U.S. Sen. Richard Blumenthal stopped in Waterbury Monday morning to call on Congress to pass a bill that would provide tax incentives for companies moving jobs back into the United States.
If passed, the bill would give companies looking to move jobs back into the U.S. a 20 percent tax credit to cover the expenses associated with moving facilities or employees. The legislation would also close tax loopholes available to companies outsourcing jobs.
“Right now the system is completely backwards. We reward offshoring but we fail to reward reshoring and restoring jobs here,” Blumenthal said. “… We need to stop the offshoring and outsourcing of American jobs. This bill provides a beacon to bring back those jobs to our shores.”
Blumenthal said many large companies are at a “tipping point” where they are considering returning jobs to the U.S. He cited an April report from The Boston Consulting Group which found that 48 percent of the sampled U.S.- based manufacturing companies with sales over $10 billion are considering moving jobs back from China.
The consulting group found that manufacturing executives are concerned about the rising cost of labor in China. The survey also found executive considering factors like product quality, proximity to customers, and ease of doing business as they chart out their future decisions.
Blumenthal said his legislation could be just the thing to get them to move back.
“This bill could make a huge difference in that calculus when companies consider bringing jobs back because 20 percent of those costs as a tax credit would affect their bottom lines very substantially,” he said.
Waterbury Mayor Neil O’Leary said the city was an appropriate location for the press conference since its constantly competing to keep manufacturing jobs local.
“Quite frankly here in the city of Waterbury we’ve had the unfortunate, dubious distinction of having the highest unemployment rate for the last 10 years, and partially due to the fact that many of these jobs have gone overseas,” O’Leary said.
Blumenthal and O’Leary were joined at Allegheny Ludlum Corp by labor leaders like Connecticut AFL-CIO President John Olsen. He called a tax system that rewards companies for moving jobs overseas “insanity.”
“I’ve spoken to Democrats, Republicans, conservatives, liberals, we all seem to agree, something’s wrong with that policy,” Olsen said.
However, Blumenthal said there is opposition to the bill in Congress from lawmakers he described as “extremists.”
“There is a far-right, extremist group in the Congress that opposes almost any government action,” he said, acknowledging those lawmakers could block the bill.
Blumenthal said he’s hoping members of the public will contact their lawmakers and encourage them to support the bill. Olsen seemed to reference last week’s presidential campaign news cycle as reason to believe lawmakers will be willing to get behind the bill.
Last week, Republican presidential candidate Mitt Romney faced questions regarding whether he was still running a private equity firm when companies controlled by the firm were shipped overseas.
“I’m very hopeful that watching some of the activities last week and some people running away from just outsourcing alone, let alone giving tax incentives gives me a great deal of confidence that we’re going to be able to pass this legislation,” Olsen said.