As President Barack Obama escalates his contention thatRepublican presidential candidate Mitt Romney supports policiesthat send jobs overseas, Senate Democrats want to advance a measurecreating an incentive to bring jobs to the U.S.

The bill, sponsored by Michigan Democrat Debbie Stabenow, wouldgive U.S. companies a 20 percent tax credit for the cost of movingjobs and investment to this country from overseas. It would denycompanies a deduction for the expense of moving investment out ofthe U.S.

“We are now paying the cost of people who move jobs overseas astaxpayers, and people are appalled when they hear that,” Stabenowtold reporters yesterday. A procedural vote on the measure isscheduled for tomorrow.

The nonpartisan Joint Committee on Taxation estimated thatending the deduction for moving operations overseas would raise$168 million over a decade, while the 10-year cost of the taxcredit would be $255 million, meaning the measure would carry a netcost of $87 million over 10 years, said Stabenow spokesman CullenSchwarz. Companies could continue to deduct moving expenses forjobs transferred to the U.S., Schwarz said.

By comparison, the tax credit for rehabilitating historicstructures — one of the less expensive federal tax breaks — coststhe Treasury $2.9 billion over five years.

Douglas A. Shackelford, a professor at the University of NorthCarolina at Chapel Hill's Kenan-Flagler Business School, said in aninterview that “like all tax legislation” Stabenow's proposal“probably is dead on arrival before the election.”

Senator Roy Blunt, a Missouri Republican and Romney's chiefSenate supporter, said he wasn't sure if he would support themeasure.

“I don't believe it will produce much in the way of results,”Blunt said. “You might wind up creating a lot of obstacles forbusinesses of all sizes to do business for no real gain.”

If the bill doesn't advance, the vote would still have theeffect of requiring Republicans “to answer the question as towhether outsourcing is an acceptable business practice,” SenatorDick Durbin of Illinois, the chamber's second-ranking Democrat,said in an interview.

Poll Results

In a Bloomberg National Poll conducted June 17-20, 78 percent ofrespondents cited U.S. companies investing in jobs overseas as amajor reason why the unemployment rate hasn't declinedsignificantly in the past two or three years.

“It sells politically in certain places so I can certainlyunderstand the political game,” Shackelford said, adding thatdecisions about whether to employ workers overseas were morecomplex than the outsourcing debate takes into account.

“It would be good if our political debate went beyond that levelof crude assessment into more fundamental issues about how we cangrow and expand our economy,” Shackelford said.

Republicans on July 12 blocked a Democratic plan to provide taxbreaks for hiring and capital investment in part because they weredenied the chance to offer certain amendments.

The U.S. Chamber of Commerce opposes Stabenow's bill on groundsit would harm economic growth and U.S. companies' competitiveness,and make the tax code more complex.

The outsourcing proposal is the latest example of the Senate'smajority Democrats coordinating their legislative calendar withObama's campaign themes.

Obama's campaign released a television ad July 14 accusingRomney, a former Massachusetts governor and head of the privateequity firm Bain Capital LLC, of “outsourcing” jobs and stashinghis money in offshore accounts. The ad, set to Romney singing thesong “America the Beautiful,” is scheduled to air in ninebattleground states.

Campaigning in southwestern Ohio July 16, Obama told supportersthat the U.S. doesn't “need a president who wants to ship more jobsoverseas.”

Romney shot back at Obama, accusing the president of ignoringthe plight of middle-income Americans while rewarding campaigndonors with federal dollars that led to the outsourcing of U.S.jobs.

“This is a time when it's good to be a friend of the Obamacampaign, because you might be able to get some money for yourbusiness,” Romney said in Jackson, Mississippi, at a July 16 eventthat raised $1.7 million for his campaign. “But it's not so good tobe middle class in America.”

Long before Obama and Romney began sparring over the outsourcingissue, congressional Democrats have sought tax incentives forcompanies to create jobs in the U.S. instead of overseas. InSeptember 2010, a similar Democratic proposal had no support fromRepublicans and fell short of the 60 votes needed to advance in theSenate.

Bloomberg News

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