NCPA - National Center for Policy Analysis

Anti-Outsourcing is "One Percent Solution"

March 10, 2004

There is a growing backlash against outsourcing -- sending domestic work to foreign businesses -- that erupted in the Senate last week, where anti-outsourcing legislation was adopted on a 70 to 26 vote. Opponents of outsourcing cheered, but investors are becoming aware that these actions threaten profits and stock prices, says Bruce Bartlett.

On March 4, the Senate adopted a measure that would bar federal contracts to companies that outsource any job previously done by an American. Additionally, it would prevent state and local governments from using federal funds for outsourcing.

While it is unlikely that this amendment will become law and is probably unenforceable even if it does, it sends a bad signal to the rest of the world, says Bartlett:

  • U.S. Trade Representative Bob Zoellick has warned that it will endanger relations with India and undermine world trade talks.
  • It would also invite retaliation from other countries and reduce foreign investment in the United States.

But even if the legislation is defeated this time around, says Bartlett, undoubtedly it will be back in some other form shortly. Democrats have decided that pandering to the unemployed by railing against outsourcing is their ticket to success on Election Day.

Although their proposals wouldn't do much good -- the Washington Post calls them "1 percent solutions" -- they get people worked up and put the Bush Administration on the defensive, explains Bartlett.

Source: Bruce Bartlett, "Anti-outsourcing is 'One Percent Solution,' " National Center for Policy Analysis, March 10, 2004.


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