Kerry's "Plan for America"

by Rob Sanchez
August 03, 2004 - No. 1071


Presidential hopeful John Kerry just published a 263 page "Plan for
America". Go here to see it:

It's a long document that contains no direct reference to H-1B.
Considering the length of the document it's disappointing that so
little is said about such an important topic. In addition to avoiding
H-1B, Kerry skirts most issues of outsourcing and immigration.

This is a summary of Kerry's plan as it pertains to nonimmigrant visas
and offshoring.

1 - Kerry supports the H-1B program and believes there are shortages of

2 - Kerry will give amnesty for "undocumented workers" who have worked
in the United States for 5 years. I assume this would include most
out-of-status H-1B and L-1 visa holders.

3 - Kerry will remove some minor tax breaks given to companies that
move overseas.

4 - Kerry will give a huge tax break to almost all American
corporations, including those that employ H-1B and L-1 visa holders,
and "undocumented workers", and those that employ foreign workers

The rest of the newsletter discusses each of these four points in more
detail. I don't pretend to have read the entire document so there are
probably more passages of interest that may be discussed later.

1 - Does Kerry support H-1B?

All politicians who support H-1B and/or L-1 say that a better job
should be done to protect American workers. These promises are nothing
but "feel good" rhetoric to placate angry workers. We need better
enforcement of the regulations, but enforcement alone cannot compensate
for the fact that these guest-worker visa laws are full of loopholes
that were intentionally put in to give companies the ability to reduce
salaries by replacing American workers. The statement below by Kerry
has been repeated by every major politician that has voted for H-1B:

"Our worker visa system should be fixed so it protects the wages
and working conditions of U.S. workers and temporary workers.
(p 214)

Kerry believes that the U.S. is falling behind China and India because
they graduate more engineers. Kerry doesn't consider the quality of
those engineers - only the total number and he then stretches logic by
concluding that we have a shortage. These countries have vastly larger
populations so it stands to reason that they will graduate more
students of all kinds. That doesn't mean that we are falling behind
anymore than it means that Germany or Switzerland are falling behind us
because the U.S. graduates more students.

Today, Americans compete with workers on every continent.
Information flows across oceans. High-wage jobs are
more dependent than ever on high-level skills. In America,
60,000 engineers graduate a year - about one-tenth the
number produced by India and China. No wonder we are
falling behind in the competition for high-skill jobs.
(p 88)

The last sentence in the following paragraph is a wholesale endorsement
of H-1B. It sounds very similar to the numerous editorials that have
been recently planted by CompeteAmerica that want to exempt foreign
students from the H-1B cap. Kerry seems to think that Bush is putting
too many restrictions on H-1Bs despite the fact that Bush wants H-1B to
be unlimited. Kerry doesn't say specifically why he thinks Bush is
restricting H-1Bs but seems to be complaining about the new security
screening being done for workers who are applying for H-1B visas and
foreign students who want visas to go to our universities. It's not
clear if Kerry understands that H-1B and student visas have been used
by terrorists, or perhaps he doesn't care.

President Bush and his administration are compromising
our future on each of these counts. [snipped]
By employing inappropriate immigration practices,
they are turning critical scientific talent
away from our shores. (p 86)

2 - Does Kerry support amnesty?

Democrats and Republicans tend to support amnesty for different
reasons, at least as far as their rhetoric is concerned. Republicans
tend to use faith-based trade rhetoric, while Democrats tend to use "we
are the world" blabber. Rhetoric aside, their real agenda is strictly a
corporate cheap-labor agenda. Kerry wants to help everyone in the world
with opportunity but he doesn't seem to see a distinction between U.S.
citizens and everyone else. Globalists such as Kerry tend to view all
workers in the world as equal and therefore think that it doesn't
matter where jobs are created.

He will recreate an America that provides opportunity
to all at home or abroad who can help us make
progress together. (p 86)

Kerry avoids addressing H-1B directly, but not so with amnesty. He
thinks that if illegal aliens have paid taxes for five years they
should get amnesty. Kerry probably didn't question how these
"undocumented workers" pay taxes without making fraudulent social
security cards. Since out-of-status H-1B and L-1 visa holders probably
meet the 5 year criterion it's probably safe to assume that Kerry wants
to give them amnesty also.

We support giving undocumented workers who have lived and
worked here for five years, who pay taxes, and who are
successfully screened for security purposes, a path to
citizenship. (p 38)

3 - Will Kerry penalize the offshorers?

Kerry's plan to cut some tax loopholes for companies that move overseas
sounds like a "get tough" attitude, but it's all bluff and very little
substance. These tax deferral's will not discourage companies from
going overseas as long as foreign labor is 1/10th the cost of labor in
the United States. Lou Dobbs has often made the comment that most of
these companies don't pay taxes so Kerry's removal of taxes is somewhat
meaningless. If offshoring companies have to pay a few more taxes they
will just consider it another cost of doing business overseas.

Close the foreign tax deferral loophole that encourages
companies to send jobs overseas,

The tax loopholes that Kerry wants to close is not going to discourage
companies from going overseas because it's a minor part of the tax
breaks that corporations get.

This, in a nutshell, is why John Kerry's proposal to reduce the export
subsidy will have almost no effect on the offshoring of U.S. jobs:

But GE's clout stands out. Of one provision eventually
worth $2 billion a year, GE will reap an "overwhelming
percentage," said John Buckley, chief tax counsel for
the Democratic staff of the House Ways and Means Committee.

"They're getting a lot more out of this than they ever
had" from the export subsidy.

(to learn more about this, read the newsletter "GE Lobbyists Mold Tax
Bill" July 15, 2004 - No. 1055)

4 - Will H-1B employers get a tax break?

Kerry puts very few restrictions on this massive tax subsidy to rich
corporations. Since Kerry didn't specifically disqualify companies who
employ foreign labor by using guest-worker visas and "undocumented
workers", and since Kerry doesn't have a problem with the hiring of
foreign workers, I assume that these employers will qualify for Kerry's
corporate hand out. Most surprising is that Kerry's tax break doesn't
appear to disqualify companies that outsource to foreign countries as
long as they hire a few people in the U.S.

Second, I will invest the savings from reform in new
incentives to create new, good paying jobs here and to
lower corporate taxes by 5% to make all our companies
more competitive.

Conclusion: This letter should in no way imply that I endorse Bush or
Kerry. I think we all need to examine both candidates objectively
before we decide who to vote for. So far I cannot see a
dimes-worth-of-difference between them on the issues of immigration,
nonimmigrant visas, or offshoring. Since Bush is not about to change
his attitudes on these issues it still seems that Kerry is the only
hope for change, but only if he can be convinced that his pro H-1B and
amnesty policies are not popular with the public and could cost him the


If you call, be sure to insist that the H-1B limits should be lowered,
not raised. Do not let them get away with telling you that Americans
are somehow protected against replacement or salary degradation. If his
campaign people continue to plead that they don't know what H-1B is,
tell them that Kerry voted in the year 2000 to raise the yearly cap on
H-1B to 195,000 - and then ask why they haven't heard of it.

Kerry campaign headquarters is at: (202) 712-3000.

Email is less effective but give it a try.

Document your experiences when you call because I may use them for
future newsletters. Be sure to indicate to me whether you wish to
remain anonymous.

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