Obama ties trade pacts to aid for US workers who lose jobs

By Binyamin Appelbaum
New York Times / May 17, 2011

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WASHINGTON — The Obama administration says it will not seek congressional approval of free trade agreements with Colombia, Panama, and South Korea until Republicans agree to expand assistance for US workers who might lose jobs as a result.

President Obama has made the three deals a focus of his foreign and economic policy, but yesterday’s ultimatum reflects the difficulty of advancing the deals in the face of high unemployment and opposition from parts of the Democratic base.

“This administration believes that just as we should be excited about the prospect of selling more of what we make around the world we have to be equally firm about keeping faith with America’s workers,’’ said Ron Kirk, the US trade representative.

The announcement put the White House in line with congressional Democrats who have made expanded benefits a condition of their support for the trade deals, and at loggerheads with Republicans who say the government cannot afford the cost.

Senator Orrin Hatch, the ranking Republican on the finance committee, called the decision “hugely disappointing.’’

“It makes no sense to shut the door on increasing US exports by over $10 billion in order to fund a costly program,’’ said Hatch, of Utah.

The government has provided supplemental assistance to workers whose jobs were shipped overseas since the 1960s, but the scale of those benefits has waxed and waned. The current benefits include training programs, money to cover the cost of searching for a job or relocating to a new city, and tax credits for health insurance.

In 2009, Congress expanded eligibility for the program. The Labor Department estimates the program provided benefits to about 280,000 workers last year at a cost of $1.3 billion. But the expanded eligibility lapsed in February after House Republicans opposed its renewal.

Gene Sperling, director of the National Economic Council, said the White House was confident it could persuade Republicans to reverse that decision.

Conservative groups like the Cato Institute say there is little evidence the program helps workers find new jobs, and that the government cannot afford the expense. They also question why the government should provide special help to the relatively small portion of unemployed workers who lose jobs to overseas competition.

But a range of business groups have sided with the White House, supporting the expansion as a necessary step.