Monday, July 11, 2011

The TAA-FTA "Deal," Part 3: It's the Politics, Stupid

[Ed note: This is the third of a three-part series in which I'll review the joint FTA-TAA legislation proposed by the Obama administration and Senate Democrats last week. Familiarity with the White House's brilliant plan and recent events is presumed.  Parts 1 (on the spending) and 2 (on the law) of the series are available here and here, respectively.]

Now that Republican and White House positions seemed to solidify over the weekend and ultimate passage of pending US FTAs with Korea, Panama and Colombia is in question, it's a good time to analyze what everyone in DC really cares about - who's to blame for any ultimate collapse.  I had planned to do an extensive history of how we got here, replete with damning quotes from certain parties, but there's no need for that now, as Doug Palmer's latest Reuters' piece on the TAA-FTA stalemate does most of the heavy lifting for me (emphasis mine):
President Barack Obama appears headed toward a fight with Republicans over a long-delayed trade deal with U.S. ally South Korea, even though both sides say they want it to pass Congress.

Obama administration officials say no deal has emerged to ease passage of an agreement that supporters contend would create tens of thousands of jobs and help the White House aim of doubling U.S. exports in five years....

The Korean deal, and two other pending pacts with Colombia and Panama, were negotiated and signed under former President George W. Bush. He could not win their approval after Democrats took control of Congress in November 2006.

A year ago, Obama moved to resolve Democratic concerns with the deals. That accelerated after Republicans won the House of Representatives in November and demanded action on all three deals by July 1.

Obama could send the agreements to Congress as early as this week after committee-level action in the House and Senate last week.

The administration has signaled to business groups it intends to submit the Korea agreement with the controversial Trade Adjustment Assistance (TAA) retraining program included, one business source said.

McConnell strongly opposes that but the administration official said they see no other way to win approval of TAA, a key White House priority along with the pacts.

The administration does not want to further upset organized labor, which is wary of trade deals over their potential impact on U.S. jobs and is an key Democratic Party constituent....

Congress created TAA in the 1960s. An expanded version expired in February after newly elected Republicans, who now lead the House, balked at the $1 billion annual price tag.

Although the underlying TAA program remained in place, the White House warned Republicans in May that it would not send the three free trade agreements to Congress until there was a deal to renew many of the expanded benefits approved in 2009....

Democrats believe the administration needs to include it in the Korea bill to prevent Senate Republicans from killing it. Republicans believe they should be kept separate and have called plans to put TAA in the Korea bill "a poison pill."

Obama appears poised to defy Republicans, apparently counting on their traditional support for free trade deals which many of his fellow Democrats traditionally oppose.

That strategy might backfire. "We can't speak for every Republican, but (McConnell) has said he'd be compelled to vote against the Korean trade bill if it includes TAA," a McConnell spokesman said, adding the Republican leader would first do "everything in his power" to block action on the bill....

A Republican aide said McConnell believes TAA would pass in the Senate on its own and would not work against it if he got a vote on renewal of the [Trade Promotion Authority] fast-track powers.

House Speaker John Boehner also wants separate votes on the TAA program and the trade bill.
So to recap:

  • Because the White House, a significant minority of House and Senate Democrats and almost all congressional Republicans support the pending FTAs, the deals could, if submitted under TPA, pass both chambers of Congress relatively easily.  Like tomorrow. 
  • However, the TPA "fast track" protections needed to ensure congressional passage only apply if the President submits the FTAs' implementing legislation to Congress.  Thus, the agreements' fate rests solely in the President's hands.
  • Republican opposition to TAA expansion has been known since February, when the House overwhelmingly rejected extending the expanded TAA program because of substantive concerns about the program's purpose, scope and cost.
  • Knowing the Republicans' substantive opposition to TAA, the White House in May demanded that TAA renewal be part of congressional consideration of the FTAs.  Republicans, quite unsurprisingly, objected.
  • It is well-known that the White House's TAA demands are politically motivated in order to garner labor union support for the 2012 elections.
  • Because TAA cannot pass the House or Senate on its own merits, the President has refused to submit the FTA implementing legislation to Congress without TAA being attached.  Such extortion is the only way that the President can score the political victory he wants.
  • The President has issued his demands knowing full well that (a) Republican opposition to TAA is longstanding and substantive; (b) the FTAs would almost certainly be approved by Congress under TPA; and (c) the FTAs very likely cannot pass both chambers without TPA's procedural protections.  Thus, Obama's strategy is extremely risky and depends entirely on congressional Republicans reversing a substantive position on a controversial, billion-dollar spending program (of dubious value) that they cemented only a few months ago.
To summarize: the FTAs are the only thing that the White House and a majority of both chambers of Congress support, while TAA simply cannot survive the normal congressional process.  The President is thus risking the FTAs' sure passage by attaching a politically untenable program, and he's taking that risk in order score a cheap political victory.  And, of course, if the agreements' die, the President also benefits politically because US labor unions - a core Democratic constituency - steadfastly oppose them.

So, knowing this, can really there be any doubt as to who's to blame if the FTAs remain unimplemented into the Fall (and maybe even longer)?  Can there be any doubt as to who bears responsibility for the harms caused to US consumers and exporters as these trade agreements remain shelved?

Of course not, regardless of what the White House and its media supporters claim.

Still don't believe me?  Ok, then let's close with a simple hypothetical:

My wife hates anchovies, and I kinda like them.  I've known that she hates the little buggers - can't even stand to have 'em on the same plate as her food - since we first started dating.  So say one night we go to a local pizza joint and she, as she sometimes does, leaves her purse at home, thus leaving me the only Lincicome in the place with the ability to pay for dinner that night.  I only have enough cash on me for one large pie, so we're going to have to share (so much for "recovery summer," I guess).  Fortunately, we'd both be fine with a plain cheese pizza, so if I order that, we both will eat well and go home happy.  But if I were to demand that we order a large pizza with extra anchovies, she's almost sure to refuse to eat it even though, technically, she could force down a few slices and be fine (it's not like she's allergic or anything).  So say, after warning me against ordering anchovies and just begging for a plain cheese pie, I order the anchovy pizza anyway because that's what I want and, frankly, I have the cash.  When the pizza arrives at our table, she flatly refuses to eat it and, furious, demands to be taken home immediately.  So we just end up walking out of the restaurant without eating anything.  And everyone loses.

Now, is there really any way on earth that we could blame my wife for that ridiculous result?

Of course not.

So could somebody - anybody - please tell the President to just hold the damn anchovies?

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