OUTSOURCING AMERICA

“When a good or service is produced more cheaply abroad, it makes more sense to import it than to make or provide it domestically.” This sentence promoting offshore outsourcing of jobs to countries with cheaper labor was not found in a multinational corporation’s prospectus. It was among the Bush administration’s prescriptions for improving the U.S. economy, presented to Congress in February in the “2004 Economic Report of the President.” In 400-plus pages, the report addresses a laundry list of some of the nation’s most pressing domestic issues, including jobs, healthcare, prescription drugs and entitlement programs. As reported in the Washington Post, the administration’s support for outsourcing was amplified by the president’s chief economist N. Gregory Mankiw at the release of the annual report: Offshoring of U.S. service jobs is only “the latest manifestation of the gains from trade that economists have talked about” for centuries. “Outsourcing is just a new way of doing international trade.” To view the report from the president’s Council of Economic Advisers, visit www.gpoaccess.gov/eop/index.html.
 

THE OTHER SHOE

Education could be facing even leaner times once the dust of the 2004 election settles, President Bush’s latest budget plan indicates. A series of program projections for future fiscal years, which are included in the administration’s budget plan for this year, shows that the White House expects education spending to immediately drop in 2006 and to fall to $63.6 billion in 2007, the Cleveland Plain Dealer reports. “That’s less than 1 percent above current spending, so with inflation it would represent a decrease,” the paper observes. “It’s also 4 percent less than Bush’s much-touted increase for [fiscal year] 2005.” The Washington, D.C.-based Economic Policy Institute (EPI) has blasted the budget as bait-and-switch politics tailored to an election year. There is “a pattern in the budget numbers where the appearance of increases is contradicted by the reality of long-term budget averages. In particular, the administration asks for immediate increases in politically sensitive spending, while at the same time reducing subsequent spending that undercuts its commitments for 2005,” EPI warns. And even the “good news” figures for fiscal year 2005 are anything but—38 education programs would be “zeroed out” in that year, the AFT points out.

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