“YES” on Flake Motion to Strike Trade Adjustment Assistance (TAA) from Trade Promotion Authority (TPA)

This week, the Senate will vote on a motion to strike Title II from the Trade Act of 2015 (H.R. 1314), which is the president’s request for fast track authority.   The amendment, offered by Sen. Jeff Flake (R-AZ) 70%, would strike the extension of the Trade Adjustment Assistance (TAA) program.  If adopted TAA would be removed from the bill and senators would have the ability to debate and vote on the Trade Promotion Authority on its merits.

The Heritage Foundation’s David B. Muhlhausen, Ph.D. and James Sherk explain TAA is an ineffective and wasteful program funded by gimmicks:

Ineffective. Mathematica concluded that TAA financially hurt both its participants and society overall. A cost-benefit analysis found that the net benefit to society of TAA was a negative $53,802 per participant. Taxpayers bore half of the cost, and the economy could have put the resources spent on TAA to productive use elsewhere. However, displaced workers bore the other half of the program’s cost. In net present-value terms, the typical TAA participant experienced $26,837 lower total earnings and income despite receiving federal benefits.

Wasteful. Companies qualify for TAA by showing that they have laid off workers while imports of a “like” product have increased.Foreign trade need not be the primary reason that the company laid off workers—only an “important” contribution to it. Thus, the Obama Administration could grant TAA certification to both Hostess and Solyndra employees, despite foreign trade having little to do with their problems.

Gimmicks. Aside from budget gimmicks, these bills also lack any fiscal responsibility. They demonstrate the typical spend-now-pay-later Washington status quo. … There is little need to convince the American public that Congress will spend the more than $2 billion on TAA over the next five years, but who actually believes future Congresses will abide by spending cuts 10 years from now?

Free trade helps the economy and American workers. Free market conservatives should never concede otherwise, especially not by extending ineffective programs that waste taxpayer dollars and hurt beneficiaries. As Heritage Action noted earlier this month, free-market conservatives are understandably split on this president’s request for fast track authority and the inclusion of  an egregiously ineffective welfare program in a bill intended to promote trade will only exacerbate the problem.

Heritage Action supports Flake’s motion to strike and will include it as a key vote on the legislative scorecard.

Related:
Heritage Action: Trade Adjustment Assistance Undermines Free Trade Push
Heritage: Trade Adjustment Assistance Enhancement Act: Budget Gimmicks and Expanding an Ineffective and Wasteful “Job-Training” Program