Dems Propose Cutting Tax Breaks to Outsourcers

House Democrats are unveiling an election-year plan to stem the loss of jobs overseas, encourage high-skilled employment at home and ease the pain the global market can inflict on American workers.

Officials said the cost of the proposals, $125 billion over 10 years, would be covered by repealing tax breaks that go to firms sending jobs overseas.

House Democratic Leader Nancy Pelosi (search) arranged a midmorning news conference to detail the "American Jobs Plan," developed by selected lawmakers and designed to be a package that all Democrats can embrace heading into the general election campaign.

"To stop the hemorrhaging of American jobs, we must close these tax loopholes (search), invest in our people and create the new technologies that will lead to tomorrow's jobs," the California Democrat said in advance of the news conference.

"Our economy is at a crossroads, and the House Democrats' American Jobs Plan (search) will put us on the right path."

The economy has created 1.2 million jobs this year, but 1.2 million more Americans are unemployed than when President Bush took office.

That, coupled with the steady flow of manufacturing jobs overseas, has helped make "outsourcing" a key issue for Republicans and Democrats alike in the campaign for the White House and Congress.

Democrats must gain 12 seats to win control of the House in the fall and end a decade in the minority. While they remain the underdogs, recent nationwide polling indicates support for Republicans has declined.

The Democratic program features a new tax credit to give businesses $3,000 for each job created in the United States by industries affected by outsourcing (search). The two-year cost was put at $18 billion.

The plan calls for spending an additional $40 billion over the next decade for science, engineering and math research and development, designed to create new technologies that can lead to high-paying jobs.

Democrats also propose spending $34 billion over the next 10 years to rebuild highways, transit systems and other infrastructure, a commitment that officials estimated would create more than 2 million jobs.

The proposal also includes a gradual doubling in student Pell Grants (search) to $11,600 by 2011; an expansion of job training programs; and renewal of an expired program of federal assistance for the long-term unemployed.

Additionally, Democrats propose broadening the federal program that helps workers whose have lost jobs that went overseas, at a cost of $5.9 billion over 10 years.

Democrats have little or no expectation that their plan can be enacted this year, since they are in the minority in the House and have limited ability even to bring measures to a vote.

At the same time, the package is designed as a rallying point for Democratic incumbents and challengers, and also to help illustrate differences with Republicans.

Democrats are expected to seek a vote later this week on the jobs tax credit, for example, as an alternative to a Republican proposal that many Democrats say is too generous to large corporations.

While most of the Democratic proposals cover 10 years, the tax credit would expire after two. Given their other priorities, proposing a 10-year credit would have required Democrats to find other sources of revenue, cut spending or accept an increase in federal deficits.