Romney and ‘outsourcing’: Biden’s out-of-context fact

at 06:01 AM ET, 03/29/2012


(Kevin E. Schmidt/AP)

“Despite the fact that millions of taxpayer dollars were flowing to companies outsourcing state services like overseas call centers, he vetoed a bill passed by the Massachusetts legislature that would have stopped the state from outsourcing contracts overseas, state contracts…No, I really mean it. I mean, that’s one, when I was told about it, I said, ‘I’m not going to say that until you fact check that for me again.’ I mean, think about it. It’s one thing for the local company to outsource a call service, but for the state government to outsource a call service that’s set up to answer questions for people in the state about a problem they have with the government, to outsource that, denying folks in Massachusetts the jobs that are attended to that.”

— Vice President Biden, remarks in Davenport, Iowa, March 28, 2011

Since the vice president brought it up, let’s delve into some ancient Massachusetts history again.

We were dubious about this charge when the pro-Obama Super PAC claimed, in a slashing web ad, that American jobs were “relocated” when Mitt Romney was governor of Massachusetts. But it’s another matter when the vice president levels the charge – and says it’s been fact checked.

We always caution readers to be wary of claims made about particular votes — or in this case, a veto. What is the context for that person’s action?

The Facts

Several months before the bill had landed on Romney’s desk in 2004, the governor proposed a $29-million plan to curb outsourcing of jobs out of the state, according to a March 23 article on the front page of The Boston Globe. But the plan landed with a thud and did not get very far in the Democratic-controlled legislature.

Fast forward a few months. In June, a budget bill was sent to Romney containing a provision that would have prohibited Massachusetts from contracting with companies that outsourced the state's work to other countries.  A key concern was a $160,000-a-month contract with Citigroup to operate a system of electronic food-stamp cards that included a customer phone service center in India.

Interestingly, both the liberal editorial page of the Boston Globe and conservative editorial page of the Boston Herald urged Romney to veto the amendment.

The Globe said: “Another section that would discourage the state from doing business with companies that outsource work to foreign countries should be vetoed. The state contracting process is a poor tool to address globalization.”

The Herald was even more pointed, saying Romney was “hoist with one’s own petard” by launching the anti-outsourcing initiative in the first place. “These programs would cost more if those services weren't outsourced,” the Herald noted. “If he goes along with this anti-outsourcing amendment, Romney will demonstrate an utter lack of commitment to competition in government contracting.”

We’re not going to debate the merits of the bill, but it does demonstrate the conundrum before Romney. He could either try to ensure that some additional jobs were available to taxpayers — or he could try to save taxpayers some money. (The Globe reported that Kansas had tried to shift its food-stamp work from India, only to drop the idea when lawmakers learned it would boost the state’s costs by $640,000.)

Romney opted for the later course, saying the measure did not protect state jobs — the call center might have moved from India to another state — but “had the potential of costing our citizens a lot more money.” The Democratic-dominated Massachusetts legislature did not override his veto, even though it overturned 117 others, suggesting there was little real support for the measure.

It’s difficult today to get a handle on how many jobs were at stake. Proponents of the bill had touted a union study claiming that $7 million was spent on contract work overseas — but that’s a drop in the bucket compared to Massachusetts’s $24 billion budget at the time.

When the food-stamp contract expired, the Massachusetts Department of Transitional Assistance insisted that those jobs be returned to the United States. But they ended up in a call center based in Utah. According to articles in the local media, by 2006 (when Romney was still governor) there were just 18 jobs that remained in India, mainly to crunch Medicaid numbers.

 While Biden suggested that Massachusetts under Romney was unique in outsourcing jobs, “denying folks in Massachusetts the jobs,” a survey from the National Conference of State Legislators in 2004 (cited in a USA Today article that year) said that almost 40 states “outsource some work, including call centers, overseas where labor is cheaper.”

 Biden’s office referred us to the Obama campaign.

“The Vice President made it very clear: Romney had a chance to keep American jobs at home and he didn’t take it,” said Kara Carscaden, deputy national press secretary for the campaign. “Instead, he vetoed the bill and sent Massachusetts jobs and taxpayer money to India. If anyone deserves a Pinocchio, it’s Mitt Romney for calling himself a job creator.”

 

The Pinocchio Test

Biden has taken a single fact and blown it out of proportion, even in his speech trying to link the veto to a decline in manufacturing jobs in Massachusetts.

Yes, Romney may have vetoed a bill on outsourcing, but his decision was supported by the two main newspapers in the state. It also is telling that the Democratic-controlled legislature did not override Romney’s veto. In other words, not every veto is bad — or every bill is good.

Moreover, Massachusetts was not an unique case in trying to save taxpayer funds by shipping a relatively small number of such jobs to India or other countries — jobs that likely would not have ended up in Massachusetts in the first place.

The vice president should have asked for yet another fact check.

Two Pinocchios

 


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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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