(IANS) Barack Obama is a man in a hurry and his remarks related to India, especially its BPO sector, has been inviting trouble since he took charge. His latest proposal to give tax breaks to firms that set up shops at "Buffalo instead of Bangalore" would dramatically affect American jobs and investment, a new economic report has warned.

As many as 2.2 million American jobs could be affected by a repeal, or effective repeal, of "tax deferral", warns the report authored by Robert J. Shapiro, a former Clinton Administration economic official, and Aparna Mathur, a Research Fellow at the American Enterprise Institute.

The report, commissioned by the Technology CEO Council, a Washington-based advocacy group of US American tech-companies, also found that besides affecting jobs, investments in the United States in plant, equipment and property could fall by as much as $84.2 billion.

Repealing or sharply limiting deferral would not generate large tax revenues, since substantial job losses, wage cuts and lower investments would reduce tax revenues, it said.

Congress is now considering legislation that would sharply limit the "deferral" rules that protect US businesses from bearing much higher tax burdens on their earnings abroad than their foreign competitors in the same markets.

The key to these results is evidence showing that in modern global companies, new investment and job creation in foreign subsidiaries are closely linked to new investment and job creation by the parent companies in the United States, the report said.