U.S. Senate Republican Policy Committee - Larry E. Craig, Chairman - Jade West, Staff Director
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May 10, 2002

How to Kill a Trade Bill

History Does Not Support Democrat Mandate that TPA and TAA Be Tied Together

Trade Adjustment Assistance will be part of the Trade Promotion Authority bill, and we'll be taking that up sometime earlier rather than later.

- Majority Leader Daschle, 1/23/02 (Q&A with reporters)

Well, trade adjustment assistance is something, of course, that we would like very much to be able to pass. . . .We think that we ought to provide the Trade Adjustment Assistance now, regardless of what happens to Trade Promotion Authority.

- Majority Leader Daschle, 12/4/01 (Q&A with reporters)

Majority Leader Daschle insists that Trade Promotion Authority (TPA) must be married to a Trade Adjustment Assistance (TAA) bill in order to move TPA. The TAA program since 1962 has offered extended unemployment benefits and job training to workers who become unemployed as a result of import fluctuations because of trade expansion, and it typically has been renewed with strong bipartisan support. Yet a look at Senate legislative history shows that TAA typically has moved through Congress separate from trade legislation. A reminder of this history is all the more important as the President's request to restore TPA has become linked to a TAA requirement set up by Majority Leader Daschle.

Recent Major Trade Legislation Approved by the Senate

Of the major trade legislation Congress considered during the last decade - which includes Permanent Normal Trade Relations (PNTR) for China, the Trade Development Act (to include the Africa Growth and Opportunity Act, U.S. Caribbean Basin), and "Fast Track" Authority for Uruguay Round of GATT - only the North American Free Trade Agreement (NAFTA) contained worker adjustment assistance. The NAFTA bill did not expand or reauthorize TAA but rather provided a new program, the NAFTA transitional adjustment assistance program (NAFTA-TAAP). Trade Adjustment Assistance was not included as part of the other trade measures.

Brief History of Trade Adjustment Assistance

  • 1974: Current form of TAA established under the Trade Act of 1974.
  • 1981: TAA benefits reduced by the Omnibus Budget Reconciliation Act (OBRA).
  • 1988: The Omnibus Trade and Competitiveness Act mandated job training as a specific requirement for TAA program eligibility.
  • 1993: The Omnibus Budget Reconciliation Act (OBRA) extends TAA through September 30, 1998.
  • 1998: The Omnibus Consolidated and Emergency Supplemental Appropriations Act extends the act for nine months.
  • 1999: The Consolidated Appropriations Act for 2000 extends TAA through FY 2001.

Since 1974, trade and TAA expansion have generally been considered on separate tracks. Considering that most observers believe an up-or-down vote on a clean TPA bill would win at least 70 votes in the Senate, any attempt to hold TPA hostage to an overhaul of the TAA has to be seen as an indication of the Majority Leader's commitment to free trade. The Daschle TAA proposal contained expanded wage insurance and health care entitlements for a vast new population of workers and represented a complete departure from traditional Trade Adjustment Assistance (TAA).

Speaking before the Senate on May 8, Finance Committee Chairman Max Baucus noted: "Congress has regularly reauthorized the TAA program - about every five years - and always with bipartisan support." It is noteworthy that given the Chairman's own words, the Senate was tied in knots as a result of a sharply partisan TAA proposal, push by the Majority Leader.

Trade Promotion Authority was approved overwhelmingly (18-3) by the Senate Finance Committee last December. Yet Leader Daschle jeopardized American jobs and economic growth by demanding the Senate accept controversial measures in order to pass TPA until enough pressure was applied to force its removal and a new compromise was reached.

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