House Rejects Obama's Corporate-Friendly Trade Deal In Stunning Defeat

The U.S. House of Representatives rejected the Trade Adjustment Assistance provision of the TPP this afternoon - the first in a series of trade bills - designed to lessen the blow of any potential (and very likely) negative effects resulting from the broader Trans-Pacific Trade deal. The reaction in Washington appears to be genuine surprise, mostly at the number of Democrats who broke ranks and voted against party leadership, including President Obama who had been lobbying fellow Democrats for support for weeks. As The Atlantic’s Russell Berman would explain:


The Obama administration believed it had the votes necessary to pass the most-contentious piece of its trade legislation—Trade Promotion Authority—that would allow the president to finalize agreements with Pacific Rim nations and the European Union. But the labor movement was not prepared to give up. Instead, it caught the administration off guard by launching a surprise attack on legislation known as Trade Adjustment Assistance, a program designed to help workers displaced by trade and one which Democrats—and organized labor—have overwhelmingly supported in the past. Just 40 House Democrats—less than one-quarter of the caucus—voted for the bill, which fell in a landslide, 302-126. By defeating the aid measure, the labor movement rendered the administration’s careful work rounding up votes for Trade Promotion Authority largely irrelevant.

This is an important point: Trade Adjustment Assistance was seen as a Trojan horse by TPP opponents- providing populist cover for Congress while ultimately serving the pro-corporate ends of the larger trade deal. The White House and GOP allies like Speaker Boehner thought they had found a workaround in the TAA, a compromise to alleviate worries about job displacement while sewing a traditional union compromise in the fabric of the TPP. It appears, however, for now these efforts were for naught.  

In order to salvage some kind of victory, GOP House majority leader, Kevin McCarthy, followed the TAA defeat with a vote on Fast Track, or Trade Promotion Authority, which narrowly passed 219 to 211 thanks to overwhelming Republican support. But this vote is ultimately symbolic due to the fact that the Senate and House bills have to be reconciled. After the defeat of the TAA, this is far from certain.

The Congressional Progressive Caucus is celebrating the vote as an unqualified victory, writing in a fundraising email this afternoon. "Corporate forces will try to bring "fast track" back -- but today's vote is one of the biggest progressive victories in years. As we celebrate, let’s take a second to remember how far we’ve come. Just a few months ago, this corporate-backed trade agreement was a done deal. The fix was in. Most Americans didn’t even know what TPP stood for, and the media was silent on the issue. But that was before bold progressives fought back hard."

As for the “trojan horse” aspect that ultimately lead to the bill’s defeat. David Dayen of the Finacial Times has a good explanation: (via Jonathan Cohn):

When it comes to trade, for over 40 years — ever since the origin of the fast-track process — that sweetener for Democrats has been trade adjustment assistance (TAA). This program provides federal funds for workers displaced by free trade agreements, from job training and placement services to relocation expenses to income support to help with health insurance premiums. Democrats have traditionally supported TAA, even though it serves a corporate trade agenda that has helped to hollow out the U.S. manufacturing base and limit regulatory authority. It’s the spoonful of sugar that makes the trade medicine go down, so Democrats can go back to their districts and say that at least they got aid for outsourced workers.

The problem is there’s substantial disagreement on whether TAA even helps workers get new jobs. The far better alternative is to prevent policies that displace workers in the first place; TAA is like throwing a quarter in the tip jar for somebody that just lost their house. But because of the Washington dance, Democrats effectively bless deals that sell out American workers by voting for TAA, mainly because it sounds good — even though the benefits are quite uncertain.

The White House and GOP leaders are expected to push for a re-vote in the coming weeks. 

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