WASHINGTON -- House and Senate trade leaders said Thursday they were looking at a compromise solution to extend an American worker assistance program that has become the primary obstacle to congressional approval of free trade agreements with South Korea, Colombia and Panama.
The White House, the business community and most lawmakers support the long-pending trade deals, but the White House and Democrats say extension of Trade Adjustment Assistance must be part of any trade vote. Republicans insist that TAA, a half-century-old program that offers financial aid and retraining to workers dislocated by global competition, has no place in the trade bills.
But as the two committees in charge of trade -- Finance in the Democratic-controlled Senate and Ways and Means in the Republican-led House -- met Thursday to consider draft versions of the trade bills, the chairmen of both panels held out hope for a compromise.
Finance Committee Chairman Max Baucus, a Democrat, said he did not rule out other options apart from attaching the worker assistance program to the trade bills "as long as they provide certainty that the bipartisan deal on the assistance program will be enacted in tandem" with the free trade agreements.
Minutes later, Ways and Means Committee Chairman Dave Camp, a Republican, said that if the White House sends up its final version of the trade bills without the assistance program, he would hold a vote on those bills and a separate bill on the assistance program the same day.
The leader of the House, Speaker John Boehner "knows and I know that we have to deal with TAA," Camp said.
Still, the potential for TAA to wreck chances for passing the trade bills was evident. The South Korea draft legislation was approved in both committees but only after every Senate Finance Republican voted against it following defeat of an amendment by Sen. Orrin Hatch, a Republican, to delink it from the assistance program. Every Ways and Means Democrat voted against the South Korea bill because the assistance program was not on the agenda.
The Trade Adjustment Assistance program was created in the 1960s to help workers laid off because of foreign competition. It was expanded in 2009 as part of the economic stimulus package to include service industry worker and to extend subsidies to help laid-off workers buy health insurance. Those expansions expired in February this year and the White House, joining many Democrats, has insisted that renewal of the assistance must be part of the trade bills.
Camp, Baucus and the White House recently agreed on a scaled-down plan to extend the assistance program. Among the cutbacks, it would reduce financial payments to assistance program recipients from 156 weeks to 117 weeks plus 13 weeks for those needing extra training. The health coverage tax credit is reduced from 80 percent under the 2009 law to 72.5 percent and would be eliminated at the end of 2013. Previous to 2009 it was 65 percent.
Public sector workers would no longer be eligible for TAA programs under the compromise.
Last year more than 200,000 workers made use of the program at a cost of almost $1 billion.
The top Democrat on the Ways and Means trade subcommittee, Jim McDermott, was skeptical of proposals to move TAA as separate legislation. If the assistance program "doesn't go with these agreements it will die in the Senate," he said. The top Democrat on the committee, Sander Levin, urged his colleagues to vote against all three trade deals if the assistance program was not incorporated.
A McDermott amendment to attach the assistance program to the Panama agreement was defeated 22-15 on a party-line vote.
Similarly in the Senate the majority Democrats rejected an amendment by Sen. Pat Roberts, a Republican, that would have required the three trade agreements to go into force before the expanded benefits under the assistance program could be affected.
All three trade agreements were signed during the George W. Bush administration, but never advanced in the then-Democratically controlled Congress.
The Barack Obama administration moved to renegotiate key elements of all three deals, gaining commitments from South Korea to improve access to U.S. autos, from Panama to change laws that fostered tax havens, and from Colombia to improve its labor rights record.
The business community has pushed for quick approval of all three, noting that South Korea finalized a trade agreement with the European Union on July 1 and that a Colombia-Canada trade agreement will go into force next month.
Economists say the trade pacts, which would lower or eliminate tariffs on almost all U.S. exports to those countries, could increase U.S. exports by $13 billion a year and create tens of thousands of jobs. The deal with South Korea is the biggest free trade agreement since the 1994 North American Free Trade Agreement.