Mr. President, I have an amendment at the desk, No. 625. I ask unanimous consent that it be made the pending business. I ask unanimous consent that the reading of the amendment be dispensed with. Mr. President, the amendment would…
Mr. President, I have an amendment at the desk, No. 625. I ask unanimous consent that it be made the pending business.
I ask unanimous consent that the reading of the amendment be dispensed with.
Mr. President, the amendment would authorize the continuation of trade adjustment assistance or TAA for 2 additional years at the level of funding the program maintained prior to the 2009 stimulus package addition. Prior to the stimulus, passed by this body in 2009, the TAA Program cost taxpayers about $1 billion per year.
The passage of the stimulus package, which was advertised to be a temporary injection into the economy--a temporary injection--the stimulus was increased and expanded to the program at a cost of about $2 billion in 2010; according to the Department of Labor estimates, $2.4 billion in 2011, if the stimulus expansions were allowed to remain in place.
I would remind my colleagues that with the stimulus package, these were a one-time deal, and once the money was spent, then those programs lapsed. Apparently not so with the TAA Program. We do not yet have a cost score for the Reid substitute before us, but estimates indicate the TAA agreement may lock in at least 65 percent of the 2009 stimulus expansions for the next several years.
That is approximately, in my calculation, at least a $600 million additional cost per year to the taxpayers for maintaining 65 percent of the stimulus level of TAA. Architects of the agreement will say these provisions sunset at the end of 2014. But we all know sunsets can be fiction. So we are talking about 2012, 2013, and 2014. That is about, roughly, a minimum of $1.2 billion of additional spending on the dubious--at least in my mind dubious--benefits of the TAA Program.
My friends on the other side of the aisle have long insisted that the price of passing trade agreements in Congress is passing TAA and other programs similar to it, domestic spending legislation geared to assist U.S. workers who have been adversely affected by foreign trade.
For this reason, in 2002, Congress passed the TAA legislation that provided short-term temporary support for worker retraining and other assistance. Many Republicans, including myself, were skeptical about whether this program and others like it achieved their goals. But we went along for the sake of our national interests and expanding free trade.
In 2009, without any action taken on our three pending trade agreements, the stimulus package dramatically increased the TAA Program as part of the stimulus bill and increased spending on this program annually by approximately $1 billion. In essence, a program that was designed to assist workers who had been adversely affected by free trade was transformed into a domestic spending program for reasons that had nothing at all to do with expanding free trade.
What is worse, after repeatedly claiming it supports the free-trade agreements with Colombia, Panama, and Korea, the White House earlier this year announced that the cost of its support was reauthorization of the new TAA with funding set not at the original 2002 level but the 2009 stimulus level.
So we had a program that had been expanded from its original cost under the dubious guise of a temporary economic stimulus, and then we were told this temporary funding increase, which was designed to expire along with the stimulus, should, in effect, be turned into a permanent domestic spending program.
After much discussion and debate, there now appears to be a proposal to reauthorize TAA and fund it somewhere between the prestimulus and poststimulus levels. This proposal is contained in the substitute amendment offered by the majority leader. Some would say this is a good deal and Republicans should accept it. Others say trade adjustment assistance is ineffective and unproven and Congress should kill it altogether.
I am very dubious about the benefits of TAA. But I understand also what is doable around here and what is not. So I am offering this amendment as a matter of principle. As I have said many times on the floor of this body, I am not opposed to TAA nor do I seek to kill it. I read the same media reports as my colleagues, which suggest that the White House is holding hostage the trade agreements with South Korea, Colombia, and Panama until Congress passes TAA.
Many of us do not like this. Many of us think this is contrary to our national and economic interests. But it is a fact. So I recognize, as in the past, that Congress should reauthorize TAA. The question is, How much of the taxpayers' money should we spend to do it?
That is why I am offering this amendment. I believe Congress should reauthorize it because we are being compelled to do so, but I also believe we should reauthorize this program at its prestimulus funding levels.
Let me explain why. The following are the temporary expansions to TAA that were included in the stimulus, which cost about $2 billion in 2010, and, according to the Department of Labor, was estimated to cost approximately $2.4 billion in 2011 if the 2009 stimulus expansions had stayed in place.
The stimulus expanded TAA to cover workers whose employers shifted production to any foreign country, not just those--as under prior law-- whose jobs were outsourced to countries with which the United States has a free-trade agreement.
It expanded TAA coverage to the service sector and government employees who lose their jobs because of trade.
It increased the tax credit available to cover private health insurance premiums from 65 percent to 80. It increased the appropriations cap for training from $220 million to $575 million, a 160-percent increase over the previous cap.
It created the Community TAA Program, which authorizes $230 million for trade-affected communities to assist in strategic planning grants up to $5 million, sector partnership grants up to $3 million over a 3- year period, and community college and career training grants up to $1 million.
It gave $17.5 million to States for employment and case management. It lengthened the amount of time workers could receive trade readjustment allowance assistance by 26 weeks.
Finally, it revived the TAA for farmers and the wage insurance program, estimated by CBO to total about $100 million for 2 years.
So we had a program that had been expanded from its original intent, with benefits going to government employees, service sector employees, TAA benefits going to communities, TAA benefits going to farms, TAA benefits going to firms, under the dubious guise of a temporary economic stimulus.
This is what the White House and the other side in Congress were telling us had to be reauthorized in order to pass the free-trade agreements. My amendment also addresses the claim made by some that the agreement in the majority leader's substitute amendment not only reduces TAA from stimulus levels but also much lower in several years.
However, according to a recent Heritage Foundation analysis, this may not be accurate. This is important, so let me read this analysis at length. This is from the Heritage Foundation report:
Instead of cutting TAA back to pre-stimulus levels, the
proposal restores and solidifies the most alarming aspects of
the stimulus expansion at a yet unknown cost.
It keeps the 2009 stimulus expansion for service sector
workers. TAA was originally intended to provide income
maintenance and job training to workers from the
manufacturing sector. The stimulus bill expanded eligibility
to include workers from the service and public sectors. This
expansion expired in February, but the proposal restores TAA
eligibility for service sector workers.
It restores stimulus expansion of benefits for job losses
unrelated to FTAs. The proposal retains the stimulus
expansion of providing TAA benefits to any workers who lost
their jobs to overseas production, not just TAA-certified
jobs that were lost to FTAs.
It reinstates the stimulus's 161 percent increase in TAA
for workers' job training spending. The proposal cements the
stimulus spending expansion of TAA for workers' job training
at $575 million per year from $220 million--an increase of
$355 million per year.
It continues the stimulus's creation of a new and
duplicative job training program.
The proposal keeps the TAA Community College and Career
Training Program, which has appropriations authorizations of
$500 billion per year from fiscal years 2011 through 2014.
This new job-training program is just one of the 47
employment and training programs operated across nine
agencies by the federal government.
Let me repeat that. This is another proposal that spends $500 million for job training, even though we already have 47 employment and training programs operated across 9 agencies by the Federal Government.
It partially reinstates the stimulus increase in Health
Coverage Tax Credit. . . .
It solidifies the wage subsidies for older workers as a
permanent program. The pre-stimulus Alternative TAA was a
temporary five-year demonstration program that paid 50
percent of the difference between new and old wages of
displaced older workers. It subsidized the wages of older
workers earning less than $50,000 per year for up to $10,000
over two years. After changing the program's name to
Reemployment TAA, the stimulus expansion increased the wage
subsidy to $12,000 over two years for displaced older workers
earning less than $55,000 and made the program permanent.
While the proposal reduces the wage subsidies to pre-stimulus
levels, it also cements into law the permanency of the wage
subsidy program.
It retains the stimulus expansion of the union VEBA
handout. Despite having nothing to do with international
trade, the stimulus expansion of TAA extended the HCTC to
Voluntary Employee Beneficiary Associations (VEBA). A
bankruptcy court can allocate a portion of an out-of-business
employer's assets to a VEBA, which assumes responsibly for
retirees' health coverage. This expansion primarily benefits
unions. Under the proposal, the federal government would
cover 72.5 percent of the cost of retiree health benefits at
bankrupt companies. This coverage occurs regardless of
whether the bankruptcies are related to free trade.
Let's look at an example of excess created in the ``temporary'' stimulus expansion of the TAA Program that taxpayers are still on the hook for. According to a February 2011 study by Senator Coburn, entitled ``Help Wanted: How Federal Job Training Programs are Failing Workers'':
Taxpayers may have a case of indigestion when they learn,
nearly two years after the stimulus was enacted, their money
is paying lobstermen, shrimpers and blueberry farmers $12,000
each to attend job training sessions on jobs they are already
trained to do.
The stimulus reauthorized the Trade Adjustment Assistance
for Farmers program administered by the USDA, a program that
provides subsidies to producers of raw agricultural
commodities and fishermen so they can adjust to import
competition. Under the stimulus, TAA benefits were enhanced
to focus more on employment re-training.
While the Reid substitute includes a compromise to ``pare back'' some of the expansions in the ``temporary'' stimulus spending legislation of 2009, it still expands TAA benefits and eligibility beyond the prestimulus levels--by approximately, by my calculations, at least $600 million a year.
I acknowledge that expanding trade temporarily puts some of our workers at a disadvantage. I remember being roundly criticized during the 2008 Presidential campaign when I had the audacity to tell Michigan workers the truth--that many of the jobs that had left their State for cheaper labor markets overseas were never coming back. So I understand that trade can create difficulties for some American workers. I am not opposed, in principle, to supporting those workers temporarily so they can develop new skills and find new jobs. That said, let's look closer at how the Federal Government has been going about programs such as this.
Earlier this year, the GAO released a study entitled ``Multiple Training and Employment Programs: Providing Information on Collocating Services and Consolidating Administrative Structures Could Promote Efficiencies.'' Here is what the GAO reported on Federal employment and retraining programs, including the Trade Adjustment Assistance Program:
Based on our survey of agency officials, we determined that
only 5 of the 47 programs have had impact studies that assess
whether the program is responsible for improved employment
outcomes. The five impact studies generally found that the
effects of participation were not consistent across programs,
with only some demonstrating positive impacts that tended to
be small, inconclusive, or restricted to short-term impacts.
So not only are many of these worker employment and training programs duplicative, the GAO has found very little empirical evidence to support whether these programs are even accomplishing their intended goals--and what empirical evidence they have they found is, I repeat, `` . . . small inconclusive, or restricted to short term impacts.'' TAA is among these programs.
This is bad enough, but what is worse, we have not even been told how much this expansion of TAA will cost the taxpayers. We are told the legislation includes ``offsets,'' but we know they are not real. Offsets allegedly include: rates for merchandise processing fees, changes to the ``time for remitting certain merchandise processing fees,'' unemployment compensation program integrity provisions to create a ``mandatory penalty assessment on fraud claims, prohibition on non-charging due to employer fault, reporting of rehired employees to the directory of new hires.'' That is supposed to come up with hundreds of millions of dollars.
I cannot say what most of these mean, but I can say they are not real.
Even while extending the TAA prestimulus program, we need to analyze whether the TAA Program is doing what it was intended to do. The following are some of the questions and concerns we must consider:
Does the TAA Program provide overly generous benefits to a narrow population?
According to analysis from the Heritage Foundation, based on statistics from the Bureau of Labor Statistics, in the third quarter of fiscal year 2009, only 1 percent of mass layoffs were a result of import competition of overseas relocation.
Is there evidence that TAA benefits and training help increase participants' earnings?
An analysis by Professor Kara M. Reynolds of American University found ``little evidence that it (TAA) helps displaced workers find new, well-paying employment opportunities.'' In fact, TAA participants experienced a wage loss of 10 percent.
The same study found that in fiscal year 2007, the Federal Government appropriated $855.1 million to TAA Programs. Of this amount, funding for training programs accounted for only 25 percent.
In 2007, the Office of Management and Budget rated the TAA Program as ``ineffective.'' The OMB found that the TAA Program failed to use tax dollars effectively because, among other reasons, the program has failed to demonstrate the cost-effectiveness of achieving its goals.
Let me close by reminding my colleagues how we got to our current predicament. It is mid-September of 2011, 2\1/2\ years since President Obama took office, and we still have not received these important trade agreements that were finalized half a decade ago--all because of the White House's insistence on making a ``temporary'' stimulus program-- the dubious extension of TAA--into a permanent domestic spending program.
This is how George Will summed it up, writing in the Washington Post on June 8, 2011. The piece is as appropriate now as it was then:
President Obama is sacrificing economic growth and job
creation in order to placate organized labor. And as the
crisis of the welfare state deepens, he is trying to enlarge
the entitlement system and exacerbate the entitlement
mentality. . . .
On May 4, the administration announced that, at last, it
was ready to proceed with congressional ratification of the
agreements. On May 16, however, it announced they would not
send them until Congress expands an entitlement program
favored by unions.
Since 1974, Trade Adjustment Assistance has provided 104,
and then 156, weeks of myriad financial aid, partly
concurrent with the 99 weeks of unemployment compensation to
people, including farmers and government workers, and firms,
even whole communities, that can more or less plausibly claim
to have lost their jobs or been otherwise injured because of
foreign competition. Even if the injury is just the loss of
unfair advantages conferred, at the expense of other
Americans, by government protectionism.
This process should be appalling to the average American who is looking for an improving economy, not special favors to certain special interest groups.
At a time when our national debt has reached unsustainable levels, at a time when Congress and the American people face some truly painful choices about how to cut our Federal budget, at a time when some are even considering enormous and dangerous cuts to our defense spending as a way to get our fiscal house in order, this is no time to throw more money than we did before the stimulus at a Federal program that, as the GAO points out, is duplicative and possibly ineffective.
I am prepared to reluctantly support TAA if it were funded at the prestimulus level, as a recognition of reality that some form of this program is required in order to pass our existing trade agreements. But we should authorize it at prestimulus levels and not one dollar more. That is what this amendment would do. I urge my colleagues to support it.
I ask for the yeas and nays.
Madam President, I suggest the absence of a quorum.
Mr. President, the stimulus passed in 2009 was purported to be temporary. As part of that massive piece of legislation, we made a significant expansion and added at least $600 million a year to the Trade Adjustment Assistance Program. This amendment would cut back to the prestimulus number of the TAA.
It is pretty simple. It would save at least $600 million per year on questionable programs of questionable effectiveness. But the point is, the stimulus was supposed to be a temporary increase in spending and not a permanent one. The Reid package makes most of it--at least 65 percent of it--permanent. The least we can do is cut it back to prestimulus levels, which is supported by the National Taxpayers Union. I know that will be very persuasive to my friends on the other side of the aisle.
I ask for the yeas and nays.
Mr. President, I ask the majority leader--I need about 2 minutes for the chairman and I to have a colloquy.
Mr. President, I wanted to inform the majority leader, I was going to have a brief colloquy with the chairman who, I think, will be back in a few minutes.
In the meantime, I suggest the absence of a quorum.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I ask unanimous consent to engage in a brief colloquy with the distinguished chairman.
Mr. President, the original Jackson-Vanik amendment was offered to the Trade Act of 1974, and it was led in this body by the great Democratic Senator of Washington, Henry ``Scoop'' Jackson. That amendment prohibited the United States from entering into Permanent Normal Trade Relations with any country that placed restrictions on the freedom of emigration and other human rights of its people. This law was later expanded to cover countries with non-market economies. The major impact of the Jackson-Vanik restriction was that it prevented the United States from granting ``most-favored nation'' trading status to the Soviet Union, which at the time was placing awful restrictions on the ability of its Jewish citizens to emigrate and flee the persecution they experienced behind the Iron Curtain.
Jackson-Vanik applied to Moldova when it was part of the Soviet Union, and it remained in place following Moldova's independence 20 years ago. This made sense at the time, because the country continued to be ruled by communist governments, which ensured an unfortunate continuity with Moldova's Soviet past at a time when the country's neighbors were reaping the benefits of liberation.
But Mr. President, the situation in Moldova is now fundamentally changed. In August 2009, a coalition of democratic and reformist parties managed to win power in what international organizations deemed a free and fair election. For the first time in two decades, Moldova had a noncommunist government, and with it, the potential for real reform. The goal of this coalition is reflected in the name that they have given themselves: the Alliance for European Integration. Their platform is to deepen Moldova's democratic institutions, pursue free market reforms, fight corruption, and work on integrating Moldova into Euro-Atlantic institutions. This is a new generation of leaders, and they represent the great hopes of their citizens.
I visited Moldova in June. I met at length with their Prime Minister and other senior leaders, and I can tell you firsthand this government is committed to leading Moldova toward a future of political and economic freedom.
Yes, major challenges remain to the realization of this vision, but for the first time in Moldova's history as an independent nation, its current government is on the right track. They are pursuing the right goals and policies. Their intentions are good and admirable.
In the face of continued opposition from elements in Moldova that want to drag the country back to its troubled past, the current government is trying to move the country forward. They are taking on the hard challenges. When I asked how we in the United States could best support their efforts, all they asked of me--all they asked of us in Congress--is one thing: It is not additional foreign assistance. It is not more of our taxpayers' dollars, although that assistance is important too. It is the repeal of Jackson-Vanik, so Moldovans can develop their own country, grow their own economy, and deepen their own free market reforms through normal trading relations with the United States. Nothing we could do would provide greater moral and material support for Moldova's reformers.
I wish to thank Senator Baucus for his continued support of the people and the country of Moldova. I understand that any amendment to the legislation that is pending would be harmful to the progress of the trade agreements, and I appreciate that fact and hope the chairman can perhaps--hopefully before the end of the year--take up the repeal of Jackson-Vanik as it applies to the country of Moldova, a country that is very much in need of it.
I want to read a statement made by Vice President Biden during his visit to Moldova this year.
He said:
We will work with the Congress and with your government to
lift the Jackson-Vanik amendment and establish permanent
trade relations. We believe that will be good for Moldova and
for the United States.
Mr. President, I ask unanimous consent to have printed in the Record a letter from the National Council on Soviet Jewry concerning Moldova.
I again thank the chairman for his consideration and for his continued support for the people of Moldova.
I thank the chairman. I know he has an incredibly heavy schedule, with the legislation before us today and other matters before the committee, but I also know he knows--and I want to assure him--when the people of Moldova hear of his commitment, this will be a happy day in Moldova. I thank the chairman.