WASHINGTON -- Stung by media reports of low-wage workers in India answering telephone queries from American food stamp recipients, legislatures in 31 states are considering measures to ban or restrict overseas "outsourcing" of government business.

		Special Report Read a series of articles by Post-Gazette staff writer Jim McKay about outsourcing and its effect on the Pittsburgh area.

The issue has just "snowballed" over the past year, said a spokesmen for the National Conference of State Legislatures, as state officials learned that some of their contractors were employing overseas workers to cut costs in government programs.

Pennsylvania is among the states where contractors use foreign workers to answer some calls from food stamp recipients, and Gov. Ed Rendell is backing efforts to discourage the practice by giving bidders for government business preferential treatment if they pledge to use American employees. Democratic state Reps. Mike Veon of Beaver Falls and Mike McGeehan of Philadelphia plan to introduce such legislation soon.

Congress also is delving into outsourcing, as well. A one-year prohibition on overseas outsourcing under many federal contracts was tucked into a massive spending bill signed into law earlier this year. Lawmakers say they will try in upcoming months to extend it.

"Our goal should be to create jobs and hire American workers," said Rep. Marcy Kaptur, D-Ohio. "It depends on how you measure economic growth. By hiring Americans, you create taxpayers. You pump money into your local economy."

But supporters of overseas outsourcing argue that it is a net plus for the American economy and for American workers, and that outsourcing government work lowers costs for taxpayers.

A new report commissioned by the Information Technology Association of America, for example, contends that "worldwide sourcing" of computer services increases the number of U.S. jobs and improves wages for U.S. workers.

"Far from being an economic tsunami that washes away domestic IT employment as some believe, global sourcing helps companies become more productive and competitive," said Harris Miller, president of the information technology group.

"The savings produced through worldwide sourcing are invested in new products and services, in new market expansion and, most importantly, in creating new jobs and increasing real wages for American workers."

Daniel W. Drezner, an assistant professor of political science at the University of Chicago, warns against raising too many barriers to outsourcing because it might provoke retaliation from other countries, who outsource more work to the U.S. than the U.S. outsources to them.

"Contrary to the belief that the United States is importing massive amounts of services from low-income countries, in 2002, it ran a $64.8 billion surplus in services," Drezner wrote in the May/June issue of Foreign Affairs

Susan Acker, a spokeswoman for the U.S. Food and Nutrition Service, which oversees the federal food stamp program, emphasized that "federal procurement rules do not prohibit the use of overseas contracts." The food stamp program is federal, but it is operated by the states.

"States have the authority to say 'no' to offshore call centers," Acker said. "States don't have to use them.

But many states are looking for more cost-effective ways to deliver food stamps and cash assistance benefits. Other states are taking action to keep customer service calls in this country."

A 50-state survey conducted last August by a North Carolina newspaper, the Charlotte Observer, found that most states have contracts with companies that use overseas workers to answer questions from food stamp recipients.

At the time, 33 states, including Pennsylvania, had contracts with Citicorp Electronic Financial Services, Inc., which since has been acquired by J.P. Morgan. Thirty of the programs employed foreign workers, while two states -- Nevada and New Mexico -- operated their own call centers and used foreign desks only for off-hours calls.

Eight other states had contracts with Arizona-based eFunds Corp., and eight of the nine used foreign workers, the newspaper said. Nine additonal states, including Ohio, used domestic call centers.

Nearly 10 million Americans receive food stamps and use an electronic benefits, or EBT, card, which operates like a debit card.

The Observer survey found that most of the more than 20 million calls placed each month by food stamp recipients about benefits were handled by automated message centers, while employees in call centers took calls about stolen EBT cards.

The Observer found that call center employees handled about 700,000 calls each month.

Clearly, overseas outsourcing of calls from U.S. food stamp recipients is an issue that resonates with the public, said Justin Marks, a policy analyst with the National Conference of State Legislatures. "Just three years ago, no states were dealing with this issue.

Now 31 states are concerned about it.

"State legislatures have this dilemma," Marks said. "Do they spend more money to keep these jobs at home while they're in the largest fiscal crisis since World War II, or do they let it go and try to save money? No one has yet done a comparison of the costs to the state vs. the costs of sending the jobs overseas."

Job outsourcing also has become a hot issue in the presidential campaign. Gregory Mankiw, who chairs President Bush's Council of Economic Advisers, recently sparked a political firestorm when he suggested that outsourcing was a good thing for the U.S. economy.

Treasury Secretary John Snow nevertheless followed up with similar comments.

Although the Bush re-election campaign has distanced itself from such remarks, Sen. John Kerry, D-Mass., the presumed Democratic presidential candidate, has jumped on them to promote his own efforts to limit outsourcing in government contracts.