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…
Madam President, yesterday we began our discussion on outsourcing--a subject well worth discussing because it is of great concern.
I am sorry I didn't have a chance to hear all of the discussions because I think we need to address all of the issues related to the needless outsourcing of U.S. jobs abroad. It is a problem in my State as it is in many others. I imagine I am not the only Member of this body who has been confronted with workers who have lost their jobs, and many more who feel that the loss of their job is likely. They raise these concerns about outsourcing and jobs going abroad.
Yesterday I heard a lot of strong rhetoric about how bad it was, but I didn't hear a discussion of the many complicated issues that go into outsourcing. I did not hear a thorough discussion of how effectively we can remedy the problem.
As a matter of fact, the chairman of the Finance Committee raised the question that perhaps one of the remedies being proposed might put us in violation of the World Trade Organization rules with the possible imposition of much broader penalties on other U.S. workers not directly affected.
I think it is time we begin a discussion of this complicated issue. I hope we have hearings on it. I hope we have discussions on it because I think the people of America need to understand what it is like as we live in a true world economy.
I want to look first at what I consider to be a real problem of outsourcing; that is, governmentally enforced outsourcing. You say, What? The Federal Government and State governments are threatening to drive jobs out of the United States? Do we realize that?
In this body last year, I led a debate in which there were strong opinions on both sides. I don't think I need to remind my colleagues of the debate over the regulation proposed by the California Air Resources Board that proposed to require all small engines--the engines we have in weed trimmers, in lawnmowers, leaf blowers and chainsaws--would have to have catalytic converters. This was a very contentious debate. I thank my colleagues who supported me and who helped us prevent the imposition of this rule nationally outside of California.
We talked about some of the dangers--the danger that 1,100-degree catalytic converters would start fires. Grass burns at 500 degrees. The danger of a small engine with a 1,100-degree catalytic converter is great. But there was a more direct danger. If that California regulation had gone nationwide, then the companies set up to manufacture small engines would not have been able to manufacture them in their existing facilities. They told us--and outside experts agreed--that they would have to rebuild these facilities. Where would they rebuild the facilities? They would rebuild the facilities in China because they could do it so much more cheaply and use less expensive labor in China to turn out the engines. Some of them are now produced in China, and they would have moved all of the small engine production to China.
I was in Poplar Bluff, MO, last Saturday night. I was thanked by the 1,100 employees of Briggs & Stratton in Poplar Bluff. I was thanked, and my colleagues in this body and in the House were thanked, because we took steps to stop the California Air Resources Board from sending a regulation nationwide that would have cost them their jobs. Not just 1,100 jobs at Poplar Bluff in Missouri, a total of 5,000 jobs in Missouri would have moved offshore. They would have been outsourced.
Nationally, more jobs in Wisconsin, almost as many jobs in Kentucky, jobs in Alabama, jobs all across the Midwest, a total of 22,000 American jobs would have been outsourced by that governmental regulation if this body, at my request, and the other body at the request of Congresswoman Emerson, had not been able to say you are not going to impose those restrictions outside the State of California. I thank my colleagues on behalf of the workers in Missouri and around the Nation whose jobs were not outsourced.
But then we have another problem. Do you know what is driving jobs offshore now? A shortage of natural gas. Natural gas prices have run way up because of governmentally enforced provisions. The natural gas crisis we have in the United States is a governmentally enforced shortage, a governmentally enforced hike. Many low-income families find their natural gas bills going through the ceiling. All of us who heat with natural gas see our natural gas bills going up.
Worse, men and women who work in industries that use natural gas-- chemical and related industries--are seeing their jobs move offshore because the producers of those goods have to go to other countries where they have abundant natural gas supplies, where the natural gas supply has not been constrained by governmental action and not been enhanced by governmental mandate. We have been sitting around here and we cannot get an energy bill through that would tap the absolutely essential natural gas resources in the Presiding Officer's State of Alaska--and, I might add, ANWR, too.
We have natural gas, but we cannot use it. Why? Because governmental regulations say we cannot drill here or there; we have not been able to build a pipeline.
Why have natural gas prices gone up? We have mandated electric utilities not to use abundant coal but to use natural gas. Natural gas should not be used to fire electric generating boilers. It has too many other uses.
There was an article last week in the Wall Street Journal by Russell Gold talking about how natural gas costs hurt United States firms:
The root of higher natural-gas prices is a federal policy
that promotes use of the relatively cleaner-burning fuel
without providing incentives or means for natural-gas
companies to increase production. So while demand soared in
recent years, especially from a raft of new gas-fired power
plants, producers have struggled with supply. Most North
American gas fields are years past their prime, and
environmental restrictions prevent drilling on many of the
most promising areas.
He has summed it up well. We have a crisis in natural gas prices and natural gas supply and in outsourcing of natural gas-using industries because of government policy. The farmers in my State have to use fertilizer. The ``n'' in the three-numbered fertilizer most farmers use or the anhydrous ammonia comes from natural gas, and they see tremendously high prices. I believe in a little bit of 13/13/13 and the prices jumped in that small sack I buy. When you are buying tons and tons of this, it cuts into farmers' profits and raises their costs.
Do you know what I think. We have all these impact statements, environmental impact statements, but maybe what we need is a jobs impact statement. Before we pass one of these good ideas or before some agency of government comes up with a new regulation, maybe they ought to have to do an impact on the jobs it would cost or create.
I would like to have some of my colleagues who have been so vocal and persuasive and vociferous in arguing against outsourcing to have a chance to vote on whether we ought to have a jobs impact statement. That seems to make a lot of sense to me. Maybe we can do something. I will be working on that. I may offer that for this body's consideration.
But I tell you something else that is causing outsourcing and that we have not done anything about. We cannot move forward on asbestos litigation reform. There are 3,000 or 4,000 people who are tragically sick because of asbestos, but the asbestos trial lawyers have filed class action suits with 700,000 plaintiffs.
That struck home for me because I live in northeast Missouri. My hometown of Mexico, MO, used to call itself the saddle horse and fire clay center of the world. Saddle horses are three- and five-gaited horses. Rex McDonald, trained by Tom Bass, is one of the leaders. Unfortunately, we are no longer the fire clay or refractory center of the Nation. We had thousands and thousands of people employed in making high-temperature and abrasive-resistant bricks that line steel furnaces and petroleum-cracking furnaces that line the Navy boilers. That used to be the major industry.
But it turns out that some time ago there was some asbestos used in the mortar that held the refractory's products together. So all of those companies have 700,000 lawsuits filed against them. Most, if not all of them, have been forced into bankruptcy because of asbestos litigation. Their buyers have come in and picked up the customer lists and the recipes and moved the production to Canada to supply our basic industry needs. The most basic industry, basic for steel, for aluminum, for petroleum products, has been driven largely to Canada to get away from asbestos litigation.
We are not taking the steps we need to allow us to bring back into the United States the production of one of the most basic elements of heavy industry. That is one thing maybe we can work on. Maybe we can pass an asbestos bill--we should have done so a long time ago--to care for those who are really sick, but also to cut off frivolous claims that do nothing but line trial lawyers' pockets. Tort reform is another thing we need to address to keep businesses productive so they can hire workers.
I tell you one other thing. I have a particular interest because the Senator from Maryland and I chair the appropriations subcommittee that appropriates funds for the National Science Foundation. We are seeing a tremendous shortage of scientists and engineers. We are just not finding enough United States students who want to follow a science or engineering curriculum. With the increasing developments in science and technology and engineering, we have to be turning out more scientists. We need more money. I make a plea for more money for the National Science Foundation budget so we can increase the incentives the National Science Foundation is using, along with science centers and educational institutions through the country, to train more scientists and engineers and technicians.
Yes, we need to train more people in community colleges. That is very important because if we do not train them, other countries, such as India, with tremendous reservoirs of engineers are turning out top quality engineers. If we do not have the engineers to do the work that is needed, that work is going to go to India. We need to do something about it. And we ought to begin moving.
In a growing competitive and interdependent global economy, as any economist will explain, there are increasingly greater flows of trade, capital, and labor.
Outsourcing apparently has been occurring wherever freedom has existed
because private businesses will seek to increase efficiency and provide better products at a lower cost by focusing resources on what they do better than everyone else. This has occurred in the United States in the previous half century, as the United States employment grew from 45 million to 130 million jobs.
I was one who thought I would always buy an American car. I thought I had been doing so. But do you know something. More and more American cars have foreign-made parts and foreign-made components. At the same time, more foreign companies are coming into the United States. You have to do a lot of research to find out which car has more and which car has less U.S. components.
The auto industries are employing people at good wages in the United States at high-tech jobs, while lower-tech jobs are done overseas. But the American consuming public has demanded the best quality automobiles. So it is difficult, when you go out and try to buy American, to find out what is truly American. Those eggs have been scrambled, and it is difficult to unscramble them.
But as much a problem as outsourcing and foreign trade is, I want to give you some good news. There are some in this body who voted for the North American Free Trade Agreement and have now roundly condemned it. But on Monday of this week, the Governor of Missouri proudly announced--and I congratulate the State--that Missouri exports grew by 6.5 percent in 2003. From his release, it says Canada and Mexico were top importers of Missouri products. Canada imported $3 billion of products; Mexico imported $748 million of products. Not bad. Those are two countries I believe are in NAFTA.
But more interestingly, the Governor goes on to say:
More than 75,000 jobs in the state were directly tied to
industries that export to other countries. . . . Also, the
top 10 exporting industries paid higher average annual wages,
at $41,894, than the statewide average wage of $33,600.
Madam President, I ask unanimous consent that release be printed in the Record.
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.
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.
Madam President, as we have this debate, it is impossible to observe one nearly ignored reality. Despite whether we often or always disapprove of corporate decisionmakers, it is impossible to be for employees while being against employers. We cannot be unrestrained in our desire to impose additional costs on employers and expect there not to be harmful consequences to employees.
One would not know it by listening to some of the Presidential wannabes, but when you put more burdens on employers, they respond. They respond to punitive taxation, regulation, and litigation. They will outsource. They will move away. They will respond positively to incentives. We hope the incentives of the underlying subject of the bill before us today to provide tax relief for exports will help us get more jobs in this country.
In my State, governmental regulations, State and Federal, are being used by some to try to prevent a foreign firm from investing $400 million in a plant that will employ 200 high-paid workers in a poor area.
They are trying to stop insourcing. We are in year 3 of environmental assessments to see if the plant can meet all the EPA, Corps of Engineers, and State standards. If we keep piling on burdens, this firm can conduct operations in Thailand. I am afraid that option may be becoming more attractive every day.
As I said, the trial lawyers have litigated the refractory business out of Missouri. According to the National Association of Manufacturers, we have the most expensive legal system in the world, yet filibuster after filibuster keeps us from reforming the system. Tort taxes, for which America is famous, are estimated to have been over $230 billion in 2002, 13 percent higher even than the costs in 2001. Who pays for these skyrocketing costs? The tort lawyers pocket their 40 percent, but employers, employees, and consumers contend with those costs.
We are not upgrading the locks and dams on the Mississippi River that are the vital lifeline to make sure we can use the farm productivity of the Midwest to ship grain to export markets around the world, export markets that are bringing up prices and restoring economic well-being to the agricultural sector. We need to invest in our infrastructure.
Let me add highways. Highways are very important to growing jobs. I wouldn't want to leave the Chamber without saying that. There is much work to be done.
Some apparently think that highways are too expensive: ignoring the greater expense of decay and inefficiency. A good highway bill has passed the Senate, but is bogged down and may not emerge from the House.
We spend $60 million over 12 years studying whether our 70-year-old dilapidated locks on the Mississippi River should be modernized--a study that has resulted in nothing but red tape, congestion, and delay, without resolution. While failing to respond to the obsolescence of our Nation's most important inland waterway and artery to the world's markets, we are at risk of outsourcing corn and bean production to other countries.
This quagmire has been excellent news for South American farmers who are winning market share as fast as we are losing it.
On the Missouri River, another key waterway, the U.S. Department of Interior proposed in 2000 to end water transportation and increase flood risk for downstream businesses and landowners so they could experiment with pallid sturgeon habitat. Our farmers and other shippers who are struggling to compete look to government for more efficient transportation options. Instead, government uses it regulatory power to consign farmers and other employers to the mercy of a higher-cost transportation monopoly. More good news for foreign farmers courtesy of the U.S. Federal Government.
Farmers and businesses in my State routinely raise issues related to high energy costs. We need to be encouraging domestic production of energy. Instead we discourage it. Rather than safely developing renewable resources at home and oil in Alaska, we import oil from the Middle East. We had an energy bill that promoted all forms of domestic energy production but could not overcome a filibuster. So we are outsourcing midwestern farm jobs and Alaskan energy jobs to Saudi Arabia by Congressional obstruction. The Wall Street Journal featured an article recently noting how some firms were ``off-shoring'' in response to dramatic increases in natural gas necessary to fuel their operations.
Then there is the tax burden on U.S. businesses. According to some estimates, the U.S. has the second highest corporate tax burden in the world--second only to Japan. Most small businesses are taxed as individuals and are subject to the top marginal rates. Consequently, according to election-year Democrat rhetoric, these small businesses and corporations are ``the rich'' and next week we will see numerous attempts to raise their taxes.
Again, Congress can't stick it to the employers and claim to be deeply concerned about employees. We don't always like what corporations do--and I troubled by what seems like a herd mentality when it comes to outsourcing of many jobs--but businesses exist because Americans voluntarily purchase their products, Americans own them, Americans run them, Americans work for them.
No one advocates a business environment free of regulation, but we cannot continue to be oblivious to the costs that we, little-by-little, heap upon our employers.
If we want them to hire people and do so in the U.S.--and I certainly do--why don't we prove it. Why don't we resist raising their taxes next week? Why don't we end the filibuster on legal reform or ``tort tax'' reform? Why don't we end the filibuster on an energy bill? Why don't we modernize our infrastructure? Why don't we recognize that by working with businesses, we can reduce pollution rather than reduce American jobs.