Today, U.S. Senator Kirsten Gillibrand (D-NY) introduced the bicameral End Outsourcing Act, legislation that would utilize the tax code and federal grants, loans and contracts to end the outsourcing of jobs overseas. The End Outsourcing Act was introduced in the House by U.S. Representative Mark Pocan (D-WI-02). As the economy recovers from the COVID-19 crisis, the End Outsourcing Act would enact a new tax benefit to help companies bring good-paying manufacturing jobs back to America and re-employ millions of Americans who have lost their jobs during the pandemic. The legislation would also require companies that have outsourced jobs within a five-year period to pay back federal tax incentives and grants from facilities closed due to outsourcing.
As part of the American Jobs Plan, President Biden supports provisions to end outsourcing and invest in domestic jobs. To help the economy recover President Biden has called for reforms to the tax code that would ensure companies can no longer benefit from tax incentives when they ship jobs overseas, provide a tax credit for companies that bring jobs back to America, and create other incentives for investment in domestic industry. Gillibrand’s End Outsourcing Act would make these reforms law.
“We have to level the playing field for New York’s workers and invest in American companies in order to rebuild our economy. The pandemic has put millions of Americans out of work and we can no longer allow manufacturing companies to cut more family-supporting jobs in favor of cheap labor and higher profits overseas,” said Senator Gillibrand. “Enacting commonsense policies that return outsourced jobs, and prevent outsourcing in the future, will provide a new path for the middle class to recover. I’m proud that my End Outsourcing Act would strengthen domestic industries, bring good paying jobs back to New York, and finally end disastrous Trump–era policies that hurt hard–working Americans.”
“For too long, we have allowed federal contracts, loans, grants and the tax code to reward companies that prioritize their own profit over the livelihoods of American workers,” said Congressman Pocan. “Congress must incentivize companies to invest in American jobs, workers, and communities. In just the first two years of the Trump administration, almost 200,000 jobs were outsourced and federal contractors that offshored jobs received almost $51 billion in contracts. That administration bled the middle class dry while showering tax breaks on corporations that outsource strong family-supporting jobs. The End Outsourcing Act is a necessary first step to reverse the disastrous policies of Donald Trump, bring jobs back to our country, and put American workers first.”
“For too long, corporations have grabbed profitable government contracts funded by our tax dollars with one hand and pushed good jobs overseas with the other, with no concern for the impact on workers or our communities. Last fall, during the height of the COVID pandemic, one of the largest federal contractors, General Electric, announced that it would be sending dozens of jobs manufacturing power turbines from Schenectady, N.Y., to Poland. These corporations are driven by one thing — massive profits. The End Outsourcing Act will ensure that our tax dollars go to companies that create American jobs, not the ones that are shipping jobs overseas,” said President of IUE-CWA Carl Kennebrew.
“It’s long past time that we eliminate tax loopholes and end federal contracts and grants for corporations that outsource jobs and instead start providing incentives to employers that do the right thing by investing in our communities,” said United Steelworkers (USW) International President Tom Conway. “The USW supports the End Outsourcing Act as a piece of common sense legislation that will put workers and their families first.”
“For far too long, U.S. businesses have been free to outsource U.S. jobs to low-cost, low-wage nations in search of ever-increasing cost reductions and short-term profits. This problem is particularly acute in the manufacturing and aerospace industries where tens of thousands of our IAM members’ jobs have been relocated abroad. In addition to the negative impact of this job loss on America’s working families and communities, the transfer of this work to other nations jeopardizes the strength of the U.S. economy, the integrity of our domestic industrial base, and our status as a world leader in technology and innovation. The End Outsourcing Act is precisely the kind of legislation our country needs to stop the rampant outsourcing of U.S. jobs, revitalize our domestic manufacturing industry, and bring quality jobs back onto U.S. soil.” – International Association of Machinists and Aerospace Workers International President Robert Martinez, Jr.
Too many businesses in the United States have sent domestic manufacturing jobs overseas to low-cost, low-wage countries as companies aim to cut costs and increase profit. Meanwhile, families and communities in states across the country are feeling the loss. Between 2001 and 2015, the United States lost more than three million jobs to China alone–nearly three quarters in manufacturing.
Hundreds of jobs across New York State have been lost in recent years as companies move their facilities overseas — most recently, Siemens announced plans to close the manufacturing facility in Olean, costing the community 500 jobs. When New Era decided to close its manufacturing plant in Derby, more than 200 workers lost their jobs to workers overseas. In Schenectady, dozens of employees will lose their jobs when the plant closes to shift turbine and generator manufacturing to Poland. Additionally, New Yorkers working in IT, computer services, and telecommunications have also lost their jobs to outsourcing.
The End Outsourcing Act is designed to reverse this trend and ensure that federal contracts, loans, and grants funded by taxpayers support companies that employ American workers. First, the End Outsourcing Act will prohibit companies who outsource from using federal tax incentives like tax breaks and federal contracts. In addition, the bill will offer a 20 percent tax credit for companies to bring jobs back to the United States; the tax credit will help pay for permits fees, leases, and general moving costs of relocating a new facility or new jobs into the country. Finally, federal agencies will require companies to make mandatory disclosures — on applications for grants, loans, or loan guarantees — if they have outsourced jobs within the last three years.
As part of her efforts to help the economy recover Senator Gillibrand has prioritized helping workers and local communities affected by outsourcing. Earlier this year, Gillibrand cosponsored the No Tax Breaks for Outsourcing Act, legislation that would protect U.S. jobs by ending tax incentives created by the 2017 Trump tax giveaway bill, which send jobs and profits overseas. The bill would ensure multinational corporations pay the same tax rate on profits earned abroad as they do in the United States and, by doing so, could save $77 billion in revenue annually to fund priorities like infrastructure. Additionally, Senator Gillibrand joined Senate Democrats in urging President Biden to temporarily suspend trade waivers that could allow foreign companies to bid on projects funded by the American Rescue Plan. A current loophole allows foreign firms — which do not have American workers or pay American taxes — to bid as American companies. By suspending these waivers while trade-pact terms are renegotiated with trade partners, the United States companies would get a fair shot at government contracts that would put Americans back to work.