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Fast Track May Be Just a Horse Trade Away


For George W. Bush and his anxious allies in the business community, the opportunity to restore special Presidential powers to negotiate trade deals is coming down to three letters: TAA. That stands for Trade Adjustment Assistance, and it's the price demanded by Senate Democrats.

The TAA program, which expired late last year, provides cash assistance and retraining for unemployed factory workers who can prove that foreign competition cost them their jobs. The price of a new program isn't a killer--an increase of $8.6 billion over 10 years. Business and perhaps even the White House seem willing to pay up to restore Presidential Trade Promotion Authority long known as "fast track."

While most Republicans are reluctant to create new government entitlements, Senate Democrats see help for displaced workers as a moral obligation and a political imperative. To expand TAA, Senate Majority Leader Tom Daschle (D-S.D.) and Finance Committee Chairman Max Baucus (D-Mont.) are pushing to add on a program to help the trade-affected unemployed buy health insurance. They would also cover farmers, fishermen, and collateral victims, such as truckers whose jobs are eliminated. In addition, Democrats want to establish a new "wage insurance" benefit for laid-off workers over age 50 who are forced to take new jobs at lower pay.

The White House finds itself on the defensive. In an election year, Republicans don't want to appear heartless toward globalization's American victims. And the Administration has limited leverage: It was so desperate to win House passage of Trade Promotion Authority that it agreed to protectionist deals sought by textile-state Republicans. So, Senate Democrats are just upping the ante.

Caught in the middle are U.S.-based multinationals that have spent seven years trying to maneuver a fast-track bill through Congress. Business wants a compromise on Trade Adjustment Assistance even if it means a larger and more expensive program. "Nothing generates as much public support for new trade agreements as the idea that workers who might be adversely affected by trade will get government help," says Franklin J. Vargo, a vice-president at the National Association of Manufacturers.

For Bush, TAA Day is approaching. The President has called for a Senate vote on the trade bill by Apr. 22, hoping for a pre-Memorial Day signing ceremony. Normally, the Senate is friendly turf for free-traders. And by providing the U.S. steel and lumber industries with politically prudent trade protection, Bush seems to have won enough converts in the Senate to pass some form of fast-track legislation with as many as 70 votes--assuming there is a compromise on TAA. Not only is the jobless program needed for the Senate vote, but a more generous TAA will also make it easier to get a final version of the trade bill back through the House, where the GOP measure passed by just a single vote.

The fight over TAA, however, could also complicate matters. For example, the White House wants Democrats to compromise on the health-care benefits displaced workers would receive. In place of a cash entitlement, Bush would substitute the refundable health-insurance tax credit in the Administration's budget proposal. Meanwhile, organized labor has made defeat of the entire trade bill one of its top legislative goals. It has long dismissed the TAA program as "burial insurance" for victimized workers.

Certainly, Senate Democrats and the White House seem far apart this close to the vote. But Bush has been quite flexible when it's time to close an important deal. That means there could still be a fast-track signing ceremony this spring. It is traditional to reward spouses of campaign fat cats with Kennedy Center appointments. Even so, President Bush's Apr. 9 choice of Caroline Wyly for the Center's Advisory Committee on the Arts is raising eyebrows. The reason? Wyly is the wife of Dallas businessman Charles Wyly, whose brother and partner, Sam, financed a $2.5 million ad blitz during the 2000 GOP primary attacking Bush rival Senator John McCain (R-Ariz.) as an environmental foe. Although Charles was a Bush Pioneer, the brothers insisted the campaign had no role in the ads. After two rounds of tax cuts in two years, the Administration may delay a third wave. "Are there any [cuts] that we are actively looking at today? No, there are not," Commerce Secretary Donald L. Evans said at an Apr. 5 press breakfast. Two reasons: Bush strategists think the Prez already is seen as a tax-cutter, and they don't want to be accused of catering to corporate benefactors in an election year. There's growing concern on Capitol Hill over the Immigration & Naturalization Service's low-tech ways. Seven months after September 11, the INS still can't immediately authenticate the identities of non-U.S. citizens trying to enter the country. The National Fraud Center, headed by LexisNexis exec Norman A. Willox Jr., has proposed a global database to identify travelers who may be security risks. But the high cost of collecting and digitizing such information may be prohibitive.


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