The Administration sharpened its message on trade policy this week – Congress must pass a Trade Adjustment Assistance (TAA) extension before the three pending free trade agreements are sent up for a vote. As we predicted, passing the FTAs is not going to be a walk in the park. Cue the Sergio Leone soundtrack… on one end of the dusty road stands Congress, at the other the Administration. Each is staring the other down, waiting for one to flinch. The Administration wants the Korea FTA. Congress demands all three agreements. The Administration says TAA or bust. Congress expresses its frustration with “pre-conditions” and is nervous about what it will have to do to pay for TAA. On the count of three. 1…2…
So “extended” TAA is the linchpin. And why? To briefly refresh your recollection, dear reader, TAA is a program that provides “a path for employment growth and opportunity through aid to US workers who have lost their jobs as a result of foreign trade.” Individual workers, firms, farmers and communities may benefit from TAA funds. The program has been around for almost 50 years but was majorly revamped in 2009. Those changes included:
- making service sector workers eligible for TAA, and expanding access for manufacturing and secondary workers,
- increasing training funding,
- increasing the TAA for Workers Health Coverage Tax Credit subsidy to 80% percent,
- improving and making permanent the re-employment TAA wage insurance program, and
- tripling authorization funds for TAA, improving the TAA for Farmers program and creating the TAA for Communities program.
TAA is not a new issue, but Democrats are increasingly using it as ballast to enable them to vote for FTAs. Republicans may have to yield a little here if they want to pass the FTAs. The question is how a concession on TAA will influence the rest of the budgetary discussion. As we all know, the House is looking to cut not millions, not billions, but TRILLIONS of federal government spending. TAA cost during 2010 was close to $1 billion, just a drop in the ocean some may say, but in the current environment principles may trump practicality. Is this town big enough for the both of them?
