Senate committee considers TAA reauthorization.

UPDATE 7/15/2011: In a speech to the U.S. Chamber of Commerce on July 14, White House Chief of Staff Bill Daley indicated that the administration would likely submit the South Korean free trade agreement with TAA reauthorization language prior to the August recess. NSC will continue to monitor this process and provide updates as new information becomes available.

July 11, 2011 

On July 7, the Senate Finance Committee approved a package of free trade agreements that included language to expand and reauthorize the federal Trade Adjustment Assistance (TAA) program. While the committee vote was technically nonbinding—by law, Congress cannot amend trade agreements once they are submitted by the President—the hearing represented an important opportunity for the Senate to signal their priorities on TAA reauthorization and the need to invest in the skills of the U.S. workforce. Finance Committee Chairman Baucus (D-MT) had originally scheduled a markup for the bills on June 30 but committee Republicans refused to attend that markup – denying the committee the quorum necessary to consider the measures—to express their opposition to the inclusion of the TAA language in the trade package.

The Obama administration announced in May that it would not submit the trade agreements for congressional approval without a deal to extend TAA, a position that received strong support from House and Senate Democrats, as well as a bipartisan group of governors. On June 28, Chairman Baucus announced that a compromise had been reached with the White House and House Ways and Means committee chair Dave Camp (R-MI) to include a scaled-back TAA reauthorization as part of the broader trade package, and included the language in the South Korea trade agreement.

TAA, which provides job training and other benefits to workers who have lost their jobs as a result of foreign trade, is currently authorized through February 12, 2012. Congress significantly expanded the program as part of the American Recovery and Reinvestment Act in 2009—including extending eligibility to service sector workers and nearly tripling the amount of funding available for training services—but these expanded provisions were allowed to lapse earlier this year, and the program is now operating according to the more limited provisions of the pre-ARRA program. The White House and some congressional Democrats have been seeking to renew the 2009 amendments as part of a compromise to advance long-stalled free trade agreements with South Korea, Colombia, and Panama, but have faced strong resistance from Republicans.

In the draft legislation released by the Committee, the 2009 amendments would be extended through 2013, though with some limitations designed to reduce program costs, including proposals to:

• Cap funding for job training, case management, and other activities at $575 million for Fiscal Years (FY) 2012 and 2013, plus $143.75 million for the first quarter of FY 2014 (under the 2009 amendments, this cap applied only to training expenses);
• Reduce the maximum number of weeks eligible workers could receive income support from a maximum of 156 weeks to 130, eliminating a provision that allowed additional support for workers engaging in prerequisite or remedial training;
• Restore expanded eligibility under the 2009 amendments for service sector workers, but not for public sector workers;
• Eliminate two grant programs created under the 2009 reauthorization – the TAA for Communities program under the Department of Commerce and the Industry or Sector Partnership grant program under the Department of Labor. The TAA Community College and Career Training Grants would not be affected by this change; and
• Establish performance accountability measures for the program, including indicators relating to employment, earnings, and credential attainment for program participants (the 2009 amendments included employment and earnings measures, but not credential attainment).

During the committee mark-up a number of Senators expressed their opposition to TAA reauthorization, citing now familiar arguments about duplication and the ineffectiveness of federal job training programs. Ranking Member Orrin Hatch (R-UT) offered an amendment to strip the TAA language out of the bill. While the amendment was not adopted, it is possible that TAA will ultimately be considered separately from the trade agreements (as many Members of Congress object to the inclusion of TAA with the trade agreements). Should this be the case, it is likely that we will see additional efforts to defund or otherwise limit the program.  

The Ways and Means committee held its own mock markup of the trade bills on July 7, but did not include TAA language. Chairman Camp indicated in his opening remarks that while he supported the substance of the compromise language on TAA, the White House and congressional leaders had not yet agreed on how to structure the final legislation.

National Skills Coalition supports a robust reauthorization of TAA at the 2009 eligibility and funding levels, to help ensure that workers impacted by foreign trade are able to access the training and related services necessary to transition to jobs and careers in new industries. We will continue to monitor developments relating to this important program, and provide updates as new information becomes available.