(Phatforums Blog/ Bloomberg) – President Barack Obama won support of the largest U.S. business lobbying groups while Republicans balked at his plans to attach aid for displaced workers to stalled trade deals with South Korea, Panama and Colombia.
The endorsement from groups including the U.S. Chamber of Commerce, which represents companies such as Pfizer Inc. (PFE) and PepsiCo Inc., came with a call for Republicans to drop their objections. It was a turnaround for business leaders, who in the past joined Republicans in criticizing Obama’s policies.
“For members of Congress who care about American jobs, this is a moment of truth,” Thomas Donohue, the Chamber’s president, said in a statement. “I urge members of both parties to seize a reasonable compromise and move the trade agenda forward.”
Consideration of the trade agreements, which have languished since 2007, got a boost yesterday when the Senate Finance Committee set plans for a hearing tomorrow on the accords. Draft legislation submitted by Democratic Senator Max Baucus of Montana, the committee chairman, with support from the Obama administration would attach Trade Adjustment Assistance for workers to the South Korea deal. Republicans protested connecting the two issues.
“I’ve never voted against a trade agreement before, but if the administration were to embed TAA into the Korea trade agreement, I would be compelled to vote against it,” Senate Republican Leader Mitch McConnell of Kentucky told reporters. It makes the debate “needlessly complicated and contentious.”
Senator Orrin Hatch of Utah, the panel’s top Republican, said he also opposed linking the trade deals with worker aid. Republican opposition means Democrats, who have split on previous trade deals with nations such as Mexico and Oman, must round up bipartisan support for the accords in the Senate.
“This particular configuration is unusual,” said Michael Moore, a professor at George Washington University in Washington and an economist in the administration of President George W. Bush. “Certainly in the last 30 or 40 years, I can’t think of an example where you would have serious opposition from Republicans” to trade deals.
Obama reworked the three free-trade agreements completed by his predecessor, George W. Bush, in response to concerns among Democrats on issues such as labor rights. The administration has been pushing to get the deals approved by Congress before a recess in August.
Legislation to implement the agreements would be given fast-track treatment, a procedure that guarantees trade bills submitted to Congress by the president can’t be amended before an up-or-down vote.
“The road to this point has not been an easy one, but our economy needs these jobs and these opportunities,” Baucus said yesterday in an e-mailed statement.
“There really can be no more excuse for inaction,” John Engler, the president of the Washington-based Business Roundtable, which represents corporate chief executive officers, said in a statement. “Support for a broad, positive trade agenda enjoys a long bipartisan tradition in Congress, as do such programs as Trade Adjustment Assistance.”
What the Senate panel announced yesterday was a “mock markup” session, held before the administration submits the legislation, that gives lawmakers a chance to offer amendments. The administration can accept or disregard any amendments made in the hearing before sending the measure to Congress.
The Trade Adjustment Assistance program augments health and unemployment benefits to workers who lose their jobs because of overseas competition. As part of the stimulus legislation in 2009, it was expanded to include service workers such as call- center employees. The added benefits expired in February.
The proposal from Baucus and the White House would continue most of those benefits through 2013, and provide retroactive assistance to those left out so far this year.
Paying for Aid
To pay for the extended worker assistance, the measure includes a provision to reduce reimbursement rates for medical imaging such as CAT scans and MRI scans by $400 million over the next 10 years, which could hurt companies such as General Electric Co. (GE) The measure also would require prisons to submit the names and Social Security numbers of inmates in an effort to avert tax fraud, and would set fines for false unemployment- insurance claims.
In earlier incarnations, the trade assistance was extended for five years rather than two years.
“This is a great deal, but it puts us back to where we are now in two years,” said Howard Rosen, a fellow at the Peterson Institute for International Economics in Washington.
House Speaker John Boehner, an Ohio Republican, has long maintained that the worker aid “should be dealt with separately from the trade agreements, and that is how we expect to proceed,” Brendan Buck, Boehner’s spokesman, said in an e- mailed statement.
If the Republican majority in the House seeks to amend trade legislation Obama submits, the measure would lose its fast-track status, which wouldn’t necessarily be a setback in the House, where Republicans control the process, said Caitlin Webber, a Bloomberg Government trade analyst.
“But under that scenario, a House-passed Korea trade deal could die on the Senate floor without fast track,” Webber said.
John Brinkley, a spokesman for the South Korean embassy, declined to comment on the agreement, saying he hadn’t had an opportunity to review it. Carmen Mora, a spokeswoman for Panama’s embassy in Washington, didn’t return a call for comment.
The agreement “marks the beginning of the formal congressional review process toward approval” of the accords, said Gabriel Silva, Colombia’s ambassador to the U.S. “As the agreement was signed more than four years ago, we are pleased to see the pathway toward approval in sight.”
Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, said this week that he would oppose the free-trade agreement with Colombia, because the administration refused to write provisions on labor rights into the legislation.
The draft legislation for the Colombia accord from Baucus and the administration includes renewal of trade-preference programs for poor nations, which had expired in February.
The South Korea deal is the largest of the three pending accords. That deal was initially opposed by Ford Motor Co. and the United Auto Workers union until the Obama administration negotiated to scale back reductions of tariffs. Total trade in goods with South Korea climbed to $88 billion in 2010, making the deal the biggest for the U.S. since the North American Free Trade Agreement with Mexico and Canada in 1994.