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Senators Urge Trump to Support the End Outsourcing Act

JUN. 25, 2020

Senators Urge Trump to Support the End Outsourcing Act

DATED JUN. 25, 2020
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Gillibrand, Baldwin, Peters Push For Inclusion Of End Outsourcing Act In Next Relief Package To Aid Economic Recovery

The End Outsourcing Act Would Bring Back Jobs Moved Overseas and Protect Workers Nationwide by Prohibiting Federal Incentives for Outsourced Jobs and Ensuring Federal Policies Only Reward Companies that Hire in the United States

June 26, 2020

Today, U.S. Senators Kirsten Gillibrand (D-NY), Tammy Baldwin (D-WI) and Gary Peters (D-MI) called on the Trump administration to support the inclusion of Gillibrand's bicameral legislation, the End Outsourcing Act, which would utilize the tax code and federal grants, loans and contracts to end the outsourcing of jobs overseas. The legislation would create a new tax benefit to help companies bring jobs back to America, and would require companies that have outsourced jobs within a five-year period to pay back federal tax incentives and grants from facilitates closed due to outsourcing.

In a letter to White House Trade Advisor Peter Navarro, Gillibrand and her colleagues expressed the importance of including the End Outsourcing Act in the next coronavirus response legislation to facilitate the return of American jobs. Recently, Navarro stated that President Trump desired the next stimulus package to contain at least $2 trillion dollars and to bring outsourced jobs back to the U.S.

“For far too long, companies have been allowed to use tax incentives to move facilities overseas for cheap labor, leaving thousands of New Yorkers — and millions of Americans — struggling without jobs, most commonly in manufacturing,” said Senator Gillibrand. “The COVID-19 pandemic has now put millions more out of work. During this critical time, it's important that we rebuild a strong economy by returning outsourced jobs and preventing them in the future. I'm proud that my End Outsourcing Act would do both of these things. It's time to bring good paying jobs back to the United States to employ American workers and help our economy recover.”

“Big corporations got huge tax breaks from President Trump, and far too often, the result has been outsourced jobs and pink slips for Wisconsin workers,” said Senator Baldwin. “In order to stop the outsourcing of manufacturing jobs, our workers need tax reform that rewards their hard work and doesn't encourage corporations to send their jobs to other countries. This legislation will help keep jobs here at home instead of encouraging outsourcing.”

“With a level playing field, Michigan workers can outcompete anyone in the world,” said Senator Peters, a member of the Commerce, Science and Transportation Committee. “This commonsense legislation would help end outsourcing by incentivizing companies that bring jobs back to the U.S. It's critical that we advance the End Outsourcing Act as part of future Coronavirus legislation, because it would help protect and create Michigan jobs, including in manufacturing, as we work to recover from this economic crisis.”

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.

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. The legislation would 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.

Full text of the letter can be found below.


June 25, 2020

The Honorable Dr. Peter Navarro
Director and Assistant to the President
The Office of Trade and Manufacturing Policy
1600 Pennsylvania Avenue NW
Washington, D.C. 20500

Dear Dr. Navarro,

On June 13, 2020, you stated on CNN that the next stimulus package should contain "at least $2 trillion dollars that is strategically focused around the President's two simple rules — Buy American, Hire American — along with incentives for American companies to bring offshored jobs back home.". We wholeheartedly agree that the federal government has a responsibility to ensure that its policies, including tax breaks, federal contracts, and other incentives, are designed to support companies that invest in the United States, not those that invest in foreign countries. That goal is fulfilled in the bicameral End Outsourcing Act. This bill would encourage companies to return their business to domestic factories.

The United States was built on a social contract between businesses and workers — a mutual understanding that the success of one contributes to the success of the other. Yet, in recent decades, the United States has too often experienced a shift of domestic manufacturing to low-cost, low-wage countries. While this shift is the result of a number of factors the loss of manufacturing jobs has devastated families and communities in states across the country. There must be an effort by policymakers to reverse the decades-long trend of the middle class losing economic ground. The upcoming COVID-19 relief legislation provides a perfect opportunity for Congress to return jobs to American workers and help the economy begin to recover after the shutdowns.

The End Outsourcing Act would protect jobs in the United States by eliminating tax benefits to companies that try to deduct the cost of sending jobs overseas. It would prevent outsourcing companies from bidding on federal contracts or grants, without disclosing their outsourcing practices and requires federal agencies awarding contracts, loans, loan guarantees, and grants to establish a negative preference for employers who have outsourced in the last three years. Additionally, the legislation would create a new tax benefit to help companies bring jobs back to America, and would 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. This new tax incentive 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. This bill will also require employers that file a Worker Adjustment and Retraining Notification (WARN) notice of layoff to include a statement on whether the affected jobs will be outsourced to another country. Currently, there is no program in place to track data on outsourcing.

We believe the government can make a real difference in revitalizing the American economy for years to come. It's time to stop helping companies that ship jobs overseas, and reward those bringing jobs back home. For far too long, companies have been allowed to use tax incentives to move facilities overseas for cheap labor, leaving millions of Americans struggling without jobs. I'm proud that the End Outsourcing Act would eliminate tax benefits for outsourcers and impose significant penalties on companies that outsource, while also providing incentives for companies that invest in the United States. No one should fear losing their job because their company doesn't want to invest in American labor. This legislation will be a key component to bringing jobs back to the United States and help our country to recover from this unprecedented economic downturn.

Sincerely,

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