Creating American Jobs and Ending Offshoring Act of 2010--Motion to Proceed

Floor Speech

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Mr. SCHUMER. Mr. President, first, I wish to thank my colleague who has spoken before me. The reason we are here tonight is because Senators Brown and Sanders said: Why talk about outsourcing of jobs, let's do something about it. That is what we are trying to do tonight. We are trying to actually do something about it. This is not just verbiage.

We see before us the faces of the people who have lost their jobs. We see the families, we hear the children, and so there is an urgency to do something. Every place I go in New York--it can be in upstate, an old manufacturing place; it can be on Long Island, supposedly the new economy--I hear about jobs leaving New York and leaving America and going overseas.

Then, there is some talk as if this is inexorable. It is not inexorable. That is what we are here to say tonight. We can do something to stop this, and stop it we must. Manufacturing used to be the backbone of our economy. It supported millions of families, was the staple of middle-class communities. It is no secret what happened.

Company after company after company began sending jobs to China and Vietnam and Malaysia, to Mexico and Brazil and parts of South America. These countries have lax enforcement of work rules, environmental rules, and pay rules. So it is cheap to produce goods. We have heard the statistics, how the United States lost millions of manufacturing jobs in the last 10 years--in New York, 90,000 manufacturing jobs in the last 3 years alone. One-third of our manufacturing base has disappeared nationally. In fact, I recently read that the United States has lost 42,000 factories since 2001, and 75 percent of those factories employed more than 500 workers. The bigger factories leave. Forty-two thousand factories closed, most of them employing more than 500 people.

I think of the people I have met who have lost their jobs. I go around my State and sit down with people who cannot find work. They come from all walks of life. I wish to tell you about Clay, a high school graduate who rose to the top of his industry in tool and die. He had a great life, married, six children, so his wife did not work.

Clay lost his job a year and a half ago because his company downsized, because they were sending jobs overseas. Here is what Clay does every day, every week. He wakes up Sunday night in upstate New York, drives down to Virginia. He looks for work in his field--he is a highly skilled tool and die worker--in Virginia. Tuesday, he goes to Washington, Baltimore; Wednesday, to Philadelphia, Allentown and others; Thursday, in the New York City area; and then goes back home Friday to find a job.

When he comes in the door Friday night, there is his wife and the kids, aged 2 to 14. You can bet a majority of them look at him and say: Well? These are not just statistics. There is a Clay in every community, many Clays in every community. That is just manufacturing.

Service sector jobs are going. I think of Dorothy, whom I met. Dorothy lost her job in the service industry, also because the company was moving jobs overseas. Dorothy told me she lost her job in June of 2008. I talked to her in January of 2010. She is about 50, did not have a family. Her life was her work. She loved her job. Here is what Dorothy told me. When you sit down and talk to people who have lost their jobs, little things stick with you. Here is what Dorothy told me. She said: Christmas morning I usually wake--she is a religious person. She goes to church and then goes to open the gifts with her nieces and nephews who are in her community.

She said: Do you know what I did this Christmas morning? I got up at 6 a.m. and I went online because I had this brilliant idea the night before, that maybe there would be jobs posted Christmas morning and no one else, everyone else would be too busy to go online and I would find it and get the job.

These are the people we are talking about. Whether it is in manufacturing or service, one of the most cited studies--and it is cited among conservatives--predicted that by 2015, 3.3 million U.S. service jobs will have moved offshore. So if you think you are safe because you are in a manufacturing job, forget it. No one is safe. No one. Whatever your income level is, whatever part of the country you are in, whatever industry you are in, no one is safe. By one estimate, about one-fourth of all U.S. jobs possess characteristics that make them susceptible to outsourcing within the next 10 to 20 years.

Sherrod Brown, my colleague, talked about Ohio and New York. Fisher Price Toys, well known. Three locations in western New York--started there. In 1990, they stopped manufacturing in East Aurora and Holland. In 1997, they closed the plant in Medina. Two thousand jobs were lost when the three manufacturing plants closed. In 2001, they moved all their manufacturing to Mexico. Fisher Price still has a call center in East Aurora as well as its headquarters. Now they are considering moving the call center to India--both manufacturing and service.

Syracuse China. Famous. Founded in 1871. These are companies that go with the communities. They started and grew with them. It is in Geddes, a suburb of Syracuse. Onondaga Pottery Company is what the name was when it started.

If you went to a restaurant or a hotel, you were eating off Syracuse China, one of the region's oldest manufacturers. In 2008, after considerable downsizing, they closed their plant in Salina, 275 jobs. You can still get Syracuse China. It says ``Syracuse China'' on the plate or on the cup or on the saucer, but it is made in China, not in Syracuse.

Watson Pharmaceuticals, high-end company, Putnam County. Five hundred jobs, high-end jobs in Putnam County, a growing suburb, moved to India.

NXP Semiconductors. Again, you think: Oh, semiconductors, that is a
big, new growing industry. I am going to be safe--600 jobs. East Fishkill, Dutchess County. Europe and Singapore.

Pfizer, largest pharmaceutical company in the world, used to have significant manufacturing operations in Rockland County. But as part of their worldwide restructuring, after Pfizer purchased Wyeth, 1,500 jobs gone to Ireland, Belgium, Canada, Puerto Rico.

We could all tell a few stories in every one of our States. I guess some of us, I hope everyone on both sides of the aisle knows the Dorothys and the Clays and the others who give this reality.

But there is another element to this debate. When companies move production overseas, it takes a human toll. Here is the most telling statistic of the last 10 years. From 2001 to 2007, a period of prosperity, median income went down. Even though we were prosperous, even though average income went up, wealth went up, GDP went up, but for the average middle-class person, income buying power went down. There are no statistics, but it would be hard not to assume that a good amount of it was because of outsourcing.

Last week, there were headlines quoting economists saying that, technically speaking, the recession was over. Let me tell my colleagues, to the average middle-class person whose paycheck is lower because they have less income, the recession ain't over. To most Americans, it sure doesn't feel like a recovery yet. The bottom line is that there won't be a true recovery until we create jobs in America, in the U.S.A. If we want to get our economic prosperity back, we need to bring the jobs back. We need to have ``make it in America'' become a reality on the floor of this Senate legislatively.

With this bill, we make our boldest attempt to reverse the trend of outsourcing. We do it in three ways.

First, the legislation eliminates tax breaks for firms that move facilities offshore.

Amazingly, right now if a company were to shut down a factory in Syracuse and move those jobs overseas, the company could deduct from their taxes the expense of closing that factory and the expense of shipping the materials. This legislation would end that.

Second, the legislation ends the Federal tax subsidy that rewards U.S. firms that move their production overseas. Under current law, U.S. companies can defer paying U.S. tax on income earned overseas until that income is brought back to the United States. This provides an incentive to keep that income overseas and employ people there.

Our bill says that if you close down your operations here in the United States and reopen overseas, you no longer get to defer paying your taxes.

This should be a no-brainer.

It is perverse that American taxpayers provide benefits to firms that offshore jobs. By rewarding the companies that bring jobs back to America, this legislation puts the incentive back where it should be.

Some say that this provision puts U.S. companies who open foreign subsidiaries at a competitive disadvantage to U.S. companies that don't. But I say that is just plain false. Under current law, if you have two companies in Oswego that are both going to expand capacity and create 100 jobs, our Tax Code puts the company that chooses to keep the plant in Oswego at a competitive disadvantage over the company that chooses to move jobs to China. Our bill would level the playing field, so that companies that keep jobs here aren't penalized.

These two measures will go a long way towards fixing the problem of outsourcing. But our bill doesn't just rely on sticks, it also contains a big carrot.

That carrot comes in the form of a major tax cut. We propose giving companies a tax cut--an actual cut, not a credit--for every position they bring back to America from overseas.

As long as the company can prove the employee is doing work that was once done overseas instead, the company won't have to pay the 6.2 percent social security payroll tax for that employee over a two year period.

For a $60,000 factory worker, that is a $7,440 tax cut. For a $100,000 manager, it is a $12,400 tax cut. That is real money. And it is not a tax credit that a business has to wait a year to receive. It is tax revenue that isn't collected in the first place, much like the HIRE Act that we passed back in March. So it is a tax cut that puts cash right in the pocket of a business, small or large, with no strings attached.

For once, rather than reward outsourcing, let's give employers an incentive to bring jobs home. I don't think that anyone who supports the motion to proceed on this bill believes that this modest piece of legislation is a silver bullet that will end offshoring. We need to do much more. We need to enforce our trade laws; we need to push China on its currency practices; we need to reform our tax code to make it simpler and more streamlined and representative of the modern economy; we need to get our fiscal house in order; we need to invest in science and education and infrastructure. We still have a lot to do to put America firmly on the road to prosperity.

But every step counts.

Earlier this year, as I just mentioned, this chamber passed the HIRE Act, a measure I worked on with Senator HATCH. It provided a payroll tax break for companies that hired an unemployed American. Already, through September, 5.6 million eligible employees have been hired under the act.

Just today, President Obama signed the small business bill that Republicans repeatedly tried to block in this Chamber. As a result, 1,400 small businesses signed the dotted line today on a loan that no bank would provide. That is $730 million worth of credit that flowed just today.

Under that same bill, eight new tax cuts for small businesses became effective today.

These are real results. So we should not stop trying things.

Right now, no issue bothers Americans more than the nonstop flow of jobs overseas. With this bill, we have a chance to do something about it. We can help the American dream launch a comeback.

This is not a Democratic or a Republican issue. Every single one of us has factories that have closed. Families don't have it easy anywhere in the country.

Politics is supposed to stop at the water's edge. The flow of jobs should, too.

So before we leave for the year, let's come together to take up and pass this measure to reverse this trend.

I yield the floor.

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