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Thursday, 12 June 2008 03:49 |
CNN Money
Tom Barkley
Original Publish Date: June 11, 2008
Washington - U.S. business groups are throwing their weight behind legislation to help workers displaced by trade, hoping to break partisan deadlock on the broader trade front.
By helping to get trade-adjustment-assistance legislation passed, businesses would clear a major hurdle to get to the real prize - free trade agreements with Colombia, South Korea and Panama.
The Trade and American Competitiveness Coalition held an event Wednesday to launch its campaign for trade-adjustment assistance, or TAA.
Senate Finance Committee Chairman Max Baucus, D-Mont., who co-sponsored a TAA bill last year with Sen. Olympia Snowe, R-Maine, said at the event that the backing of the coalition will provide momentum to hopefully get a bill passed this year.
A similar bill passed by the House last year - which also included some controversial measures absent from the Senate version - drew a veto threat from the White House. So Baucus and the ranking Republican on the committee, Chuck Grassley of Iowa, are working with the White House to structure a compromise bill for the Senate.
Baucus said they are getting "quite close" to an agreement. The White House realizes "it's the right thing to do," he said, and that TAA is needed before Congress will take up the free-trade agreements.
Democratic leaders in Congress have made TAA a precondition for voting on the free-trade agreements, though House Speaker Nancy Pelosi has signaled that she also wants to see additional economic stimulus and a drop in violence against unions in Colombia before freeing up a trade deal with that country for a vote.
Baucus cited "some progress" in Colombia, but said the fate of the South Korea trade pact could hinge on how the country's government deals with massive protests over a recent agreement to open its markets to U.S. beef. The beef deal, which the Korean government is seeking to modify with the U.S. to assuage concerns back home, had removed one big obstacle to support from Baucus and other lawmakers for the broader free-trade pact.
"The ball's in their court, it's up to them to decide what they want to do," Baucus told reporters after the event.
Sarah Bovin, director of government relations at Whirlpool Corp. (WHR), said at the event that TAA has been helpful to employees laid off at some of the company's facilities.
"TAA is essential to restoring faith in the trade debate," said Bovin.
Bill Reinsch, president of the National Foreign Trade Council, a pro-trade group that helped form the coalition, said in an interview that the free-trade pacts aren't the purpose of the push for TAA, but acknowledged that it would be "a nice side product."
"The associations and, I think, most of the companies would support all of the pending free-trade agreements, but that's not what this is about," said Reinsch. "What this is about is trying to move the ball forward specifically on TAA for its own sake and its own right because we think it's the right policy."
The coalition, which includes major corporations such as Chevron Corp. (CVX) and Citigroup Inc. (C) as well as the U.S. Chamber of Commerce and other trade groups, also plans to focus on a broad agenda to improve competitiveness via education and investment, he said. But TAA reform is something that can be achieved this year, "so we don't want to miss the opportunity," Reinsch added.
The debate over TAA is part of an effort by Democrats to ensure that the expansion of free trade is made more fair by helping workers whose jobs are shipped overseas and beefing up trade-protection tools. Baucus has said he wants to mark up both TAA and trade-enforcement bills before the July 4 recess.
Both the House and Senate bills would double funding for retraining to $440 million a year and expand its scope to cover the service sector, which the Congressional Budget Office estimates would boost the number of eligible workers to 200,000 from 120,000 a year.
The House plans to cover the cost of its bill, which the CBO puts at $8.6 billion over 10 years, in large part by putting off business tax cuts approved by Congress in 2004 until 2012. The Baucus-Snowe bill hasn't specified how it would pay for the increase in TAA-related spending, which currently costs less than $1 billion a year.
The White House has a number of issues with the House version, including the delay in business tax cuts and a provision to toughen the so-called WARN Act dictating plant closings by extending the time period to notify workers and raising penalties for noncompliance, which also isn't part of the Baucus-Snowe bill. But the Bush administration's main objection is the expansion of benefits to service workers, communities, and even whole industries, which it fears is too poorly defined and could result in a "universal" income support program.
"There's a willingness to go into the service area if it's better defined," a U.S. trade official said.
"I think the idea is that the playing field is in the Senate to get something that's agreeable, to try to get a bill that drives the train out of the House," the official said, adding that everyone involved in the talks is optimistic.
The administration hopes to use the TAA as a "springboard" to get the trade agreements passed, the official said, while adding that the ball is in Pelosi's court at the end of the day.
The trade official also praised the business coalition for getting involved, saying, "I think they're trying to play a constructive role in getting us moving down the path toward the free-trade agreements."
Baucus reiterated at an event Tuesday that TAA needs to get done for Colombia to pass, but added, "there's a little bit of a dance as to which comes first."
Some of those most in favor of stronger worker assistance, such as unions, are suspicious of the business group efforts to push through a compromise, however.
"While Sen. Baucus's bill is a very good bill, there is no room really for weakening," said Yvette Pena Lopez, legislative representative for the Teamsters, saying the business groups are really just after the free-trade deals.
"We've been waiting for a long time for TAA reform, so we're willing to wait another nine months or so until we have a new administration and there are no veto threats," she said.
Both parties' candidates running for president, Sen. Barack Obama, D-Ill., and Sen. John McCain, R-Ariz., have spoken in favor of revamping programs to help displaced workers.
So far, there have been few signs of progress in the Senate Finance Committee discussions, however, and some Republican committee members are skeptical that a markup will occur this month.
"I get the sense that they are not able to bridge the gap on TAA, and so that might not happen during this work period," said a Republican aide.
(Martin Vaughan contributed to this story)
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