Fact Sheet: Obama Insourcing vs. Romney Outsourcing
CHICAGO, IL -- Vice President Joe Biden is in Davenport, Iowa today discussing the President’s efforts to create an economy that out-builds and out-innovates the rest of the world, while encouraging insourcing to bring jobs back to America. Mitt Romney, on the other hand, believes in an economy built on outsourcing, loopholes and risky financial deals that jeopardize our entire economy and threaten the security of the middle class. It’s no surprise that Romney supported outsourcing both as Governor of Massachusetts and in his private business deals. He turned his back on American workers and doubled down on firms that make a profit by sending American jobs overseas.
Mitt Romney has profited from offshore investments in countries including the Cayman Islands, Bermuda, Switzerland, Australia, Germany, Ireland and Luxembourg--to learn more about Mitt Romney’s foreign investments, click here: http://www.barackobama.com/romney-offshore-outsourcing
The Obama-Biden Administration Has Supported Insourcing and Creating Manufacturing Jobs at Home: The manufacturing sector has added 429,000 jobs since the beginning of 2010 – prior to that, the last year that manufacturing employment rose was 1997. The President has supported this growth through steps to support American manufacturing:
• Calling for Tax Reform to Support Insourcing and Remove Incentives for Outsourcing: The President has put forward a comprehensive framework for corporate tax reform that would:
o Reduce Corporate Tax Rates: The President has proposed to lower overall corporate tax rates to 28 percent – with an even deeper cut to an effective rate of 25 percent for manufacturers producing in the United States. The President’s plan would also double the credit for advanced manufacturing technologies from 9 percent to 18 percent.
o End Incentives to Shift Jobs Overseas, While Encouraging Companies to Bring Jobs Back to the United States: Currently, costs incurred to outsource American jobs are tax deductible – providing a tax incentive for moving jobs overseas. The President proposes ending this deduction, and creating a new 20 percent income tax credit for expenses incurred to move jobs from abroad to the United States. In addition, the President has called for a new minimum rate of tax on foreign income, ending tax incentives that make it cheaper to invest overseas – putting domestic manufacturers at a disadvantage.
o Strengthening Incentives for Investments in Innovation: The President has proposed to expand, simplify and make permanent the Research and Experimentation Tax Credit, which provides an incentive for investments in research in the United States.
• Making Tough Decisions to Save the Auto Industry: The President made the tough decision to extend assistance to GM and Chrysler in early 2009. That decision, combined with shared sacrifice and a new strategy needed to restore the automakers’ competitiveness, saved over 1 million jobs at GM, Chrysler, and throughout the domestic automotive supply chain. And since the companies exited bankruptcy, the auto industry has created over 200,000 jobs.
• Enacting Tax Cuts to Support Manufacturers Looking to Create New Jobs At Home: Since taking office, the President has signed into law tax cuts that have supported manufacturers looking to expand, invest and hire:
o 100% Expensing to Support New Investments in Plants and Equipment: The President fought for and enacted 100 percent expensing, which allowed businesses to immediately write off 100 percent of the cost of new investments in plants and equipment in 2011. The President has proposed extending this tax cut through the end of 2012, which would continue an incentive that encourages companies to make investments now.
o 18 Small Business Tax Cuts: 100% expensing is one of 18 small business tax cuts the President has signed into law, including a temporary elimination of capital gains taxes on key small business investments, a tax credit for hiring unemployed workers, and a small business health care tax credit.
o Tax Credits to Support Advanced Energy Manufacturing: As part of the Recovery Act, the President enacted a new 30% investment tax credit for advanced energy manufacturing projects – available only for projects in the United States. The President has proposed to extend this tax credit, which has supported nearly $8 billion in manufacturing investments across the country.
• Creating a Level Playing Field for U.S. Workers and Companies: The Administration has taken steps to help U.S. workers and companies compete on a level playing field, bringing WTO cases against China at nearly twice the rate as the past Administration, fighting unfair trade practices in areas like tires, solar panels and the rare earth metals used for manufacturing, and creating a new trade enforcement unit. The United States is now on track to meet the goal of doubling exports over five years, while the President has signed trade agreements with Korea, Colombia and Panama that are opening new markets for American companies.
• Investing in American Workers: In addition to investments in Pell Grants, a new college tax credit worth up to $10,000 over four years of college, and efforts to reform K-12 education, the President has taken steps to help workers develop the skills most relevant to manufacturing jobs. Last year, the President joined with the National Associations of Manufacturers to announce an effort to provide 500,000 community college students the industry-recognized credentials they need to secure jobs in advanced manufacturing. And building on these measures, the President has proposed a new Community College to Career fund to help train 2 million workers for jobs in high-growth and high-demand industries.
o Supporting Advanced Manufacturing Technologies in Our Factories: The President has proposed a one-time, $1 billion investment to launch the National Network of Manufacturing Innovation, public-private institutes that would bring together our best researchers, companies, and entrepreneurs to tackle manufacturing challenges with broad applications. In addition, the President’s Budget proposes $2.2 billionfor advanced manufacturing R&D, including key programs at Commerce, Defense, Energy and NSF.
Mitt Romney Has Proposed Policies That Would Encourage Outsourcing Instead of Creating New Manufacturing Jobs at Home
• Mitt Romney Has Proposed Tax Reforms That Would Encourage Outsourcing by Eliminating Taxes on Foreign Profits: Mitt Romney has proposed to overhaul the tax system so that the foreign profits of U.S. firms aren’t taxed in the United States, even when repatriated. That provides an incentive for companies to outsource American jobs: if a company decided to move a factory abroad, it could do so knowing it would not have to pay taxes on the earnings from that factory.
• Mitt Romney Has Proposed to Do Nothing to End Incentives in the Existing Tax Code that Support Outsourcing: Unlike the President, neither Mitt Romney nor his Republican counterparts have offered proposals to eliminate the deductibility of moving expenses for outsourcing jobs or provide tax incentives for insourcing.
• Mitt Romney and His Republican Counterparts Would Slash Investments that Help Encourage Companies to Keep and Create Manufacturing Jobs in the United States: Mitt Romney’s promise to balance the budget – while cutting taxes by $5 trillion and increasing defense spending – would require slashing investments in education, worker training, infrastructure, clean energy and other areas that encourage companies to keep and create jobs in the United States instead of outsourcing them to other countries. American manufacturing. In fact, outside experts have estimated that for Romney to make good on his pledge for a balanced budget, it could mean cutting all domestic spending outside Social Security by at least 35 percent.
Governor Mitt Romney’s Economic Policies Hurt Massachusetts Workers, Moved Government Jobs Offshore
Manufacturing Declined By Twice the National Average in Massachusetts Under Romney
Under Romney Manufacturing Jobs In Massachusetts Declined By Twice The National Average—“The Third Worst Record In The Country.” Andrew Sum and Joseph McLaughlin from Center for Market Studies at Northeastern University wrote, “Manufacturing payroll employment throughout the nation declined by nearly 1.1 million or 7 percent between 2002 and 2006, but in Massachusetts it declined by more than 14 percent, the third worst record in the country.” [Boston Globe, 7/29/07]
While Governor, Mitt Romney Fought to Make Outsourcing Easier & Sent Government Jobs Offshore
• Mitt Romney Vetoed Legislation Barring the Offshoring and Outsourcing of State Jobs: Romney vetoed legislation that would have barred outsourcing of Massachusetts’ jobs overseas. “In a surprise move, Romney also vetoed a provision barring overseas outsourcing by vendors doing business with the state, even though in March he proposed a $29 million package of incentives designed to discourage Massachusetts companies from moving jobs out of state.” [Boston Globe, 6/26/04]
• Reports Found That Romney’s Government Had Contracts with Offshore Vendors: According to a 2004 report, Massachusetts had contracts with at least seven offshore outsourcing vendors, mainly for call centers and IT services. [Good Jobs First, July 2004]
• 2004: Study showed $7.1 million in state taxpayer dollars went to companies outsourcing work, previously done domestically, to countries overseas – including a Department of Transitional Assistance Contract with JP Morgan Chase to operate call centers in India. “With the Legislature poised to try to override Governor Mitt Romney’s veto of a measure to prohibit state agencies from contracting with companies that send the work overseas, a new study shows that the state has already paid $7.1 million to contractors that ‘offshored’ work to places like India. The Massachusetts Department of Education and the Teachers’ Retirement Board are among those that have sent work overseas that could have been performed by Americans, according to WashTech, the Washington Alliance of Technical Workers, an affiliate of the Communications Workers of America.” [Boston Globe, 7/20/04]
• 2005: GAO found that Massachusetts used offshore outsourcing for its Child Support Enforcement, Food Stamp Program, and Unemployment Services. [Government Accountability Office, 3/28/06]
Romney Repeatedly Axed Funding For Workforce Training For Small Manufacturers
• Romney’s Budget Cuts To Manufacturing Partnership Hampered Effort To Save Thousands Of American Jobs. “Romney’s recent move to slice $425 million from state spending will hamper the efforts of a program that has helped hundreds of small manufacturers compete, survive, and save thousands of jobs. The program, the Massachusetts Manufacturing Extension Partnership, or MassMEP, is jointly funded by state and federal governments and considered by business officials to be a particularly effective economic development effort… Over the past five years, MassMEP has helped small manufacturers create or retain some 3,000 jobs, generate sales of more than $300 million, and undertake nearly $100 million in new investments, according to annual client surveys.” [Boston Globe, 11/23/06]
• Romney Repeatedly Vetoed Funding for Job Retraining Programs
o 2005: Romney Vetoed $850,000 For The Massachusetts Manufacturing Extension Partnership, Which Was Overridden By The Legislature. [Worcester Telegram & Gazette, 7/15/05]
o 2006: Romney Vetoed More Than $700,000 In Funding For The Massachusetts Manufacturing Extension Partnership, Which Was Then Overridden By The Legislature. [Westboro News, 12/14/06]
o 2006: Romney Vetoed Roughly $557,000 For The Massachusetts Manufacturing Extension Partnership From A Stimulus Bill [Boston Business Journal, 6/3/06]
Romney Has Personally Profited from Investing Overseas While Americans Have Lost Jobs at Home
Bain Capital Sent Production Work Overseas and Laid Off American Workers
• 1997: Shortly After The Merger, Dade Behring Closed Two Factories In Miami “Affecting 850 Employees” And Moved Production To Germany And Delaware. “Dade Behring, a newly merged maker of blood testing products, will close two factories in Miami over the next two years, affecting 850 employees, the company said on Thursday. Production will be moved in phases to bigger factories in Delaware and Germany in an effort to cut costs. South Florida employees will be eligible for transfer and also will be given help finding new jobs, human resources director Ray Angele said.” [Sun Sentinel, 11/21/97]
• Under Bain, Holson Burnes Laid Off 150 Workers At The South Carolina Plant Just Four Years After It Opened And Earned Millions In Profits, As The Company Began Sending Jobs Overseas. “More than two decades ago, Mitt Romney's business venture came to town with a bounty of highly anticipated manufacturing jobs. The new plant, just past the gas station off Interstate 85, needed skilled workers to churn out thousands of photo albums. Four years later, the Holson Burns Group Inc. - the company controlled by Romney's Bain Capital LLC - closed the factory and laid off about 150 workers. Some jobs were sent north, where months later many of those were also eliminated. Other operations went overseas. But Bain walked away with millions in profits.” [Associated Press, 12/19/11]
Romney Invested Time and Again in Foreign Countries, Including Noted Tax Havens
• “Pages And Pages” Of Romney’s Tax Return Are “Devoted To Foreign Entities … In Places Like Luxembourg, Ireland And The Cayman Islands, All Famous Tax Havens.” “Pages and pages are devoted to foreign entities in which Romney is invested. Many are located in places like Luxembourg, Ireland and the Cayman Islands, all famous tax havens. None shows much income. ‘These entities are not evading one dime of taxes,’ Malt said.” [Washington Post, 1/24/12]
Mitt Romney has profited from offshore investments in countries including the Cayman Islands, Bermuda, Switzerland, Australia, Germany, Ireland and Luxembourg--to learn more about Mitt Romney’s foreign investments click here: http://www.barackobama.com/romney-offshore-outsourcing
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