Debate on spending threatens trade pact

WASHINGTON – The White House and Senate Democratic leaders announced an apparent breakthrough on passage of long-sought free trade agreements with South Korea and other U.S. trading partners, but key Republicans immediately threatened to torpedo the plan because it would extend an existing federal program to retrain American workers who lose jobs to foreign competition.

In the kind of compromise that traditionally assures passage of a legislative proposal, the job-training provision was added to the trade agreements long favored by business groups in order to win over Democratic lawmakers from industrial states such as Michigan, where overseas competition is blamed for thousands of lost jobs.

But tea party and other conservatives bolted over the issue of more spending and big government.

The on-again, off-again trade deal illustrates the policy paralysis that now grips Washington on almost any issue involving federal spending.

Even as the Republican Party’s stalwart constituents such as the Chamber of Commerce vigorously endorsed the trade pacts, GOP leaders were balking at renewal of the so-called Trade Adjustment Assistance, funding for which was more than doubled two years ago to $575 million annually. The Heritage Foundation, a conservative think tank, labeled the TAA program “ineffective … and overly generous benefits” for a small fraction of laid-off workers at a time when “out-of-control spending and surging public debt (are) threatening our nation’s stability.”

The White House described the typical beneficiary of the TAA as a 46-year-old male, the family’s main breadwinner, with a high school education who had worked more than a decade in a factory that is closing. More recently, with the program’s expansion to include service industry employees, many more of those benefiting have been in occupations such as bookkeeping, call-center clerks and data processing.

Senior Obama administration officials said that they had worked out the compromise deal on the TAA with the Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Dave Camp, R-Mich. The officials said the training funds would be fully paid with offsetting savings in other areas.

But even as administration officials were briefing reporters Tuesday evening, saying they were hopeful that the trade pacts and the extension of TAA would all be approved, Camp issued a statement suggesting he would not throw his support behind it.

“It is regrettable that the White House has insisted on Trade Adjustment Assistance in return for passage of these job-creating (trade) agreements,” Camp said. While acknowledging that he had “been willing to work with the White House to find a bipartisan path forward on TAA in order to secure passage of the trade agreements … the decision on how to move these items through the House is a matter for Republican leadership to determine.”

House Speaker John Boehner, R-Ohio, indicated he was pleased that progress was being made on the trade measures. “But we have long said that TAA – even this scaled-back version – should be dealt with separately from the trade agreements, and that is how we expect to proceed,” said Boehner spokesman Michael Steel.

President Barack Obama, who has sought to redouble a focus on jobs and economic growth amid a sputtering recovery, has pushed the trade deals with Korea, Colombia and Panama as a key element in achieving his repeatedly stated goal of doubling U.S. exports in five years.