Politics

White House offers trade: exports for worker-aid

White House officials announced today at 9:30 AM that they won’t send three pending trade pacts to Congress until they get a new package of aid-funding approved by Capitol Hill.

This move will further frustrate the business groups that have been pushing for the treaties and will raise hackles among budget-cutting House Republicans. But it will also bolster President Barack Obama’s ties to labor unions, and to Senate Democrats who must approve the treaties amid opposition from labor unions.

The move will also help portray Obama as a centrist among voters who are leery of free-trade, and likely prompt disputes between budget-cutting Republicans and the business leaders who see the three trade-deals as a higher priority than spending levels.

The pending trade-deals with Colombia, South Korea and Panama won’t be sent “until we have an agreement with Congress on a renewal of an expanded and robust Trade Adjustment Assistance program,” for workers, farmers and companies, said Gene Sperling, director of the National Economic Council.

The trade-deals have been opposed for several years by unions leaders. They worry that the trade-deals will result in the export of of U.S blue-collar manufacturing jobs and white-collar service jobs, and increase wage-competition between U.S workers and overseas workers in countries that have poor labor-protections and few environmental regulations. “We have to keep faith with American workers,” said trade-chief, Ron Kirk, the United States Trade Representative.

The cost of the new package “is too difficult to predict now,” said Sperling. “We will have to work together with Democrats and Republicans on an agreement…to both determine the costs and the offsets to ensure this is done in a budget-neutral way.”

In 2010, the program spent roughly $2.5 billion aiding 280,873 workers.

The trade deals are strongly supported by major business groups, led by the Chamber of Commerce and the Business Roundtable. Members of both groups have repeatedly expressed their frustration with the White House’s reluctance to push the trade-deals, despite the President’s repeated commitment to double exports by 2014. The boosted exports could help create 2 million new jobs, said White House officials.

The chamber has had several high-volume disputes with the administration since 2008, but the roundtable has tried to work with administration officials. In December, the roundtable sent a roadmap of its priorities to the White House, and emphasized its desire to see the three trade deals approved by the Senate. “The outstanding issues in the pending [deals] with Korea, Colombia and Panama should be resolved and the agreements sent to Congress as quickly as possible…. These initiatives are essential to opening new markets for American companies and workers and to maintaining a level and fair trading and investing field for them,”said the group’s roadmap.

The insistence that House Republicans approve funding for the multi-billion dollar project is likely to slow approval of the free-trade deals. GOP and small-government groups oppose the program as wasteful. For example, studies show that the spending “is ineffective in raising the wages of participants,” according to the Heritage Foundation. In fiscal 2010, 280,873 workers received aid, at the cost of roughly $2.5 billion, said a Heritage report.