Thursday, July 14, 2011

The TAA-FTA "Deal": The Law, One More Time

Last week, I explained why, based on the plain language of Trade Promotion Authority (as codified in U.S. law), the US-Korea FTA implementing bill could not contain provisions reauthorizing expanded Trade Adjustment Assistance and still qualify for TPA's "fast track" protections as it makes its way through Congress.  In particular, I explained how, despite White House assertions to the contrary, it was ridiculous to assert that TAA was "necessary and appropriate" to implement the KORUS FTA, as required under TPA, and thus any attempt to fast-track a joint TAA-FTA implementing bill relied on a blatant disregard of, or contempt for, the rule of law.  On Tuesday, however, Howard Rosen of the TAA Coalition has come to the White House's defense by arguing that the TAA-FTA legislation indeed does qualify for TPA's procedural protections because it's, like, totally "necessary and appropriate."  But is his defense valid?

In short, no.  Not at all.

On whether the TAA expansion could rightly qualify under TPA's  "necessary and appropriate" provisions, I stated last week:
It's absolutely laughable, however, that the TAA expansion attached to the US-Korea FTA would qualify as such a "provision." First, TAA expansion isn't "necessary or appropriate to implement" the KORUS FTA. Indeed, one of the key features of the TAA expansion package is that it de-links benefits from US FTAs. So, other than the fact that both the FTA and TAA have "trade" in their names, their actual substance is unrelated. Of course, one could argue that inclusion of TAA is politically "necessary" to ensure Senate passage of the KORUS FTA. However, by this silly political metric, anything - no matter how irrelevant and unconnected to the FTAs - could be deemed "necessary" to implement the FTA and thus entitled to special consideration (e.g., no filibusters) under House and Senate rules. So if, for example, a majority of US Senators said that they'd only vote for the KORUS FTA if the implementing legislation included a provision giving each of their spouses $1 billion in cold, hard cash, that "provision" would, under the White House's interpretation, be "necessary" to implement the FTA and thus qualify for TPA protections. This, of course, is absurd.

Second, the White House's expansive view of sub-paragraph (C) totally ignores its introductory clause: "if changes in existing laws or new statutory authority is required to implement such trade agreement or agreements or such extension." This clause makes it absolutely clear that the "provision... repealing or amending existing laws or providing new statutory authority" must be related to the "changes in existing laws or new statutory authority" that are required to implement the FTA at issue. So, if an FTA's implementing legislation amends US law, and it's determined that those amendments necessitate conforming edits to other US laws, the provisions containing those consequential conforming edits may be included in the implementing bill and granted TPA's protections. And this is precisely the type of "necessary provision" that has been included in past FTA implementing bills (such as that for the NAFTA).

So to claim that TAA expansion qualifies under sub-paragraph (C) and thus deserves TPA protection is a serious stretch. (And that's being kind.)
In short, because the TAA expansion at issue has no real, substantive connection to the US-Korea FTA, and because expanding TAA in the fashion contemplated here (e.g., renewing expired programs that covered services workers and, most importantly, expanded eligibility to workers allegedly displaced by competition from non-FTA countries) is not needed to conform existing US law to the laws changed by the KORUS agreement, then it simply cannot be "necessary and appropriate" under any reasonable reading of TPA's "necessary and appropriate" requirements.

Rosen disagrees.... well, sorta (emphasis mine):
Finally, including TAA reauthorization and reform in the US-Korea FTA implementing legislation meets the “necessary and appropriate” criteria set by historic precedent. Except for two cases, in 1981 and 2009, all Congressional action on TAA since the program was established almost 50 years ago, has been linked to trade legislation. TAA provisions were included in the Trade Expansion Act of 1962, the Trade Act of 1974, the Omnibus Trade and Competitiveness Act of 1988 and the Trade Act of 2002.

TAA has only been directly linked to FTA implementing legislation once, the NAFTA Implementing Act in 1993, since there was no need to reauthorize or make changes in the program at the time Congress was considering other FTAs. For example, the Trade Act of 2002, which included significant reforms, reauthorized the program through 2007. The only reason there is an immediate need to act on TAA is that the program’s authorization and the reforms implemented in 2009 expired on February 12.
Ok, so that sounds pretty reasonable, right?  Yeah, except for the small fact that it's not reasonable.  At all.

First, it's really important to note here what Rosen isn't saying.  He's actually not arguing with my (correct) interpretation of US law.  Instead he's saying that it's totally ok to disregard a proper reading of US law because it's been disregarded in the past (i.e., "by historic precedent").  Thus, Rosen's primary defense of the joint TAA-FTA legislation is the classic "everybody's doing it" defense that I unsuccessfully tried to deploy against my parents throughout the 1970s and 1980s.  But as my mom (and all other moms) would tell us: just because other people disregarded the law doesn't mean that what they did was legal.  It just means that they didn't get caught.

But there's an even bigger problem with Rosen's defense, and here's where the wheels really fall off: the "historic precedent" he cites is completely inapplicable to the current situation.  Rosen tries to pull a clumsy slight-of-hand in the first paragraph pasted above by switching "FTA implementing bill" with "trade legislation" and then citing all of this "trade legislation" to which TAA has been historically attached (i.e., the Trade Expansion Act of 1962, the Trade Act of 1974, the Omnibus Trade and Competitiveness Act of 1988 and the Trade Act of 2002).  Yet no one is arguing that provisions amending, expanding or reauthorizing TAA can't be attached to "trade legislation," and the TPA legal rules that I cited in my original blog post (and which matter for the purposes of the current TAA-FTA debate) deal only with FTA "implementing bills."  So the fact that TAA has been attached to other trade bills is a red herring.

Second, the "direct linkage" of TAA provisions to the NAFTA implementing legislation actually supports my reading of the law because the TAA provisions included in the NAFTA Implementation Act of 1993 were actually linked to, and necessitated by, NAFTA's implementation.  Indeed, here's how the House Ways & Means Committee Report described the TAA provisions included in the NAFTA implementing bill (emphasis mine):
New Trade Adjustment Assistance Benefits.

The bill would add a new sub- chapter to the TAA program to allow workers who lose their job because their firm shifts production to Mexico or Canada to qualify for TAA. In addition, workers would be required to enter a job training program by their sixteenth week of unemployment or their sixth week of TAA certification, whichever is later, to be eligible for benefits. Unlike the current TAA program, beneficiaries under this sub-part could not receive a waiver from training and still collect cash assistance. TAA cash and training benefits under this amendment would be available to those who are displaced from their jobs between January 1, 1994, and September 30, 1998. CBO estimates that fewer than 1,000 workers annually would qualify for TAA payments under this provision. The average training benefit would be $4,000 per person, and the average cash benefit would be approximately $6,000 per person. CBO estimates that total TAA payments under this new sub-part would be less than $500,000 in fiscal year 1994, $7 million in fiscal year 1995, $8 million in fiscal year 1996, and $9 million each of the fiscal years 1997 and 1998.
Now, leaving aside the distressing fact that expanded TAA benefits under the NAFTA were only in the low millions (compared to the billions of today's TAA program), it's abundantly clear from the description above that the TAA provisions in the NAFTA implementing bill (a) amended existing, not new, TAA programs and (b) were clearly based on the projected effects on the TAA program caused by expanded trade with Canada and Mexico (i.e., NAFTA).

The TAA expansion attached to the KORUS, on the other hand, meets neither of these criteria.  Indeed, as I noted above, it actually de-links benefits from US free trade agreements!  It thus simply cannot be considered "necessary and appropriate" to implement the KORUS under even a liberal reading ot TPA.

As I said in my original blog post on this subject, all of this legal analysis, while correct, is probably moot because Congress can just "creatively interpret" or re-write TPA's rules and thus can basically do whatever it wants on the subject.

But let's please stop kidding ourselves that the joint TAA-FTA package currently being pushed by the White House and Congressional Democrats meets TPA's legal requirements.  Both the law - and precedent - clearly show that it does no such thing.

No comments: