July 30, 2008 10:59AM # All Pretenses Abandoned By [Sallie James](https://www.cato.org/people/sallie-james) --- SHARE Welfare enthusiasts have always used pushes for free trade as leverage for increased support for laid-off workers. The logic was that because free trade brings myriad benefits to society, society could give just a little spare change to those who no longer can shelter behind consumer-funded protectionist walls. That is not exactly a principled position, of course (as I have asserted here [before](https://www.cato.org/2007/10/25/when-protectionists-meet-welfare-kings/)) but a new, “improved” proposal this time appears to have the support of [business groups](http://online.wsj.com/article_email/SB121738324070295809-lMyQjAxMDI4MTM3MDMzODAzWj.html). They have been convinced that the possible backlash against globalization is worth a massive expansion of the welfare state, and are backing a new wage insurance scheme that would cost $22 billion, funded through payroll (i.e., employment) taxes. But wait, there’s more. The new program would be available for *all* displaced workers, not solely for those who lost their jobs because of import competition. While I have always resisted that distinction because it demonized trade unfairly (see [here](http://www.freetrade.org/node/794)), a trade-linked scheme at least was less costly (less than $1 billion currently) and, up until recently, kept the trade ball rolling well enough. In light of the [collapse of the Doha round](https://www.cato.org/2008/07/29/the-still-frozen-dohapsicle-round/), the stalling of the [bilateral trade agreement with Colombia](http://www.freetrade.org/node/839), and [increased protectionist sentiment at home and abroad](http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=11792366), it is clear that negotiated trade liberalization efforts are in peril. What is not clear is whether an expansion of the welfare state would appease trade skeptics, including a [certain front-running presidential candidate](http://www.freetrade.org/node/868), and revive the decades long bipartisan support for trade. So what exactly are we buying here? ##### Related Tags [Tax and Budget Policy](https://www.cato.org/tax-budget-policy), [Trade Policy](https://www.cato.org/trade-policy), [Herbert A. Stiefel Center for Trade Policy Studies](https://www.cato.org/herbert-stiefel-center-trade-policy-studies) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).