October 25, 2020

Republicans Boycott a Hearing on Trade

In an upside-down pair of performances, Democratic senators filled half a hearing room to declare their support for trade deals opposed by much of their party’s political base, while Republican senators stood before television cameras to declare that they would not allow a hearing on legislation that much of their own base strongly supports.

Senator Orrin Hatch, the ranking Republican on the Finance Committee, said Republicans were responding to a decision by the White House to include in the free trade legislation the expansion of a benefits program for workers who lose jobs to foreign competition.

“We made it clear time and time and time again that we would not stomach attaching a big government spending program onto these agreements,” Mr. Hatch said. “The president knew where we stood, and he decided to ignore those who don’t agree with him.”

Democrats, in turn, said Republicans were blocking legislation that would help the economy.

“They want the country to be in as bad shape as possible because that might help them electorally,” said Senator Charles E. Schumer, Democrat of New York.

The breakdown came less than 48 hours after the Obama administration announced a deal with House Republicans and Senate Democrats over the terms of the benefits program. An expansion passed by Democrats in 2009 lapsed at the beginning of this year. The agreement would reinstate about 60 percent of the lapsed financing for an additional two years.

Democrats had demanded the deal as a condition of their support for the trade agreements. House Republicans agreed reluctantly, after several weeks of negotiations.

The agreement, however, did not include Senate Republicans. Mere minutes before the Senate Finance Committee convened Thursday afternoon to consider the legislative package, the Republican members invoked Senate rules to prevent the meeting.

“That’s it,” said a frustrated Senator Max Baucus, the committee’s chairman. “We’re waiting.” Then, after all the Democrats spoke, they got up and left.

The three free trade agreements, which would eliminate tariffs on cross-border transactions, would expand annual exports of American goods by about $12 billion, according to estimates by the United States International Trade Commission. It would also create new opportunities for American service providers to compete in the three countries.

The pacts were negotiated by the Bush administration and are strongly backed by the United States Chamber of Commerce and other business trade groups. For most of the intervening years, Republicans pressed for a vote on the pacts while Democrats resisted.

The Obama administration, which is focused on expanding trade to invigorate growth, changed that dynamic. It has sought to win Democratic support for the deals through measures to protect American workers from negative consequences.

The compromise reached this week would provide $964 million in additional financing for the benefits program, almost all of which would be spent by 2013.

The Obama administration plans to submit that deal as part of the pact with South Korea, to give Democrats the assurance that it will rise or fall with the pacts.

House Republicans say they will hold separate votes on the trade pact and the benefits program.

Senate Republicans, many of whom oppose any additional financing for the benefits program, and who lack the power to set the terms of debate, said that their actions Thursday were an assertion of the rights of the minority party to be heard and respected.

“We tried everything in our power to work with the majority to find a resolution,” Mr. Hatch said.

Republicans cannot prevent the legislation from leaving the committee, but they can delay it. Democrats said that continuing to do so would hurt the economy.

“This boycott means the opportunity to pass important job-creation legislation is now delayed,” Mr. Baucus said. “American workers — and our economy — simply can’t afford to wait any longer.”

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Ultimatum Holding Up Trade Deals

President Obama has made the three deals a focus of his foreign and economic policy, but the Monday ultimatum reflects the political difficulty of advancing the deals in the face of high unemployment and opposition from parts of the Democratic base.

“This administration believes that just as we should be excited about the prospect of selling more of what we make around the world, we have to be equally firm about keeping faith with America’s workers,” said Ron Kirk, the United States trade representative.

The announcement puts the White House in line with Congressional Democrats who have made expanded benefits a condition of their support for the trade deals, and at loggerheads with Republicans who say the government cannot afford the cost.

Senator Orrin Hatch, the ranking Republican on the finance committee, said in a statement that the decision was “hugely disappointing.”

“It makes no sense to shut the door on increasing U.S. exports by over $10 billion in order to fund a costly program,” said Mr. Hatch, who is from Utah.

The federal government has provided supplemental assistance to workers whose jobs were shipped overseas since the 1960s, but the scale of those benefits has waxed and waned. The current benefits include training programs, money to cover the cost of searching for a job or relocating to a new city, and tax credits for health insurance.

In 2009, Congress expanded eligibility for the program significantly as part of broader economic stimulus legislation. The Labor Department estimates that the program provided benefits to about 280,000 workers last year at a cost of about $1.3 billion. But the expanded eligibility lapsed in February after House Republicans opposed its renewal.

Gene Sperling, director of the National Economic Council, said Monday that the White House was confident it could persuade Republicans to reverse that decision.

The administration started informal talks with the Senate about the three trade deals early this month, a step that seemed to reflect confidence on both sides that a deal can be done.

“We can work on Congressional leadership to get that accomplished,” Mr. Sperling said.

Conservative groups like the Cato Institute in Washington say there is little evidence that the program helps workers find new jobs, and that the government cannot afford the expense. They also question why the government should provide special help to the relatively small portion of unemployed workers who lose jobs to overseas competition.

“Furthermore, the existence of the program reinforces a false impression that international trade is a negative factor for the economy,” Sallie James, a trade policy analyst at Cato, wrote in a recent policy note arguing against continued financing.

But a range of business groups have sided with the White House, supporting the expansion as a necessary step alongside passage of the trade deals.

In a letter sent to Congressional leaders this month, the groups, including the United States Chamber of Commerce, wrote that the program was “an essential part” of the nation’s trade policy that had enjoyed bipartisan support for most of the last 50 years.

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