[Congressional Record Volume 148, Number 57 (Wednesday, May 8, 2002)]
[Senate]
[Pages S4052-S4054]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             ANDEAN TRADE PREFERENCE EXPANSION ACT--Resumed

  The PRESIDING OFFICER. The clerk will report the pending business.
  The assistant legislative clerk read as follows:

       An act (H.R. 3009) to extend the Andean Trade Preference 
     Act, to grant additional trade benefits under that Act, and 
     for other purposes.

  Pending:

       Daschle amendment No. 3386, in the nature of a substitute.
       Dorgan amendment No. 3387 (to amendment No. 3386), to 
     ensure transparency of investor protection dispute resolution 
     tribunals under the North American Free Trade Agreement.


                           Amendment No. 3387

  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
3387.
  The amendment (no. 3387), was agreed to.
  Mr. REID. Mr. President, I move to reconsider the vote.
  Mr. DASCHLE. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Madam President, I would like to take this time to talk 
in some detail about the Trade Adjustment Assistance Reform Act, the 
underlying bill. This is a bill which is a renamed version of S. 1209, 
which was reported out of the Finance Committee last December. It is 
the first part of a trade package to which the pending motion--actually 
it is the first part of the substitute underlying the bill.
  I think it is important to put this bill in context. That is why I 
want to spend some time reviewing the history of the TAA program, its 
purpose, and recent proposals for reform, and how those factors are 
reflected in the bill.
  I also want to review some important points about what this bill does 
and does not do. Unfortunately, there is a lot of misinformation out 
there. I want to clear up some of the inaccuracies that have cropped up 
about specific parts of the bill.
  Last, I want to review my efforts to make this a bill with bipartisan 
appeal. That has been my goal--and, I think, one I share with Senator 
Daschle and Senator Bingaman--from the beginning. I really believe we 
have achieved that goal. So I want to touch on how that happened as 
well.
  First, I will start with a little history.
  Trade Adjustment Assistance--what we call TAA--was created in the 
Trade Expansion Act of 1962 and revised to its current form in the 
Trade Act of 1974. It was last revised in the 1993 NAFTA Implementation 
Act, which created a special program for NAFTA-impacted workers.
  The purpose of the TAA program is to help workers who lose their jobs 
and firms that face layoffs as a consequence of international trade.
  In 1962, President Kennedy said.

       Those injured by . . . trade competition should not be 
     required to bear the full brunt of the impact. There is an 
     obligation [for the Federal Government] to render assistance 
     to those who suffer as a result of national trade policy.

  When President Kennedy said those words, the United States had a 
trade surplus. Imports amounted to less than 5 percent of GDP. But the 
President and a bipartisan majority of the Congress were wise enough to 
realize that the benefits of increased trade are not evenly 
distributed. They realized that we, as a government, have an obligation 
to help those who are displaced by trade policy to get back on their 
feet.
  Today, as well all know, there is a huge trade deficit. Imports as a 
share of GDP have tripled. These facts can lead to only one 
conclusion--the rationale for having a strong, effective trade 
adjustment assistance program are even stronger today than they were 
when the program was created. That is why 66 percent of Americans 
responding to a recent poll agreed with the following statement:

       I favor free trade, and I believe that it is necessary for 
     the government to have programs to help workers who lose 
     their jobs.

  Congress has regularly reauthorized the TAA program--about every 5 
years--and always with bipartisan support. It was with that history in 
mind that Senator Bingaman, Senator Daschle, and I embarked on this 
current exercise to reauthorize and reform the program.
  But before turning to the specific provisions of the bill, I want to 
spend a moment on what the current TAA program does.
  There are currently three TAA programs: regular TAA for workers, 
NAFTA-TAA for workers, and TAA for firms.
  The two worker programs run out of the Department of Labor. They help 
workers who lose their jobs due to trade to get retrained for new 
careers. To achieve that goal, TAA provides a very modest level of 
income support to tide over workers while they retrain. It also pays 
for training and provides job search and relocation assistance where 
needed.
  The TAA for firms program provides technical assistance to mostly 
small- and medium-sized businesses that face layoffs due to import 
competition. The program helps firms become more competitive so they 
can retain and expand employment.
  People sometimes call TAA the ``Cadillac'' of U.S. displaced worker 
programs. I find that misleading. It is true that TAA provides more 
benefits that other U.S. programs for displaced workers. But please 
remember that no one wants to be in TAA. The prospect of a government 
check for about $250 a week is not an incentive to linger in this 
program when you have a mortgage to pay, a family to feed, and medical 
expenses to pay. I hope we can get past this ``Cadillac'' discussion 
and get down to the real issues.
  The TAA program has a 40-year history, and we have learned some 
things from experience. Over the last few years there has been a 
growing consensus that it was time to take another look at this program 
and see how it could work better.
  In the past 2 years, the GAO has done four very comprehensive studies 
of every aspect of the TAA program. GAO has noted some problems in the 
way the program operates and made some concrete recommendations for 
reform.

[[Page S4053]]

  In addition, the bipartisan Trade Deficit Review Commission has 
looked at TAA. The Commission included our current USTR, Ambassador 
Zoellick, as well as Secretary Rumsfeld, former USTR Carla Hills, and 
others representing a wide range of views. As you probably know, they 
did not agree on much of anything. But their report contains one 
unanimous chapter recommending revision and expansion of the TAA 
program.
  The GAO and the Trade Deficit Review Commission's recommendations for 
improving the TAA program include expanding TAA to cover secondary 
workers and assisting TAA participants with health insurance.
  Also, they recommend making sure income support lasts as long as 
training. After all, you need work while you are getting trained.
  They recommend creating a performance evaluation system to track 
program outcomes to see if it is working.
  They recommend providing wage insurance.
  They recommend assisting trade-impacted communities and assuring 
adequate funds for training.
  That is the unanimous recommendation of the Trade Commission.
  That, in a nutshell, is how this bill began. We didn't start out 
trying to add as many bells and whistles as possible to this program. 
We didn't add too much in the expectation of negotiating down later.
  We simply took the nonpartisan and bipartisan recommendations of the 
GAO and the Trade Deficit Review Commission and wrote them into 
statutory language. This is basically what we did along with Senators 
Daschle and Bingaman. And we tried to do it in a fair and sensible way 
that would make the program work better and treat all trade-impacted 
workers equally.
  Let me take a few minutes now to walk through some of the major 
provisions of the bill.
  The first thing this bill does is unify the two TAA programs for 
workers--regular TAA and NAFTA-TAA. The unified TAA program pretty much 
adopts the existing NAFTA-TAA rules, which are the more recent. 
Consolidating these two programs creates a single set of application 
procedures, eligibility criteria, and training requirements. This makes 
the program a lot more user friendly for workers and easier for the 
Department of Labor to run. Unlike current law, the unified program 
will provide income support for the full length of training. That way 
workers can finish the training they need instead of dropping out when 
income support runs out. The Administration supports these changes.
  The second thing this bill does is extend TAA coverage to workers who 
lost their jobs when their plants relocate abroad.
  Right now, these so-called ``shifts in production'' are covered under 
NAFTA-TAA, but not under regular TAA. That means that if a factory 
relocates to Mexico or Canada, the displaced American workers are 
covered. But if the factory relocates to Thailand or Chile, they are 
not. That is not fair. It is not sensible.
  This is not a fair or sensible way to run a trade adjustment program. 
There is no difference between a worker whose job moves to Mexico and 
one whose job moves to China. Their adjustment needs are exactly the 
same. The bill cures the unfairness of current law by extending TAA to 
cover shifts in production to any country.
  The third thing this bill does is extend TAA coverage to secondary 
workers. Secondary workers are workers who supply parts to or perform 
finishing operations on a product produced by another so-called 
``primary'' firm.
  Right now, regular TAA does not cover secondary workers. Think about 
a case where an auto assembly plant closes because of import 
competition from Japan or Korea and that forces the nearby plant that 
supplies tires for the cars to close. All these worker lost their jobs 
for the same reason. But right now, the auto plant workers get TAA 
benefits while the workers at the nearby tire plant do not.
  In 1993, secondary worker coverage was added in NAFTA-TAA. But 
workers can only get the benefits when the imports are from Mexico or 
Canada. At that time, it made some sense to extend this coverage for 
trade between the three countries in the new NAFTA agreement.
  But now, nearly ten years later, it is time to extend the same 
benefits to all secondary workers. When we added secondary workers in 
NAFTA, it was understood that eventually it would only make sense to do 
it for everyone. Since then, the WTO Uruguay Round agreements have 
expanded trade with 145 countries, we have granted permanent normal 
trading relations status to China, and we have entered an FTA with 
Jordan and a trade agreement with Vietnam. It doesn't make sense 
anymore to limit these benefits to imports from Mexico and Canada. It 
is time to apply them across the board.
  Now there have been a lot of misunderstandings about the secondary 
worker coverage in this bill. You have probably heard someone say that 
this is a radical expansion of the concept of secondary workers--that 
it will sweep in all sorts of people with very tenuous ties to the 
imports at issue. I have to say that the people making those claims 
have not read the bill very carefully. The definitions of secondary 
workers in the bill are based closely on the definitions used in the 
NAFTA. We have broadened the definition of supplier firms slightly, to 
catch some people we think are unfairly left out under current law. But 
other than that, this bill does not change how secondary workers are 
defined--it just makes secondary worker coverage universal.
  The fourth thing this bill does is reauthorize the TAA for firms 
program. This is a jewel of a little program that operates out of the 
Commerce Department. It has helped small- and medium-sized companies in 
Montana and nationwide that face layoffs due to import competition. 
Technical assistance provided under this program helps these firms 
become more competitive so they can retain and expand employment. The 
program is very cost effective. It requires the firms being helped to 
pay a share of the cost of assistance, and it pays the government back 
in federal and state tax revenues when the firms succeed.
  The fifth feature of the bill is a new TAA program for communities.
  Communities that experience mass layoffs due to trade competition are 
really in a bind. This is especially true in smaller and rural 
communities, such as we have in Montana. These communities may not have 
a lot of job opportunities for displaced workers, even with TAA 
retraining. Indeed, one of the main criticisms of the current TAA 
program is that it does nothing to make sure there are jobs for workers 
at the end of the retraining process.
  There are a number of federal programs out there that might offer 
some help. They are all over the map--in Commerce, Treasury, Labor, 
Agriculture, HUD, and the SBA, just to name a few. But these 
communities have no way to start, no go-to person or resource to guide 
them through the maze of potential help. And the federal government 
doesn't make it any easier. There is very little coordination of 
response among the various agencies. Finally, even if communities can 
find these Federal resources, most existing programs are not tailored 
to the special needs of trade-impacted communities.
  This bill tries to make federal economic assistance work better for 
trade-impacted distressed communities in a few simple ways. It creates 
a single office responsibility for coordinating the federal response. 
And it creates a single point of contact for the community throughout 
its recovery process. It gives communities the technical assistance 
they need to develop a strategic plan--basically a roadmap for economic 
recovery. That helps ensure that Federal resources are being used in 
the most coordinated and cost-effective way possible. Finally, it makes 
sure that there are expertise and resources tailored to the special 
needs of trade-impacted communities.
  The next real innovation in this bill is the TAA program for farmers, 
ranchers, and fishermen.
  Family farmers, ranchers and fishermen are nominally covered by the 
current TAA programs for workers. But hardly any have participated. 
They usually can't qualify, because they don't become unemployed in the 
traditional sense and they often don't qualify for unemployment 
insurance--two TAA prerequisites.
  In NAFTA-TAA, there was an attempt to shoe-horn family farmers into

[[Page S4054]]

the program by waiving some of the eligibility requirements. But even 
that has not worked to bring trade-impacted farmers into the program.
  After several decades of trying with little success to squeeze 
farmers into eligibility rules designed for manufacturing workers it is 
time to try something new.
  What this bill does is create a TAA program better tailored to the 
needs of farmers, ranchers, and fishermen. Basically, the program 
creates a new trigger for eligibility. Instead of having to show a 
layoff, the farmer, rancher or fisherman has to show commodity price 
declines related to imports.
  The trigger is different, but the program serves the same purposes. 
It is basically a hybrid of the TAA for workers and TAA for firms 
programs, using parts of each that make sense for agricultural 
producers. It assists the farmer, rancher or fisherman to adjust to 
import competition, to retrain, to obtain technical assistance, and to 
have access to income support to tide them over during the process. And 
the income support is capped and is subject to gross income limitations 
to make sure that the program is not being abused.
  The last important innovation in this bill deals with health 
insurance. One common criticism of the existing program is that it does 
nothing to help workers with health insurance.
  It is virtually impossible for a worker to pay the mortgage, feed his 
family, and pay health insurance premiums on $250 a week. The worker 
faces a terrible choice. He can retrain under TAA in the hope of a 
better job--but risk going without health insurance for his family for 
up to two years. Or he can pass up the opportunity to retrain for a 
better future and take a dead-end job right away to make ends meet.
  The bipartisan Trade Deficit Review Commission concluded that lack of 
assistance with health insurance is a significant disincentive to 
complete TAA training. As I said before, this group unanimously 
recommended that the Government help workers bridge the insurance gap 
between old and new jobs. And that is what we have done with this bill. 
Again, Secretary Rumsfeld, Ambassador Hills, and Ambassador Zoellick 
agreed to this point.
  The bill before us today includes a 73-percent advanceable, 
refundable tax credit for COBRA premiums for workers eligible for TAA 
benefits. TAA participants who are not eligible for COBRA can use the 
tax credit to purchase health insurance from various State-sponsored 
group plans.
  This issue has been surprisingly controversial. I am not saying that 
there is only one right way to address this issue. But what has shocked 
me is the number of voices suggesting that we should do nothing at all; 
that is, that we not help people, who are displaced on account of 
trade, with health insurance. That is just not acceptable. I hope we 
are past that now and headed toward a reasonable compromise and that we 
can move forward constructively to help people who need health 
insurance.
  Now that I have gone over the main parts of the bill, I want to speak 
a little about the tradition of bipartisanship on trade adjustment 
assistance.
  Since its inception, the TAA program has always enjoyed wide 
bipartisan support. As I said before, a lot of work has gone into 
making sure this bill is no exception.
  Before the bill was drafted, we consulted widely with our colleagues 
on both sides of the aisle. We have continued that outreach throughout 
the process. I thank again, Senator Bingaman and Senator Daschle for 
their leadership on this issue. But I also thank Senator Grassley, 
whose proposal with Senator Conrad for a TAA for farmers program became 
the core of the farmers and fishermen portions of this bill. And I 
thank Senator Snowe, who has made some very important contributions to 
the bill dealing with fishermen, small businesses, and other issues. 
Her support and cosponsorship are very much appreciated.
  We have also talked with the administration. They raised some 
technical and not-so-technical issues, and we have been able to come to 
understandings on many of them.
  The administration wanted us to tighten up training waivers, and we 
did. They wanted us to cap the wage insurance program, and we did. They 
wanted us to revise TAA's on-the-job training provisions to work more 
like WIA. We did. They wanted us to clarify the definition of secondary 
workers and to make sure the Department of Labor has enough time to 
consider secondary worker petitions. We did that, too.
  This process of give and take has been healthy. It has been useful. 
And I think the result is a good, solid, thoughtful bill, one that will 
make this program more fair, more efficient, and more user friendly.
  If we want to rebuild the center on trade, improving trade adjustment 
assistance is critical. It is an integral part. It is a necessary part. 
I urge all my colleagues to support this provision and support the 
larger trade package, particularly when we proceed to consider it at a 
later point either this week or next.
  I thank the Chair. And I particularly thank my friend from Alaska for 
his indulgence.

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