Page 6862]]

temporary. That is why it is so important for us to focus on workforce 
development and training.
  There is no question that in these dislocations workers are hurt, 
those who are dislocated for a period of time, but our responsibility 
in Government, on the Senate floor, is to respond and support them, and 
support them with programs of retraining, education, and of allowing 
these workers to adapt to this new environment.
  Workers who are dislocated need to be trained to find a new job but 
also to work at that new job. Luckily, there are a whole range of 
public and private sector programs that are available. According to the 
Government Accounting Office, there are 44 federally funded programs 
today that provide employment and training services. In 2002, Congress 
spent more than $12 billion on employment and training activities, 
aiding 30 million Americans with a whole range of services such as job 
search assistance, employment counseling, basic adult literacy, 
vocational training. The list goes on.
  The Trade Adjustment Assistance Act was expanded in 2002 to provide 
even more generous assistance for workers who lose their jobs because 
of import competition or because of shift of production to another 
country.
  Similarly, Congress has invested over $27 billion in training, under 
the Workforce Investment Act. That act went into effect in 2000, and it 
is over $27 billion since that point in time. Its hallmark is the one-
stop career center, and that provides job seekers with a single 
location to access a whole host of resources, including unemployment 
insurance, job market information, job training, and job search 
assistance.
  We reauthorized the bill last year with strong bipartisan support in 
this body, the Senate. But, unfortunately, the Senate Democrats have 
blocked this bill from going to conference. Again, we passed it--I 
think it was even unanimous--in the Senate, and the House has passed 
such a bill. But right now we are being blocked from going to 
conference. As a result, they are holding up a vital and much needed 
improvement to the program that spends more than $5 billion a year on 
job training and other valuable assistance.
  People say they want to help workers. But by blocking us going to 
conference on these bills, that, again, passed the House and the 
Senate, it is more just talk where we need to deliver that action. That 
is what the American people want. That is what they need. It is what 
they deserve. So again I appeal to the other side of the aisle, please 
let us go to conference on this important bill for the good of the 
American people.
  We need to help workers find good-paying jobs, to retrain them if 
they need it, to get the support they need, to get them back on their 
feet. Every American who needs a job should be able to get a job. We 
should be willing to work hard together to expand the economy and to 
tackle whatever structural problems exist that hinder job creation.
  You have seen numerous attempts on the floor of the Senate, most 
recently a couple of days ago, that are aimed at controlling things 
such as litigation, unnecessary litigation costs that do, in effect, 
cripple economies, both at the macro and the micro level. It is 
estimated that frivolous lawsuits in this country today are costing the 
economy $200 billion a year. If you assume a salary of, say, $50,000 a 
year, that is the equivalent of 4 million jobs caused by frivolous 
lawsuits--4 million jobs that could lower the unemployment rate.
  We see the effects of frivolous lawsuits most dramatically in my own 
profession. You see it across the board, and we debated it again on the 
floor yesterday, and we were unsuccessful, with a filibuster of that 
particular legislation. But we talked a lot about the issues in terms 
of the impact on people--expectant mothers, in terms of their access to 
obstetricians. We looked at it in terms of trauma units and emergency 
rooms, where specialists, high-risk specialists are simply saying they 
can't afford the malpractice insurance that is being charged to them 
and therefore are not going to take trauma anymore, and not going to 
work in emergency rooms anymore because they simply cannot afford that 
insurance. That ends up affecting the health care of all of us--all of 
us who might need that emergency room tonight or their trauma center 
tomorrow or that mom or expectant mom who needs an obstetrician.
  We find doctors who are moving. We find doctors in Pennsylvania 
moving out to California and moving down South because of medical 
liability. We find doctors leaving their local communities. We find 
doctors, in fact, even retiring from medicine.
  A recent study by a University of Nevada Medical School professor 
found that 42 percent of obstetricians are planning to move their 
practices out of southern Nevada. And if they do, Las Vegas will have 
78 obstetricians to deliver 23,000 babies each year. So how many babies 
will get medical care and how many babies will not get medical care if 
that is to occur?
  These are the real-life consequences of surreal courtroom dramas that 
take place. It is the reality of today. That is why, on this particular 
issue--although it was filibustered yesterday and was filibustered 
about 2 months ago and was filibustered back in July--we are going to 
continue to bring it back because it is reality today. It is affecting 
people's lives.
  The Senator from Delaware was just on the floor talking about the 
out-of-control asbestos lawsuits. There, once again, you see effects 
that are very similar in that they are severe and the people who most 
need help no longer are getting that help. The approximately 600,000 
claims that have been filed have already cost $54 billion in litigation 
costs, in judgments, in settlements.
  Over 70 companies so far have declared bankruptcy under the crush of 
asbestos lawsuits. It is a problem that is bad. It has gotten worse in 
recent years. In the very recent years it has even gotten worse in 
terms of the bankruptcies, in terms of the money not reaching the 
victims themselves or even the potential victims but being siphoned off 
by frivolous suits by people who may be a little less scrupulous than 
any of us would like.
  More than a third of the bankruptcies have taken place in the last 3 
years. In other words, it is getting worse and worse. These are huge 
companies: Johns Manville, Owens Corning, US Gypsum, WR Grace; over 90 
percent of American industries are in some way affected. Even companies 
that have little or no direct connection to asbestos are now being 
targeted for legal annihilation. Asbestos-related bankruptcies have 
already cost more than 60,000 jobs.
  It is a broken system. The reason we plan in the future bringing it 
to the floor--I introduced the bill with Chairman Hatch last night--is 
that we must make progress. I believe we have the responsibility to 
address this unfair system that is hurting the American people. I know 
we have the power to do it. Now we just need to show that we have the 
will.
  What started out as a quest for justice in the courts has, 
unfortunately, evolved into a wild litigation lottery, but it is 
something we can fix and I believe we will fix. I will have to say in 
the lottery today--this out-of-control lottery that has now become the 
sort of system itself--there is only one winner, and that is 
plaintiffs' trial lawyers. It is not the victim or the person who is 
potentially hurt. People who are hurt by the negligence of others 
deserve justice. But so do people who are hurt by a system that is 
driving doctors out of the practice of medicine, that is driving 
companies out of business, and driving jobs out of the economy.
  Every day we encourage America's job creators to grow and expand and 
to compete in this world market. Yet at the same time we are burdening 
them with unnecessary, and I would argue unfair, litigation practices 
that ultimately amount to a hefty tax, which makes them less 
competitive in the world marketplace.
  In the manufacturing sector we have spent so much time on the FSC/ETI 
bill and the JOBS bill, talking about them, saying we must address 
them. It is reported that excessive regulations have

[[Page 6863]]

added 22.4 percent to the cost of doing business.
  In closing, if we want American companies to be competitive, which we 
all do, if we want them to be strong, if we want them to be vital, if 
we want them to grow, if we want them to create jobs, we have an 
obligation, too, and we need to make the system fair.
  We can't ask these companies to run this great race to prosperity and 
then bind them up at the same time in miles and miles of redtape and 
unnecessary, frivolous lawsuits.
  America's entrepreneurs are smart, they are dynamic, they are 
productive, they are highly competitive. And so are America's workers. 
We need to pursue policies that allow us both to maximize their 
potential, and also their prosperity potential. We need to pursue 
policies that, indeed, keep America moving forward.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I simply want to congratulate the 
majority leader on a speech filled with a lot of common sense. I would 
like to hear more of that these days and will just take 3 or 4 minutes 
to go back over what I heard and emphasize it.
  On the first point, all the talk about jobs comes down to jobs 
training. We know in this country, and we have known it for years, that 
our economy is characterized by losing jobs and gaining jobs.
  I remember 25 years ago during my first year as Governor; I went down 
to Memphis to try to persuade the International Harvester plant not to 
close. I got my picture in the paper and pats on my back. I went back 
to Nashville. The next day they closed.
  I realized if all I was doing was going around having my picture made 
in front of plants that closed I wouldn't be much of a Governor.
  The more I study, I realize we literally will lose 6 or 7 percent of 
our jobs every year in Tennessee and in this country. The key to 
success is whether we replace them with better jobs. The key to that is 
whether we educate American men and women who are in one job to get a 
better job. That is painful. That is hard. That is not easy. But that 
is the truth.
  The President's proposal about community colleges and the workforce 
bill, which is being held up, are good antidotes to that.
  Second, on the majority leader's comments on insourcing, he is 
exactly right about that. We don't want to say: Nissan, go home from 
Smyrna, TN; Toyota, don't build that plant in San Antonio; Honda, go 
home from Ohio.
  In our State alone, as was pointed out, over the last 20 years the 
coming of the auto industry to Tennessee has raised our family income 
from 80 percent of the national average to 100 percent of the national 
average. It has been led by foreign companies. If they can't come here, 
we can't go there. This is a two-way world.
  The last thing the majority leader said is exactly right. We should 
learn our lesson in the way we are insourcing. If you go to Europe, you 
hear a lot of people talking about outsourcing there. They are 
outsourcing brains to the United States because they are coming to our 
universities. We have created an environment in which we can grow the 
best universities in the world, and we have done it. We can create the 
same environment in the United States for the best jobs in the world.
  We can do that by passing a lot of legislation that is being held up 
here by the other side: legislation to reduce the cost of energy, the 
Energy bill; legislation that would lower the corporate tax on 
manufacturing--that is the JOBS bill being held up; legislation that 
would reduce runaway lawsuits and reduce costs on business. The 
majority leader brought that up several times. Legislation that would 
solve the asbestos problem would reduce costs on business.
  By reducing costs and encouraging education, we can create the same 
sort of environment that will insource new good jobs into America just 
as we have created the best universities in the world and insourcing 
the best brains in the world that are coming to the U.S. because they 
are attracted here.
  I hope I hear more of that kind of commonsense language, not just 
from the majority leader but from more and more Senators on both sides 
of the aisle.
  I wanted to compliment him and congratulate him for his remarks.

  The PRESIDING OFFICER. The majority leader is recognized.


                  UNANIMOUS-CONSENT AGREEMENT--S. 1637

  Mr. FRIST. I ask unanimous consent that the pending first-degree 
amendment to the motion to recommit be withdrawn; I further ask 
unanimous consent that the motion to recommit be agreed to, and the 
substitute amendment then be agreed to and be considered as original 
text for the purpose of further amendment.
  I further ask unanimous consent that when the Senate returns to the 
bill Senator Harkin or his designee be recognized in order to offer his 
amendment relating to overtime.
  I further ask unanimous consent that the following list of amendments 
that I send to the desk be the only remaining first-degree amendments 
to the bill; provided further that they be subject to the second 
degrees which are to be relevant to the amendment to which they are 
offered.
  I finally ask unanimous consent that following the disposition of the 
amendments the bill be read the third time and the Senate proceed to a 
vote on passage of the bill with no intervening action or debate.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The list of the amendments is as follows:

     Alexander--pollution control
     Allen--TAA Housing
     Baucus--Managers' Amendments
     Bayh--Applying anti-subsidy laws to non-market economy
     Bingaman--Medical student matching program
     Bingaman--Outsourcing
     Breaux/Feinstein--Re-patriation
     Cantwell--UI (separate vote guarantee)
     Clinton--Privacy of information
     Coleman-Customs
     Coleman--TAA
     Collins--Manufacture jobs tax credit
     Corzine--Trade barriers
     Daschle--5 relevant or relevant to the list
     Dayton--Credit for making motion picture accessible for 
         hearing impaired
     Dorgan/Mikulski--Runaway plants/Notification
     Feingold--Buy American provisions
     Frist--5 relevant or relevant to the list
     Frist or designee--UI
     Graham (Florida)--Repeal of international title
     Graham (Florida)--Strike international manufacturing and 
         replace with job credit
     Grassley--Family Oppt. Act
     Grassley--Managers' amendments
     Harkin/Wyden--No tax deduction for outsourcing
     Harkin--Overtime
     Hollings--Strike all international provisions
     Hutchison--Architects/Engineers
     Kennedy--Multi-Employer pensions
     Kyl--Contract Manufacturing
     Kyl--Strike energy
     Landrieu--Reservists
     Lautenberg--Foreign subsidiaries doing business with 
         terrorist nations
     Levin--Advanced technology vehicle incentives
     Levin--Tax shelters
     McCain--20 relevant
     McConnell--3 relevant
     McConnell--Overtime
     Miller/Schumer--Green bonds
     Nickles--Corporate rate
     Nickles--Electricity depreciation
     Nickles/Kyl--Death tax
     Nickles--Family tax relief extension
     Reed--CARE (Senate passed bill) as modified
     Reid--3 relevant
     Santorum--CARE
     Santorum--Sec. 29 Coke
     Schumer--China
     Specter--Cotton trust fund
     Specter--Manufacture legacy costs
     Talent--Sickle Cell
     Wyden/Coleman/Rockefeller--TAA for service & health care

     

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