“When considerations of national policy make it desirable to avoid higher tariffs, those injured by that competition should not be required to bear the full front of the impact.  Rather, the burden of economic adjustment should be borne in part by the Federal Government.”

When President Kennedy spoke these words in 1963 he laid out a simple vision of pursuing free trade for the good of the country as a whole, but at the same time ensuring that the costs, which are inevitable, are not borne solely by workers who lose their jobs due to increased competition. There have been many new trade agreements in the intervening more than half a century, but the basic policy articulated by Kennedy has held up.  Trade Adjustment Assistance (TAA) has been in place to help workers, farmers, and firms that may lose from trade even as the country as a whole may benefit.  Undoubtedly, the existence of TAA did make it politically easier for the United States to lead the world toward freer trade.

ADVERTISEMENT

Sadly, in recent weeks, that bargain has begun to fray and is now fundamentally endangered.  There is now the real possibility that the United States will embark on a new round of trade agreements without TAA in place because of political maneuvering in the Congress.  That is simply an unacceptable outcome.

TAA has been revised a number of times over the years.  The most recent major rewrite was in 2002 as part of the last grant of Trade Promotion Authority (TPA) to negotiate new trade agreements.  It included an expansion of TAA to workers who lose their jobs because their employer moves overseas, an expansion to cover “secondary workers” (workers whose job loss is the result of the factories they supply close because of imports or move overseas), a program to encourage older workers to take new jobs known as wage insurance, and limited health benefits through a tax credit.  The program was expanded further in 2009 and 2011 to service workers and other important changes were made to TAA.  But most of those provisions expired at the end of 2013 -- though some are revived in the bill now before the Congress.

For most workers receiving TAA, the primary benefit is income assistance at a unemployment compensation level for up to two years while they train for new jobs with government assistance.   Smaller programs provide important but limited relief to farmers and firms suffering from international competition.  In 2011, TAA provided benefits to about 30,000 workers..

Critics rightly point out that TAA’s record is far from perfect.  Those from the right say that TAA trained workers have had difficulty finding jobs and that other programs exist.  It is true that TAA workers have difficulty finding jobs at a similar level to the ones they lost in large part because they were in high-paying sectors and they are older workers who have more difficulty making the adjustments to find new employment, such as moving, leaving the industry they have worked in for decades, etc.  Normally, the easiest workers to employ of groups certified for TAA find employment on their own or with little assistance  No program has demonstrated it can do better servicing this same difficult population.  The only real alternative – known as the Workforce Investment Act (WIA) – provides dramatically fewer benefits than TAA.

Critics on the left argue that the program should be available to all workers that lose their jobs.  They are generally less opposed to TAA as they are advocates that all workers have access to the same benefits.  In the current U.S. political context, that seems an unlikely outcome.

The TAA legislation now before the Congress is certainly no panacea for the costs of trade.   But – whatever its flaws (and it surely has some) – the legislation would provide assistance to tens of thousands of workers at a cost of $1.8 billion through 2020.  Trade advocates estimate the benefits to the US economy of new trade agreements likely to be concluded under TPA run into at least the high tens of billions of dollars and the underlying benefits of free trade over the last 50 years into the trillions.  In this context, TAA seems a very modest life boat for those adversely impacted by trade – a part of a rational and fair American trade policy.

Due to the complexities of the current legislative situation, many of those in Congress that have truly brought TAA to the brink of death today are those that are most vocal in support of working Americans and most concerned about the costs of freer trade.  Were he still alive, one cannot help wonder what President Kennedy would make of this turn of events.                

Mastel is a senior adviser to the Trade Adjustment Assistance Coalition  He was the lead Senate trade staff person on the Trade Act of 2002, which included a major TAA provision.  He is currently with Kelley, Drye & Warren.