While Obama has spent the past two years pandering to leftist dictators in Latin America, he has also impeded ratification of free trade agreements with our allies. Along with Democrat leaders in Congress, Obama has refused to approve the 5-year-old trade pacts with Columbia, Panama, and South Korea unless Republicans agree to renew a trade subsidy program known as Trade Adjustment Assistance (TAA). Yesterday, Senator Max Baucus (D-MT) announced that he had secured a novel compromise with House Ways and Means Chairman Dave Camp (R-Mich.) and the president. Drum roll…. He will agree to fast track the trade agreements if …Republicans agree to renew the TAA program! Wow, who needed two years’ worth of negotiations?
The Trade Adjustment Assistance, which expired in February, is nothing more than a welfare program that is subjectively doled out to anyone who offers a dubious claim that they lost a job due to trade agreements. Like many other programs, the TAA was drastically expanded under the stimulus bill to include all sorts of workers at a cost of over $1 billion, and has been used as a slush fund for special interests. Keep in mind that this program is totally independent from the unemployment benefits that are already being offered for an unprecedented 99-week period. The TAA grants some unemployed workers assistance for up to three years. The continuation of this program until 2013, as proposed by Baucus, would only serve to perpetuate unemployment the same way that hyper long-term unemployment benefits do. Besides, like all federal jobs programs, studies show that TAA has failed to boost long-term success for the unemployed.
Baucus plans to pair the TAA reauthorization with the South Korean trade implementation bill and hold a “mock markup” of all three bills at the Senate Finance Committee on Thursday to hash out the details of the compromise. Under the Trade Act of 1974, in order to fast-track trade agreements, Congress cannot amend or filibuster the implementation law for the agreement, even in committee. The whole point was to preempt poison pills from protectionists by forcing an up or down vote on the final trade agreement.
Consequently, Baucus cannot hold a real markup to work out amendments and compromises. Instead, he is scheduling a backdoor wheeling and dealing session being dubbed as a mock markup. Presumably, a mock markup is the most productive thing this Senate can do, being that they failed to produce a budget for almost 800 days, have not passed a single important piece of legislation this session, and plan to lighten their “burden” of ‘advise and consent’ on presidential appointees.
Some Republicans are offering the typical flaccid response to all reauthorizations of subsidy programs; they are demanding that the TAA reauthorization be paid for with other spending offsets in a separate vote. However, Republicans should categorically reject this program on its underling merits, even if they discover anomalous spending offsets. This program exemplifies Obama’s anti-ATM style economics. He admits that the pro-growth trade agreements will create many jobs (and benefit consumers to boot), yet he wants to subsidize jobs lost from creative destruction of a free market economy. It is no different from his desire to pay reparations to bank tellers (and buggy drivers for that matter).
Republicans should also beware of any last minute lard that is inserted into the draft implementation bill. Whatever is in the agreement that is sent to Obama, will be brought back to Congress for an up or down vote, denying Republicans a chance to support the trade agreements without welfare provisions ensconced in the bill. The Chamber of Commerce, fearing such an outcome, is now pressuring Republicans to accept the compromise. It is good to see that Rep. Dave Camp, the chief House negotiator of the agreement, has become leery of Baucus’s chicanery and is dialing back his support for the compromise.
It is also heartwarming to hear Finance Committee Ranking Member Orrin Hatch, the key Senate Republican on trade issues, resolutely reject the entire deal. Here is Hatch’s response to the Baucus deal:
“This highly-partisan decision to include TAA in the South Korean FTA implementing bill risks support for this critical job-creating trade pact in the name of a welfare program of questionable benefit at a time when our nation is broke. This is a clear breach of Trade Promotion Authority and threatens the ability of American exporters and job creators who stand to benefit from the largest bilateral trade agreement in more than a decade. TAA should move through the Congress on its own merit and should stand up to rigorous Senate debate. President Obama should send up our pending trade agreements with Colombia, Panama, and Korea and allow for a clean vote.”
Republicans should stand united and demand an up or down vote on these trade agreements. Democrats rushed to ratify START – a treaty that will imperil our national security – during the lame duck session, yet they are filibustering 5-year-old trade agreements that will boost our economy.
Maybe we ought to propose a trade agreement with Russia or Venezuela. It will fly through the Senate in a flash.