Conn. Sen. Lieberman Has Plan to Address Outsourcing as Part of Bigger Economic Challenge

May 14, 2004

Senator Joe Lieberman (D-CT) this week argued that the threat of offshore outsourcing is not just about losing American manufacturing and low-end services jobs to overseas competitors, but about losing America’s ability to create new high-end services and research and development (R&D) jobs.

In a speech at the New America Foundation, co-sponsored by the Electronic Industries Alliance, Lieberman highlighted the loss of high-wage services and R&D jobs to competitors such as China and India, and argued that it threatened to undermine America’s innovation infrastructure, the engine of job growth. To respond to this challenge, Lieberman unveiled a white paper with proposals to increase R&D investment, shore up safety nets to assist workers, strengthen enforcement of trade agreements, enhance workforce education and training, and promote fiscal responsibility. He also proposed creation of a bipartisan commission to address the offshore outsourcing challenge and develop proposals for strengthening our innovation infrastructure.

“We are not just losing jobs – we may be losing critical parts of our innovation infrastructure, and with them, our competitive edge in the global marketplace,” Lieberman said. “The offshore outsourcing of jobs is just the tip of an economic iceberg that America is sailing towards. Our economic vitality and national security are in jeopardy.”

Lieberman’s white paper focuses on what he called the next wave of the offshore outsourcing challenge – not just manufacturing and entry-level services jobs, but high-end services and R&D jobs. The paper concludes that America’s economic vitality and national security are in jeopardy because what was always believed to be the nation’s ultimate competitive advantage – U.S. high-end R&D and technological prowess – is now at risk.

Lieberman said that the response of politicians and policy makers has been predictable – the “Do Nothings” shun any government action, and the “Do Anythings” rely on protectionism. “Neither really gets to the heart of the outsourcing problem – America’s failure to innovate. That’s why we all need to Do Something – the Right Thing,” Lieberman said.

“To stop offshore outsourcing and preserve American jobs, America needs to rise to the international competition and grow again through innovation,” Lieberman said. “There is no other way. Leaving it all to the markets won’t work. Hiding behind a wall won’t work. Attempting to rig the game won’t work. Only education, innovation, investment, trade, training and hard work will give us the growth and jobs we want and need.”

Lieberman proposed a five-part strategy to address offshoring and restore innovation:

* Encourage greater innovation and technology development – reform the R&D tax credit to encourage collaborative research, and raise government and corporate investments in services research;
* Shore up our safety nets to help those hurt by offshore outsourcing by extending Trade Adjustment Assistance coverage to services workers and consider wage loss insurance;
* Strengthen our trade policies by enforcing trade agreements, stopping foreign currency manipulation and intellectual property theft, and focusing federal trade agencies on enforcing as well as negotiating trade agreements;
* Expand America’s talent base by reforming our education system and increasing the number of science and technology graduates through incentive grants and scholarships; and
* Get our federal fiscal house in order by reducing our deficits and reducing our dependence on foreign lenders.

Lieberman said that to act on such proposals, America needs a new injection of bipartisan political will. He proposed a bipartisan commission, modeled after the Young Commission of the 1980’s, charged with analyzing the impact of global changes on the American economy and offering non-partisan proposals to preserve our innovation infrastructure and create more high-wage American jobs.

“I will soon introduce legislation calling for a new Young Commission, with the hopes that our next President – be he John Kerry or George Bush – will make naming its members one of his first acts after Election Day,” Lieberman said.

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