Anti-outsourcing bill blocked in US senate, Blow to Obama

Bill to stop tax breaks to US companies which move jobs overseas

PTI | September 29, 2010



In a move that augured well for India, Senate Republicans successfully blocked the passage of an anti-outsourcing bill that denied tax breaks to US companies which move jobs overseas, dealing a blow for President Barack Obama.

Republicans in a 53-45 vote blocked the bill which fell six votes short for passage. At least 60 votes were needed to clear the Republican procedural hurdle to the Democrat Bill which failed a key test.

The bill envisaged a ban on government contractors from using American taxpayers' money to move jobs offshore.

As part of efforts to boost employment in the US, Obama is vigorously pushing to end the tax break for companies who ship jobs overseas saying it should go to firms who create jobs in America.

India, which already holds at least 50 per cent of the global outsourcing market, has become the world's back office as Western firms set up call centres, number-crunching and software development outlets to cut costs.

Democratic backers, who vow to make the vote a campaign issue in the November 2 Congressional election, claimed that Republicans have undermined their efforts to create jobs. On the other hand, Republicans and business groups dismissed the bill as a political stunt that would increase taxes on companies and undermine job growth.

In what is seen as an electoral populist move, the Creating American Jobs and End Offshoring Act aims at small manufacturers and included a payroll tax exemption for firms that move jobs to US, but the bill also contains provisions to prevent businesses from deferring US taxes on the income they make from foreign subsidiaries.

Indian IT honchos have maintained that the bill won't make much of an impact on India. However, they warned that US companies operating in other countries may be beaten by the same stick.

Several business groups such as the National Association of Manufacturers (NAM) were strongly opposed to the legislation. It had sent a letter to senators arguing the measure would make US corporations less competitive and hurt job creation.

Terming the bill as an election gimmick, Republican senator Orrin Hatch slammed the Democrats for their "height of irresponsibility" that would put the US economy at "greater risk."

"Desperate times call for desperate measures and the majority is showing how desperate they are with a bill that increases the tax burden on job creators and ship much-needed US jobs overseas."

Hatch feared that "raising taxes on companies' overseas profits will just incentivize them to move their domestic facilities to another country... That is not the prescription that will cure our ailing economy."
 

Comments

 

Other News

India reaffirms commitment to climate multilateralism

India has reaffirmed its commitment to climate multilateralism and the principles of Equity and Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC), calling for a fair, equitable and ambitious outcome at the 31st Conference of the Parties (COP31) to the United Nations Framewo

How the mind can help the body heal itself

Why do some people recover from illness against all odds? Can our beliefs, emotions and consciousness influence the body’s ability to heal? Drawing on over three decades of experience in medicine, research and medical innovation, internationally trained ophthalmologist and author Dr Dinesh Verma ex

1,364 anti-cancer formulations to cost less from today

The National Pharmaceutical Pricing Authority (NPPA), under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, has capped trade margins on the Maximum Retail Price (MRP) of 137 anti-cancer drugs. This was based on the recommendations of an Expert Committee constitute

Who checks the books?

I read about the news about the Coimbatore library over coffee this morning. On the face of it, the headline was about a political ‘war’ between the DMK and TVK. But what stayed with me was something much more important than the blame game behind what had transpired. A writer walking through

Development paradox: Falling poverty miracle and an inequality problem

India’s reduction in poverty over the past decade is a development achievement of considerable significance. The World Bank’s April 2026 ‘India Development Update’ estimates that the share of Indians living below the international extreme-poverty line of $3.00 per person per day i

In Arunachal, a river we call mother

In Arunachal Pradesh, the Siang is not just a river. For many of us, especially the Adi people, it is part of our family. Our grandparents fished in it. Children learned to swim in it. Our farms drink from it. When someone says a huge dam will be built on it, we do not hear the word "project".

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter