Max Baucus, the Chairman of the Senate Finance Committee, said that he would not take up any of the three bilateral trade agreements (with Columbia, Panana, and South Korea) without action on expanded and reauthorized Trade Adjustment Assistance. The Chairman of the Senate Finance Committee is in a position to make a very credible threat.
In the past Baucus has also made it clear that a satisfactory Korean action on the beef import issue is also a pre-condition for letting the South Korean trade agreement move forward.
Baucus was speaking to a gathering at the Peterson Institute in Washington; here's the transcript of his remarks: Remarks Before the Peterson Institute Regarding Trade Adjustment Assistance (January 30, 2008):
Let me be very clear. This task [Trade Adjustment Assistance action - Ben], and no other, must be our nation’s trade policy priority. Until we accomplish it, other issues on today’s trade agenda must take the back seat. That includes congressional consideration of pending free trade agreements with Colombia, Korea, and Panama. I simply cannot support, or consider moving these agreements in the Senate, until we realize the goal of expanded and reauthorized Trade Adjustment Assistance.
Baucus detailed what he had to see in the reform before he'd let any trade bill free:
First, we must expand TAA to benefit service workers.... [currently only manufacturing workers are covered - Ben]
Second, we must make it perfectly clear that TAA covers workers whose firms have offshored production to countries that are not free trade agreement partners. ...[the current law has been interpreted as providing compensation for shifts in production to a country if the U.S. has a bilateral trade agreement with that country, so excluding China and India - Ben]
Third, we must expand the healthcare tax credit. That credit currently pays for 65 percent of a healthcare premium.... we must expand the existing healthcare tax credit from 65 to 85 percent....
Fourth, we must increase the training funds available to workers. Current law caps this amount at $220 million per year.... We need to double the current cap and reset it at $440 million....
And then there were some things that would be nice, but don't appear to be requirements:
Finally, we can make other improvements to the TAA program. We can allow trade-affected communities to benefit from targeted assistance. We can also make the TAA for Firms and TAA for Farmers and Fishermen programs more accessible and adaptable to today’s market realities. And we can make wage insurance and training benefits complement each other—rather than crowd out each other.
Finally,
Last summer, I introduced legislation with these important TAA reforms. I plan to mark up this bill in the coming weeks.
The Trade Adjustment Assistance program has a number of elements, including wage insurance and a health insurance tax credit, to ease the burden on people who lose jobs because of trade. The Peterson Institute offers a new policy paper by Howard Rosen, on the current assistance program and desirable reforms, as an event material: Strengthening Trade Adjustment Assistance (January 2008). Doug Palmer reports on the speech for Reuters: Bush trade deals must take back seat - senator (via The Guardian, January 30).
The Administration is receptive to some sort of action on assistance. Bush mentioned it in his State of the Union earlier this week. On the 30th, in an interview with the Wall Street Journal, he said he was open to legislation (Bush Ties Trade Agenda to Faster Growth, Gregg Hitt, January 31, 2008):
...he added that he is open to moving at the same time on legislation that would overhaul government assistance for workers who lose their jobs as a result of foreign competition.
"We can do both, by the way," Mr. Bush said. "We can debate trade agreements and come up with effective trade-adjustment programs."...
Finding common ground with Democrats on overhauling the government's program for workers who lose their jobs as a result of foreign competition could help build new support among lawmakers. The issue has been a point of increasing friction between the White House and Congress for several months.
Last fall, Mr. Bush threatened to veto a bill backed by Democrats that would have increased the number of workers able to qualify for assistance, bringing service workers into the program for the first time. The bill also would have loosened eligibility requirements.
In the interview, Mr. Bush said his "main goal" is to ensure federal assistance goes to workers who lose their jobs as a result of trade. He also said he would like to see a greater involvement by community colleges in retraining and wants to see improvements to the delivery of benefits. "I'd like to see our workers be given more say about where they spend their money," he said.
Some Democrats, including Senate Finance Chairman Max Baucus of Montana, have suggested they won't act on trade deals until legislation overhauling the worker-assistance programs in wrapped up.
Mr. Bush played down the idea that both initiatives would be tied together -- or considered in any specific order. But he emphasized his hope to work with Congress to resolve differences on worker assistance, while also working on the trade agreements. "They both stand on their own -- they're both important issues," Mr. Bush said. "The Colombia free trade agreement stands on its own merits. Helping workers who have lost jobs because of trade stands on its own merits."
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