Despite previously supporting them, the Obama administration announced today that it would not submit the three outstanding preferential trade deals (with South Korea, Colombia and Panama) for a vote unless and until Congress reinstates an expanded version of Trade Adjustment Assistance, a program of benefits for workers who have lost their job because of competition from imports. Although the basic TAA program (with us since 1974) is still in place, a version expanded by the stimulus package in 2009 lapsed in February amid some Republicans’ concerns about its cost and its false premise: that workers who lose their jobs because of import competition are more deserving than other unemployed Americans. More on TAA here and here.
According to this article by Congressional Quarterly[$], the business community supports the enhanced TAA, seeing it as a worthwhile bribe compromise to secure votes for trade agreements. I understand that logic, even if I don’t support it. But the merits of that argument aside, and as I’ve outlined repeatedly, I’m not sure the deal holds anymore. While it is true that TAA has in the past been used to secure votes for trade agreements, that is not really necessary in this case. After all, if the Republicans all voted in favor of the agreements, then Democratic votes (those most likely to need some sort of assurance on welfare) would not be needed, unless the administration is implying a veto threat. Indeed, it is likely that making an expanded TAA a condition for the trade deals would cost some votes from conservative and tea-party minded Republicans. But the administration wants a larger TAA program in place, and this is their price. Stay tuned.
HT: Andy Roth at the Club for Growth