Amid the ongoing debate over Outsourcing, a hot-button issue in the US, top Democratic Presidential hopeful Barack Obama has proposed denying tax reliefs to companies that ship job overseas but said that education system must improve to check the trend.

At a campaign event in Iowa, the Senator from Illinois was asked to comment on the loss of jobs which are heading overseas. "... this is something that is a top priority.... We're not going to reverse all this overnight, but there are a couple of.. common-sense steps, that I think all of us can agree on. Number one, we still provide tax breaks to companies that are sending jobs overseas. Let's put an end to that practice," he said.

"... we may not be able to stop a company from moving, but we can stop from providing him incentives to move" Senator Obama said.

Apart from revising the tax code to save tax breaks for companies that invest in the country, Obama also emphasised the need to shift the economy, infrastructure and, most importantly, education to deal with the challenge.

"...Number two, we've got to invest in the new areas that will produce well-paying jobs," the high profile Democrat fighting for the party nomination for 2008 said citing the energy sector where shifting from a fossil-fuel-based economy to a renewable-energy economy could lead to more jobs. 

"... Third thing, we've got to build infrastructure in this country. Everybody saw what happened with the bridge in Minneapolis." Obama said it would take about $1.6 trillion to rebuild all the ageing infrastructure in the country. "Now, in order for us to get that money, we've got to stop spending, as I said, USD275 million a day in Iraq."

"The final thing we need to do is education. The fact of the matter is that, no matter how much we do in investing in infrastructure and providing tax breaks, etcetera, the single most important criteria for whether or not an economy is going to be successful in this new global world that we live in is how skilled our workforce is," Obama said.

"Stop sending $8 billion a year in subsidies to banks and financial intermediaries on student loan programmes at the federal level. Take that $8 billion, cut out the middleman, and provide more grants and more low-interest loans for our students so that we can produce the engineers and the scientists that we're going to need for the future," he added.