White House, Senate Negotiators Reach Agreement on Trade Package

WASHINGTON – Senate and White House negotiators reached agreement Thursday on a trade package giving the president broad negotiating powers after taking out provisions opposed by Republicans that offered health benefits to retired steelworkers.

Generally, the two sides settled on health insurance for American workers who lose their jobs because of international trade. Workers would be eligible for tax credits worth up to 70 percent of the federal COBRA health insurance plans or other state-run group plans.

The deal, reached after a week of talks, opened the way for the Senate to move on a three-part trade package that gives the president so-called fast track trade authority, expands the trade adjustment assistance program for trade-displaced workers and extends a 10-year program of low tariffs for products from Colombia, Peru, Bolivia, and Ecuador.

"The United States will once again have leadership in the regime of reducing barriers to trade," said Sen. Charles Grassley, R-Iowa, lead negotiator with Sen. Max Baucus, D-Mont. "It's one of the greatest job- creation bills that Congress can ever be involved with."

Baucus, chairman of the Senate Finance Committee, said the White House, which has made trade promotion authority one of its top legislative priorities this year, and Senate leaders from both parties had signed on to the agreement.

Baucus said he was confident the Senate could pass the trade package next week, sending it to a conference with the House, which separately approved trade promotion authority and extended the trade assistance and Andean trade programs last year.

Trade promotion authority gives the president the power to negotiate international trade pacts that Congress can approve or reject but cannot amend. Every president since Gerald Ford had this authority, but it expired in 1994 and Congress has not renewed it.

The Bush White House says negotiating authority is essential if it is to take a leading role in a new round of World Trade Organization talks and ongoing negotiations to establish a free trade zone for the entire Western Hemisphere.

Senate Democrats insisted on tying negotiating authority to worker protections, including health benefits for trade-dislocated workers. They originally sought a 75 percent subsidy, but eventually agreed to the 70 percent level.

The final deal also extends trade assistance eligibility to secondary "upstream" workers who supply goods to a manufacturer hit by trade competition. Grassley said that would double the number of eligible workers to more than 100,000. Separately, farmers, ranchers and fishermen would also have access to trade adjustment training and other benefits. The entire program would cost $10 billion to $12 billion over 10 years.

Senators from steel states also sought provisions to give retired steelworkers the same health benefits as other trade-displaced workers, but that language was removed as part of the compromise.

Sen. Phil Gramm, R-Texas, who led the opposition to the health benefits, accepted those benefits after the steelworker assistance was removed. Those supporting help for steelworkers could still offer it as an amendment.

Also taken out of the bill was a provision requiring stricter standards for Mexican truckers.

"I'm disappointed that we couldn't do more, but I'm also appreciative of the fact that we've got to move on," said Senate Majority Leader Tom Daschle, D-S.D.

Grassley, the top Republican on the Finance Committee and Baucus' negotiating partner, said he was pleased with the result. The trade package, he said, "will become law."

That outcome had been in doubt throughout the day, with Daschle threatening to pull the bill and move on to other legislation if a deal could not be reached.

Also on Thursday, Republicans sought to separate the Andean trade measure from the other parts of the bill, warning that the four South American countries will be hit with much higher tariffs if Congress fails to act by a May 16 deadline.

The House must still agree to the health benefits for trade-displaced workers before next Wednesday to extend the Andean accord, which has wide support as a way to boost the economies of those countries and wean them from their reliance on illegal drug production and trafficking.

"It's in the U.S. national interest not to see these countries degenerate into economic, political and, in the case of Colombia, armed chaos," said Sen. John McCain, R-Ariz. Democrats, however, insisted on keeping the package intact.