Free-Trade Deals Held for Worker Benefits, Obama Aide Says

Pending U.S. free-trade accords with South Korea, Colombia and Panama won’t be submitted to Congress until lawmakers agree to renew trade-adjustment assistance for workers, an Obama administration official said.

Bills implementing the accords, reached under President George W. Bush, are being drafted and will be withheld unless Congress agrees to extend benefits for workers who lose their jobs to overseas competition, National Economic Council Director Gene Sperling said today. The provisions expired this year for services workers.

“The administration will not submit implementing legislation on the three pending free-trade agreements until we have a deal with Congress on the renewal of a robust, expanded” worker-aid program, Sperling said on a conference call with reporters.

The trade-assistance program augments health and unemployment benefits for workers who lose their jobs in response to overseas competition. As part of the 2009 stimulus bill, it was expanded by $1 billion to include service workers such as call-center employees, who accounted for more than half of the 280,000 people who got aid last year, according to Labor Department data. Those added benefits expired in February.

As part of the 2009 stimulus bill, the trade-assistance program was expanded by $1 billion to include service workers such as call-center employees. William Thomas Cain/Getty Images Close

As part of the 2009 stimulus bill, the trade-assistance program was expanded by $1... Read More

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As part of the 2009 stimulus bill, the trade-assistance program was expanded by $1 billion to include service workers such as call-center employees. William Thomas Cain/Getty Images

Senate Finance Committee Chairman Max Baucus, a Montana Democrat, called this month for worker-aid renewal to accompany approval of the trade accords. The U.S. Chamber of Commerce and business groups have joined Democrats in pushing for the program’s extension.

Republican Complaints

Senator Orrin Hatch of Utah, the top Republican on the Finance Committee, said in a statement today that depriving American exporters of the opportunity to broaden their reach in foreign markets while advocating for an expensive government program “makes no sense” and is “hugely disappointing.” Senator Charles Grassley, an Iowa Republican who helped negotiate the 2009 legislation that extended trade-adjustment assistance, said last week the program’s cost is unsustainable.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said President Barack Obama should reconsider his decision and urged him to “not allow anything to get in the way of congressional consideration of these trade agreements and the jobs they’ll create,” according to a statement.

McConnell asked Obama to work with Congress on extending trade-promotion authority, which cedes to the president Congress’s right to set tariffs and regulate commerce, expediting trade accord negotiations with foreign governments.

The Obama administration is working with lawmakers to prepare the implementing legislation for the pending accords, U.S. Trade Representative Ron Kirk said. Sperling said the White House expects bipartisan support for the program and that its funding and cost will be determined during talks with Congress and the Congressional Budget Office.

To contact the reporter on this story: Eric Martin in Washington at emartin21@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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