Peters Introduces End Outsourcing Act, Incentives for Companies to Bring Jobs Back to Michigan & America

DETROIT, MI – U.S. Senator Gary Peters (MI) announced legislation that would incentivize American companies to retain and create American jobs. The End Outsourcing Act, which Peters introduced with Senators Kirsten Gillibrand (D-NY) and Tammy Baldwin (D-WI), would reform the tax code to reward businesses that bring jobs back from foreign countries. The bill would also require companies that receive federal grants, loans and contracts but continue to outsource American jobs to pay back federal tax incentives and grants within a five-year period.

In a letter to White House Trade Advisor Peter Navarro, Peters and his colleagues also urged the Trump Administration to adopt policies that match its stated goal of “Buy American, Hire American” by including provisions from the End Outsourcing Act in the next coronavirus legislative relief package. This effort comes after Mr. Navarro stated that President Trump wanted at least $2 trillion dollars in the next relief bill allocated toward bringing outsourced jobs back to the United States.

“With a level playing field, Michigan workers can outcompete anyone in the world,” said Senator Peters, a member of the Commerce, Science and Transportation Committee. “This commonsense legislation would help end outsourcing by incentivizing companies that bring jobs back to the U.S. It’s critical that we advance the End Outsourcing Act as part of future Coronavirus legislation, because it would help protect and create Michigan jobs, including in manufacturing, as we work to recover from this economic crisis.”

Peters has led numerous efforts to bolster American workers through a decrease in outsourcing. Last July, Peters joined a bipartisan group of colleagues in authoring the Build America, Buy America Act to ensure all federal agencies are meeting federal Buy America Requirements—particularly when it comes to new infrastructure investments. In October, legislation the Outsourcing Accountability Act which Peters introduced and championed passed the House of Representatives. The legislation would identify businesses that are sending jobs to foreign countries and require publicly traded companies to publish reports detailing the number of employees per location.

Text of the letter is copied below and available here:

Dear Dr. Navarro,

On June 13, 2020, you stated on CNN that the next stimulus package should contain "at least $2 trillion dollars that is strategically focused around the President's two simple rules -- Buy American, Hire American -- along with incentives for American companies to bring offshored jobs back home."  We wholeheartedly agree that the federal government has a responsibility to ensure that its policies, including tax breaks, federal contracts, and other incentives, are designed to support companies that invest in the United States, not those that invest in foreign countries. That goal is fulfilled in the bicameral End Outsourcing Act. This bill would encourage companies to return their business to domestic factories.

The United States was built on a social contract between businesses and workers—a mutual understanding that the success of one contributes to the success of the other. Yet, in recent decades, the United States has too often experienced a shift of domestic manufacturing to low-cost, low-wage countries. While this shift is the result of a number of factors, the loss of manufacturing jobs has devastated families and communities in states across the country. There must be an effort by policymakers to reverse the decades-long trend of the middle class losing economic ground. The upcoming COVID-19 relief legislation provides a perfect opportunity for Congress to return jobs to American workers and help the economy begin to recover after the shutdowns.

The End Outsourcing Act would protect jobs in the United States by eliminating tax benefits to companies that try to deduct the cost of sending jobs overseas. It would prevent outsourcing companies from bidding on federal contracts or grants, without disclosing their outsourcing practices and requires federal agencies awarding contracts, loans, loan guarantees, and grants to establish a negative preference for employers who have outsourced in the last three years. Additionally, the legislation would create a new tax benefit to help companies bring jobs back to America, and would require companies that have outsourced jobs within a five year period to pay back federal tax incentives and grants from facilities closed due to outsourcing. This new tax incentive will offer a 20 percent tax credit for companies to bring jobs back to the United States; the tax credit will help pay for permits fees, leases, and general moving costs of relocating a new facility or new jobs into the country. This bill will also require employers that file a Worker Adjustment and Retraining Notification (WARN) notice of layoff to include a statement on whether the affected jobs will be outsourced to another country. Currently, there is no program in place to track data on outsourcing.

We believe the government can make a real difference in revitalizing the American economy for years to come. It’s time to stop helping companies that ship jobs overseas, and reward those bringing jobs back home. For far too long, companies have been allowed to use tax incentives to move facilities overseas for cheap labor, leaving millions of Americans struggling without jobs. I’m proud that the End Outsourcing Act would eliminate tax benefits for outsourcers and impose significant penalties on companies that outsource, while also providing incentives for companies that invest in the United States. No one should fear losing their job because their company doesn’t want to invest in American labor. This legislation will be a key component to bringing jobs back to the United States and help our country to recover from this unprecedented economic downturn.

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