No tax breaks for outsourcing jobs: Obama

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Keeping up his tirade against outsourcing, US President Barack Obama said on Saturday that firms shipping jobs off shores should be denied tax breaks if manufacturing is to be brought back to America and employment is to be raised.

Speaking in his weekly radio address to the nation, Obama said all tax benefits should go to companies that produce jobs inside the country.

He said such a move is essential to not only bring back jobs to the United States but also make manufacturing in America competitive.

"No company should get a tax break for outsourcing jobs. Instead, tax breaks should go to manufacturers who set up shop here at home. Bigger tax breaks should go to high-tech manufacturers who create the jobs of the future," Obama said.

Obama has for long campaigned against outsourcing of jobs, something that would hit Indian companies hard.

Obama's increasing pitch is indication enough that the issue might become a hot topic in the run-up to November polls.

The aftermath of the economic crisis has seen the current of opinion against outsourcing grow in the US. In fact, a bipartisan bill has been tabled in the US House of Representatives to make companies that move call centres overseas ineligible for grants or guaranteed loans from the federal government, a move aimed at stemming the tide of jobs heading to nations like India.

The Indian IT sector, which gets 60 per cent of its export revenue from the US, has come out strongly against US moves to stop outsourcing.

Addressing Americans from the Boeing Plant in Everett, Washington State, Obama described how the government can support businesses like Boeing, which is hiring thousands of Americans across the country, through steps like removing tax breaks for companies that send jobs overseas and giving them to companies that create jobs at home.

"I'm speaking to you this week from the Boeing Plant in Everett, Washington. Boeing has been in this community for half a century. But it's what they're doing here today that has folks really excited; because at this plant they're building the plane of the future – the Dreamliner," Obama said.

"It's an impressive sight. And, to be honest, part of why I came was to see it up close. But I also came because this is a great example of how we can bring jobs and manufacturing back to America," he said.

Air India has also placed orders for Dreamliner. In fact one of the Dreamliner with Air India logo was there at the Boeing facility when Obama visited it on Friday.

Obama said new technology has made businesses more efficient and productive – and that's good – but it's also made a lot of jobs obsolete.

"But that doesn't mean we have to settle for a lesser future. I don't accept that idea. In America, there's always something we can do to create new jobs and new manufacturing and new security for the middle-class. In America, we don't give up, we get up," he asserted.

"Right now, that's exactly what we're doing. Over the past 23 months, businesses have created 3.7 million new jobs. And manufacturers are hiring for the first time since the 1990s. It's now getting more expensive to do business in places like China."

"Meanwhile, America is more productive than ever. And companies like Boeing are realising that even when we can't make things cheaper than China, we can make things better. That's how we're going to compete globally," Obama said.

Obama said Boeing's business right now is booming. Last year, orders for commercial aircraft rose by more than 50 per cent.

To meet that rising demand, they've put thousands of folks to work all over the country, he said. The United States, he said, needs to strengthen American manufacturing.

"We need to invest in American-made energy and new skills for American workers. And above all, we need to renew the values that have always made this country great: Hard work. Fair play. Shared responsibility," he said.