Senate limits federal offshoring

An amendment that limits the use of federal funds to pay for work done in foreign countries passed the Senate Thursday by a vote of 70-26.

The amendment, from Sen. Christopher Dodd (D-Conn.), targets the privatizing of federal work, along with procurement of goods and services. It modifies a bill called the Jumpstart Our Business Strength (JOBS) Act that applies to international taxation rules.

"American workers are hurting," Dodd said in a statement. "Our nation's chief export shouldn't be jobs for foreign workers. Thankfully, this measure says enough is enough."

The amendment, itself modified by amendments from Sen. John McCain (R-Ariz.) and Sen. Mitch McConnell (R-Ky.) would:

* Forbid agencies to outsource work formerly performed by federal employees to any group outside of the United States, except for jobs that federal workers had formerly performed outside the country, or when the President decides it is in the interest of national security to perform the work offshore.

* Prohibit other federal contracts from being performed outside the United States unless the agency's requirement is for the contract to be performed outside of the country, or the president decides offshore work is in the interest of national security. This exclusion does not apply to national security procurements made by the Defense, Homeland Security or Energy departments, or any intelligence agency.

* Require states to submit written certification that they will not use federal funds for work to be performed outside the United States.

All provisions can be waived if the goods or services are available only outside the U.S. Procurements covered by the World Trade Organization Government Procurement Agreement are also exempt.

The Information Technology Association of America opposes the measure, according to President Harris Miller. In testimony today before the Senate Democratic Policy Committee, he called offshore outsourcing a "new competitive reality."

"Outsourcing reduces cost, which in turn reduces prices," Miller told the committee, according to an ITAA statement. "Reduced prices mean that more customers can enjoy the benefits of IT, including small and mid-sized companies that might not otherwise afford the capital investment. This cycle of cost savings and price declines creates a wave of additional benefits for the economy, including lower inflation, higher productivity, enhanced GDP, more trade and, in the final analysis, more jobs at higher wages."