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Bernie Legislation Aims to 'Make Sure That Donald Trump Keeps His Promise' on Outsourcing

Sen. Bernie Sanders (I-Vt.) speaks to reporters on Capitol Hill in Washington on Nov. 16, 2016. (AP Photo/Andrew Harnik)

Sen. Bernie Sanders (I-Vt.) said this weekend that he’s going to introduce legislation to ensure President-elect Trump keeps his campaign promises to keep American companies from taking jobs outside of the country.

Bernie’s bill would do that with massive taxes and stripping government contracts.

At issue is the move of Carrier air conditioning and heating company, which announced last February that it would move over a three-year period more than 2,000 jobs from an Indiana plant and distribution facility to Monterrey, Mexico, as a cost-cutting measure.

United Technologies, which owns Carrier, had already achieved savings by moving some operations to Poland and Mexico. After the February announcement, the company beat projections on first-quarter earnings. The company’s decision sparked protests in Indianapolis.

Trump frequently referenced the Carrier move on the campaign trail. Last week he tweeted, “I am working hard, even on Thanksgiving, trying to get Carrier A.C. Company to stay in the U.S. (Indiana). MAKING PROGRESS – Will know soon!”

Carrier replied: “Carrier has had discussions with the incoming administration and we look forward to working together. Nothing to announce at this time.”

“During the campaign, Donald Trump made a 100 percent commitment to prevent United Technologies from shipping 2,100 jobs from Indiana to Mexico. All of us need to hold Mr. Trump accountable to make sure that he keeps this promise,” Sanders said in a statement Saturday. “Let’s be clear: it is not good enough to save some of these jobs. We cannot rest until United Technologies signs a firm contract to keep all of these good-paying jobs in Indiana without slashing the salaries or benefits workers have earned.”

The senator argued that the company “is not going broke” but last year “made a profit of $7.6 billion and received over $6 billion in defense contracts.”

“It has also received more than $50 million in corporate welfare from the Export-Import Bank and very generous tax breaks,” he added. “In 2014, United Technologies gave its former CEO Louis Chenevert a golden parachute worth over $172 million. Last year, the company’s five highest paid executives made over $50 million. The firm also spent $12 billion to inflate its stock price instead of using that money to invest in new plants and workers.”

Sanders said Trump should use the defense contracts as leverage and “make it clear to the CEO of United Technologies that if his firm wants to receive another defense contract from the taxpayers of this country, it must not move these plants to Mexico.”

If United Technologies or any other company wants to move operations out of the country, he continued, “those companies must pay an outsourcing tax equal to the amount of money it expects to save by moving factories to Mexico or other low-wage countries.”

“They must pay back all of the tax breaks and other corporate welfare they have received from the federal government. And they must not be allowed to reward their executives with stock options, bonuses or golden parachutes for outsourcing jobs to low-wage countries.”

Sanders will be introducing the Outsourcing Prevention Act “to make sure that Donald Trump keeps his promise to prevent the outsourcing of American jobs.”

“For the sake of American workers, this is a promise that cannot and must not be broken,” he said.

Sanders’ office said his bill will keep companies that outsource jobs from receiving federal contracts, tax breaks, grants or loans; will take back federal benefits received over the past decade from companies that outsource jobs; and will impose an outsourcing tax “equal to the amount of savings achieved by outsourcing jobs or 35 percent of its profits, whichever is higher.”

For example, United Technologies estimates $65 million in savings by moving Carrier jobs from Indiana to Mexico, so the company would owe the government “a tax of no less than $65 million a year” under Bernie’s plan.

Sanders’ legislation would also “prohibit companies that offshore jobs from enriching executives through golden parachutes, stock options, bonuses, or other forms of compensation by imposing stiff tax penalties on this compensation. In addition, companies that outsource jobs overseas would be prevented from buying back its own stock.”

Trump tweeted Nov. 17 that he “worked hard with Bill Ford to keep the Lincoln plant in Kentucky. I owed it to the great State of Kentucky for their confidence in me!”

Ford, though, said it had no intention of closing the Louisville plant or eliminating jobs; both circumstances are covered by United Auto Workers collective bargaining agreements. The company had considered moving production of the Lincoln to Mexico and increasing Ford Escape production at the Kentucky plant.