Washington: With former Vermont Governor Howard Dean dropping out of the race for the Democratic Party's Presidential nomination, the battle is now between two US Senators - John Kerry of Massachusetts and John Edwards of North Carolina - who have made outsourcing of jobs to countries like India a major issue in the election year.

Both see in outsourcing of White Collar jobs and offshoring of capital to create Blue Collar jobs a major issue and they are using India, China and Mexico as attractive targets to whip up votes.

Leading non-resident Indian (NRI) economist Jagdish Bhagwati doesn't think they mean it because it makes no sense in this irreversible age of globalism and competitiveness, but the two are using the issue for what it is worth.

Edwards said during a debate in Milwaukee, "I will stand up and fight every way I know how to protect these (US) jobs."

Economists point out that American companies will lose their shirts to foreign competitors if they do not outsource some jobs and offshore some capital, but in the din of the election battle, their voices of sanity and reason are being drowned.

Larry R Langdon, former head of the Internal Revenue Service's large and mid-size business division, pointed out that the reason why there is outsourcing to countries like India and China is the emergence in these countries of well-educated, English-speaking workers, improving infrastructure, growing political stability, rapidly improving Internet and telephone and transportation links.

Langdon and others do not see why American business and industry should be at a disadvantage and lose business to foreign companies by not utilizing those facilities.

Both Kerry and Edwards have charged that tax law rewards expansion overseas. Both have said they would cut taxes for domestic manufacturing and offer temporary tax credits for hiring manufacturing workers in the United States.

Many economists and some business officials, the 'Washington Post' notes, agree that companies are reaping tax benefits from overseas expansion.

However, said the paper, "Virtually no one would say that taxes are a primary - or even a significant - factor in the movement of as many as 3,00,000 White Collar jobs and many more manufacturing jobs abroad in the past several years."

No matter how sweet the tax incentive is to expand in India, for instance, it could not be more enticing than lowering a software developer's pay from $ 60 to $ six an hour, a figure cited by the consulting firm McKinsey and Co.

"I don't think you can say it's the tax code that is pushing jobs abroad," said Michael J Murphy, a tax lawyer.

Kerry said Government contracts, when possible, should go to US-based businesses, and call centre phone operators should at least be required to identity what country they are in.

"Outsourcing," a Kerry aide told the 'Post', "is a new phenomenon. We don't really have a clue what is going on."

Roger C Altman, chairman of the Wall Street investment firm Evercore and a Kerry economic adviser, said some jobs for which the wage differences are vast would not be saved. But, he said, an "integrated response focused on taxes and lowering business costs will save certain jobs that are susceptible to a competitive response".