Unions Press Clinton on Outsourcing Of U.S. Jobs

By John Solomon and Matthew Mosk
Washington Post Staff Writers
Saturday, September 8, 2007

When Sen. Hillary Rodham Clinton flew to New Delhi to meet with Indian business leaders in 2005, she offered a blunt assessment of the loss of American jobs across the Pacific. "There is no way to legislate against reality," she declared. "Outsourcing will continue. . . . We are not against all outsourcing; we are not in favor of putting up fences."

Two years later, as a Democratic presidential hopeful, Clinton struck a different tone when she told students in New Hampshire that she hated "seeing U.S. telemarketing jobs done in remote locations far, far from our shores."

The two speeches delivered continents apart highlight the delicate balance the senator from New York, a dedicated free-trader, is seeking to maintain as she courts two competing constituencies: wealthy Indian immigrants who have pledged to donate and raise as much as $5 million for her 2008 campaign and powerful American labor unions that are crucial to any Democratic primary victory.

Despite aggressive courtship by Democratic candidates, major unions such as the AFL-CIO, the Teamsters and the Service Employees International Union have withheld their endorsements as they scrutinize the candidates' records and solicit views on a variety of issues.

High on the agenda of union officials is an explanation of how each candidate will try to stem the loss of U.S. jobs, including large numbers in the service and technology sectors that are being taken over by cheap labor in India. During the vetting, some union leaders have found Clinton's record troubling.

"The India issue is still something people are concerned about. Her financial relationships, her quotes -- they have both gotten attention," said Thea M. Lee, policy director for the AFL-CIO.

Facing a cool reception, Clinton and her advisers have used closed-door meetings with labor leaders in recent months to explain her past ties to Indian companies, donors and policies. Aides have highlighted her efforts to retrain displaced workers and to end offshore tax breaks that reward companies that outsource jobs.

But the Clinton camp has been pressed by labor leaders on her support for expanding temporary U.S. work visas that often go to Indians who get jobs in the United States, and it has been queried about the help she gave a major Indian company to gain a foothold in New York state. That company now outsources most of its work to India.

"They're obviously defensive about it," observed Lee, who has taken part in such meetings.

Clinton declined repeated requests for an interview about her views on outsourcing. Her campaign advisers, however, say she believes there are no inconsistencies in the comments she has made here and in India or in her actions as a senator.

They say she opposes legislative measures -- such as trade barriers -- to slow the loss of American jobs if they would restrain free trade. And they say she has supported the expansion of the temporary-worker visas because U.S. technology companies have repeatedly told her the visas are needed to maintain a ready workforce.

At the same time, they say, she has worked hard to secure money to assist workers who have lost jobs to outsourcing and wants to retrain the American workforce to compete better in the global marketplace.

Clinton "believes that we must make sure that we are not allowing other countries to take advantage of American workers and that we do not have policies in place that actually promote outsourcing of American jobs," spokesman Philippe Reines said.

Her rivals for the Democratic nomination have monitored her every comment on the issue. Last year, the India Abroad newspaper reported that she joked to a group of Indian American donors that she could easily win a Senate seat if she were running in the Indian state of Punjab. An aide to her chief foe in the Democratic contest, Sen. Barack Obama (Ill.), parodied those remarks in a document distributed to reporters; it listed her political affiliation as "D-Punjab."

At a recent event in Los Angeles, host Nadadur Vardhan told those gathered that they should support Clinton because "she may shift more jobs to India," according to an Indian news account. Asked about the remarks, Vardhan told The Washington Post: "That's not our goal. Our goal is to support her because she is best for this country."

Obama and former senator John Edwards (N.C.), who trail Clinton in the polls, have sought to attack her record on outsourcing while arguing that they support more direct government intervention to protect U.S. jobs.

Clinton's camp counters that Obama and Edwards have acknowledged that some loss of American jobs is inevitable in a global economy. Edwards, for example, told a New Delhi conference in 2005 that outsourcing was "an economic reality" and "America must act to ensure that it stays strong and adapts . . . to ensure that the American people are better prepared to meet the challenges of the new world." And Obama said just two months ago: "We know that we can't put the forces of globalization back in the bottle. We cannot bring back every job that's been lost."

When Clinton told a union-sponsored debate last month that the nation needed a "better approach" to globalization and trade, Edwards railed against the North American Free Trade Agreement that President Bill Clinton's administration signed in 1993, saying it compromised "millions of jobs." Obama chimed in that "people don't want a cheaper T-shirt if it's costing us jobs."

Clinton recently pleaded with her allies in the Indian American community to press Indian companies to invest more in the United States in return for the jobs they have gained through outsourcing -- or risk a backlash.

"If the United States continues to outsource jobs to India in increasingly large numbers, people will begin to feel insecure and may very well seek more protection against what they view as unfair competition," Clinton told Indian technologists during a July speech in Santa Clara, Calif. "America is not just a marketplace to get a foothold in. It's a place to make lasting investments that will create jobs and economic growth for everyone."

Clinton's positioning on outsourcing dates to the 1990s, when her husband's administration aggressively pursued free trade agreements such as NAFTA that union workers today consider the start of a huge exodus of U.S. jobs to cheaper overseas competition.

During the rise of the Internet, the Clinton administration also distributed temporary-worker visas to hundreds of thousands of Indians who came to the United States for jobs at high-tech companies.

Both Clintons made repeated trips to India -- visits that continued during Hillary Clinton's tenure in the Senate. Between them, Bill and Hillary Clinton have made eight visits to India since 2001, and many more to Indian American groups in the United States.

"Just look back," said Sanjay Puri, who heads the nation's largest Indian American fundraising committee. "The Clintons made a special effort. They went to India. They made a real attempt to reach out to Indian Americans at a time when no one else had done that."

As Clinton pursued a Senate seat in 1999, the Indian American community stepped up its giving. Indian businessman Sant Singh Chatwal raised $500,000 for her in his Upper East Side penthouse, including $210,000 from 14 entities connected to him. Chatwal is now a finance co-chairman for Clinton's presidential campaign, and Clinton aides said they have counted more than $2 million in contributions raised at Indian American events.

Some Indian American connections have benefited the Clintons personally, too. Vinod Gupta, the founder of a Nebraska data-mining firm, has donated more than $1 million to the Clintons' political causes while also paying the former president at least $3.3 million as a business consultant.

Gupta hosted Bill Clinton at the dedication and groundbreaking of the two-story Hillary Rodham Clinton Mass Communication Center he is building on the campus of a women's technical school in rural India. The institution is designed to train India's workforce to better compete in the global marketplace.

Among labor officials, a nagging question about Hillary Clinton's commitment to protecting U.S. jobs stems from a deal she helped broker for Tata Consulting, one of India's largest technology firms. In 2002, Clinton helped Tata land an agreement to open an office in New York state and to work with a Buffalo area university to create at least 100 jobs in the depressed community.

But today, Tata employs just 10 workers at the New York training center while sending much of its work to its predominantly Indian workforce, which includes many on temporary U.S. visas.

Tata is one of the largest users of the temporary-worker visas that have allowed U.S. technology companies to fill jobs with high-skilled, lower-paid Indian workers. It used nearly 8,000 such visas last year, according to a recent Senate report.

As a senator, Clinton has repeatedly supported that program and backs raising the cap for annual visas from the current 65,000 to 115,000.

Today, Clinton's office plays down the Tata deal that she once trumpeted. "Senator Clinton's priority has been to support local businesses and entrepreneurs in order to spur job creation and economic growth throughout New York state, and this is just one of the literally hundreds of cases where she did so," Reines said.

Staff researchers Alice Crites and Madonna Lebling contributed to this report.

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