A Senate deal on extending some Obama stimulus aid for workers whose jobs move overseas could break a political logjam blocking free trade agreements with South Korea, Colombia and Panama.
The trade agreements all signed in the George W. Bush administration, enjoy broad support, but have never reached a congressional vote because of demands from the White House and Democrats that Congress at the same time renew 2009 economic stimulus act provisions that expanded the Trade Adjustment Assistance program. Those provisions expired last February.
Republicans have resisted, saying the worker aid program costs too much and it is wrong to link the trade and aid measures.
That impasse moved closer to being overcome late Wednesday when Senate Majority Leader Harry Reid and Republican leader Mitch McConnell said they had agreed on a "path forward" on renewing the worker aid program. Reid said that passage of that measure would be followed by votes on the three trade agreements.
House Speaker John Boehner then announced that he was ready to pass the trade bills in tandem with separate consideration of the worker aid bill when Congress returns from its August recess.
The stakes are considerable: the trade agreement with South Korea would be the biggest since the 1994 passage of the North American Free Trade Agreement, with estimates of 70,000 new jobs created by increased U.S. exports. The deal with Colombia would cement political ties with one of America's staunchest allies in South America. Combined, the three deals could increase U.S. exports by $13 billion a year.
Business groups have clamored for action on the trade deals, and pressured lawmakers to resolve their differences over the assistance program. "Time is short and further delays are unacceptable," said U.S. Chamber of Commerce president and CEO Thomas J. Donohue, He noted that in just two weeks after a European Union-South Korea free trade agreement went into force on July 1, European exports to Korea rose 16 percent while the U.S. market share fell.
But Democrats have long been leery of free trade accords, saying they make it easier for U.S. manufacturers to relocate in cheap labor countries, and insisted that they be accompanied by enhanced protections for American workers.
The Trade Adjustment Assistance program was created in 1962, during the Kennedy presidency, to help displaced workers with retraining and financial support. Last year the program, which also helps companies undercut by foreign competition, had about 235,000 participants and cost nearly $1 billion.
As part of the 2009 stimulus act, the program was significantly expanded to make workers in service industries and the public sector eligible, increase training funds, boost subsidies to buy health care and open eligibility to workers whose firms shift production to any country, including China or India.
President Barack Obama and Democrats sought to make renewal of these provisions part of the South Korea deal, but Republicans refused, saying the expanded benefits were too expensive, unfairly picked winners and losers among the unemployed and shouldn't be forced through on a trade bill.
A month ago some progress was made in resolving the dispute when Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Dave Camp, R-Mich., came up with a compromise to partially restore the 2009 benefits.
Income support, which was available for up to 156 weeks under the 2009 law, would be trimmed to a maximum of 130 weeks and the health care tax credit would go from the current 80 percent to 72.5 percent and be eliminated after 2013. It would deny eligibility to public sector workers and cut the entire cost of the 2009 measures by more than half, to about $320 million a year for three years.
Then, two weeks ago, a dozen Senate Republicans, in a letter to Obama, pledged that, in exchange for action on the trade bills, they would not participate in filibusters or any other effort to block the worker aid bill, assuring that it could move to a final vote and, with overwhelming Democratic support, passage.
With the Reid-McConnell agreement Wednesday, U.S. Trade Representative Ron Kirk issued a statement saying that the administration "looks forward to working with leaders of the Senate and House after Congress returns in September to secure approval of these important initiatives for America's working families."
Carol Guthrie, the assistant U.S. trade representative for public and media affairs, said it was significant that Boehner "has now clearly committed to floor consideration of TAA along with the trade agreements" and said the Senate deal was an important step in preparations for the administration to formally submit the pending agreements to Congress.
But she also cautioned that "some sequencing details remain to be worked out," to ensure that the worker aid bill gets a fair shake in the House.
Top Democrats on the Ways and Means Committee, which handles trade issues, were stronger in insisting that there be guarantees in place before the trade and aid bills move. "The path forward in the House as well as the Senate must be ironclad in its assurance that TAA will be renewed," said Reps. Sander Levin, D-Mich., and Jim McDermott, D-Wash., in a joint statement. "Otherwise, TAA should be attached to the Korea free trade agreement."