By Shiladitya Lahiri, Research Analyst
Source: BPO Watch India
New York, Thursday, May 15, 2008 : While Clinton has fought to end loopholes that give tax breaks to companies offshoring jobs, she also has acknowledged that offshoring will be difficult to stop
Hillary Clinton has always been in the limelight when it has came to her opinion about the “outsourcing industry”. Four years ago, she brought Tata Consultancy Services to Buffalo City amid great fanfare and promises that its local operation might eventually employ up to 100 people. But the India-based company, one of the world’s largest outsourcing consultants, currently employs only about 10 people locally. This led to a variety of opinions being generated across communities.
The main lobbying organization for the Indian-American community, USINPAC, cited the Tata deal as one of Clinton's top three achievements as a senator -- and evidence of a turnabout, in its view, from her past criticism of outsourcing. Whereas in the year 2005, the Information Technology Professionals Association of America (ITPAA), an advocacy group based in Wilmington, Delaware representing professionals in the high-tech field handed out its first “Weasel Award” of 2005 to Senator Hillary Rodham Clinton marking her ‘betrayal towards the American people.’
On April 2, 2008, Hillary Clinton said that she wanted to ‘insource’ more jobs and stop giving tax credits to companies that send jobs overseas. The New York senator and Democratic presidential hopeful unveiled the $7 billion tax incentive and investment plan during a panel discussion at the IBEW Conference Center and training facility on Pittsburgh's South Side, which marked the last stop in her six-day "Solutions for America" tour of Pennsylvania.
“If the United States continues to outsource jobs to India in increasingly large numbers, people will begin to feel insecure and may very well seek more protection against what they view as unfair competition.…………………America is not just a marketplace to get a foothold in. It is a place to make lasting investments that will create jobs and economic growth for everyone.” – Hillary Clinton
Clinton proposed expanding tax benefits for research and development by increasing the existing credit by 50%, and creating a 40% research and development credit for basic research. She also proposed ending the practice of ‘deferral’, which allows companies to defer paying taxes on income earned by foreign subsidiaries, and the creation of 15 ‘innovation and research clusters’ across the country.
She also expressed her intentions of creating a manufacturing advanced research projects agency, and a green manufacturing extension partnership. The panel members included Pittsburgh Life Sciences Greenhouse President and CEO John Manzetti, who told Clinton that creating more companies was the key to retaining talent in the area. He paraphrased a well-known axiom of Clinton's when he told her, “It takes a community to raise a company.”
Offshoring critics, nevertheless, said concerns about the Tata deal and Clinton’s views on offshoring have grown in recent months. While Clinton has fought to end legal loopholes that give tax breaks to companies that offshore jobs, she also has acknowledged that offshoring will be difficult to stop and has continued to urge Indian companies to invest in the United States.
As the election fervor catches on, the outsourcing issue has once again been resurrected to a hot campaign issue. Democrats like Clinton who have to aggressively court special interests like labor unions - that vehemently oppose outsourcing - have to tread carefully and try to balance their support for free trade and globalization.
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