Senate Democrats' target: Outsourced jobs

By Jennifer Liberto and Dana Bash


WASHINGTON (CNNMoney.com) -- Senate Democrats plan to propose legislation this week aimed at cracking down on companies that move jobs offshore, congressional sources tell CNN.

Senate Democrats plan to force a vote on legislation next week that would create a payroll tax break for companies that hire U.S. workers in place of foreign workers. The bill would also raise taxes for companies that move jobs and plants overseas.

Details are scarce on the specifics of the tax breaks and penalties. But Senate Majority Leader Harry Reid, D-Nev., set the procedure rolling Tuesday evening, in a move that could force a vote on the issue next week, according to congressional records.

With less than two weeks left before the Senate breaks for the fall elections, Democrats have been working to squeeze in couple of votes that could help them in November, even if they don't get past a Republican filibuster. Democrats are also trying to get a vote on extending middle class tax cuts that are set to expire at the end of the year.

Under the incentive program, employers could get a two-year break on their Social Security payroll taxes on wages paid to new U.S. employees who have been hired to replace workers doing the same job overseas, according to a congressional summary. Employers would be eligible if they hire new employees during a three-year period starting Sept. 22.

The penalties would prevent companies from taking a tax deduction, loss or credit if they end business in the United States and start a similar one overseas. The bill allows firms to apply to the Treasury Secretary to appeal the tax penalty for moves overseas that don't result in loss of U.S. jobs.

The other tax penalty would target the ability for U.S. companies to defer taxes on income earned by foreign subsidiaries until that income is brought back to the United States. The legislation would repeal the tax deferral for firms that reduce or close a business in the United States and start or expand a similar business overseas.

It's unknown how much the proposals would cost and how much money the new tax penalties would raise, as the Joint Committee on Taxation hasn't analyzed the proposal yet.

Republicans have been against raising taxes, especially given the sputtering economic recovery.

Senate Democrats met last week with senior White House officials to talk about messaging that pushed "Made in America," and policies that would stop jobs from moving overseas.

Earlier this month, President Obama proposed a jobs creation proposal that aimed to invest money in infrastructure while closing tax breaks for overseas companies.

Jennifer Liberto is a senior writer at CNNMoney.com. Dana Bash is senior congressional correspondent at CNN. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 1:20am ET
Company Price Change % Change
Bank of America Corp... 16.15 0.02 0.12%
Facebook Inc 58.94 -0.78 -1.31%
General Electric Co 26.56 0.44 1.68%
Cisco Systems Inc 23.21 0.18 0.78%
Micron Technology In... 23.91 1.43 6.36%
Data as of Apr 17
Sponsors

Sections

General Mills has scrapped a controversial change to its fine print that some read as eliminating customers' right to sue the company. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Office for iPad move is a symbolic victory for Nadella's Microsoft, but the company is still weighed down by many of the same old issues. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

Getting people to donate money is a big business, and some universities, hospitals and other nonprofits are rewarding their top fundraisers with as much as $1 million to bring in the big bucks. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.