Senate OKs retraining program key to U.S. trade deals

WASHINGTON Thu Sep 22, 2011 8:19pm EDT

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WASHINGTON (Reuters) - The Senate on Thursday handed President Barack Obama a victory by passing a bill to help workers displaced by foreign competition, but the path to passage of three long-delayed trade deals remained murky after the vote.

The Senate voted 70-27 to approve a bill containing a revamped Trade Adjustment Assistance (TAA) program, which Obama has demanded as his price for sending free trade pacts with South Korea, Colombia and Panama to Congress.

Obama made that demand because Republicans balked at renewing the long-time program earlier this year.

"Today's vote is a major victory for American workers and a key step forward in our efforts to approve the job-creating free trade agreements," Senate Finance Committee Chairman Max Baucus, a Democrat, said in a statement.

Senate Republican Leader Mitch McConnell urged Obama to now show some "trust" in Republicans by submitting the agreements to Congress before the House of Representatives has voted on the Trade Adjustment Assistance bill.

House Speaker John Boehner echoed that demand, promising the pacts could be ready for Obama's signature by mid-October if the president sent them now.

"We await the president's submission of the three trade agreements sitting on his desk so the House can consider them in tandem with the Senate-passed" legislation, Boehner said.

Speaking for the administration, U.S. Trade Representative Ron Kirk said the Senate action was an "important step."

But his statement skirted the issue of when Obama would submit the agreements to Congress, noting "discussions continue with congressional leadership on how these bills will move through the legislative process."

"The trade agreements, along with Trade Adjustment Assistance, are an integral part of the President's plan to create jobs here at home. The President looks forward to their prompt passage."

Business groups such as the U.S. Chamber of Commerce remain optimistic the Senate vote will lead to approval of the trade deals -- each of which was negotiated and signed more than four years ago when George W. Bush was in the White House.

"At a time when millions of Americans are out of work, these agreements will create real business opportunities that could generate hundreds of thousands of new jobs," Chamber senior vice president Myron Brilliant said.

SENATE BILL SCALES BACK 2009 REFORMS

The TAA retraining and income assistance program dates back to 1962 and was expanded in the 2009 stimulus bill to cover more workers and provide more generous health insurance benefits.

However, the expanded provisions expired at the beginning of this year and Republicans bent on reducing government spending balked at renewing them, setting up a fight with Obama and congressional Democrats.

The revamped TAA bill passed by the Senate renews many of the 2009 reforms through 2013, such as covering service industry workers in addition to those in manufacturing.

But it reduces the number of weeks of income support to 117 from 156 in the 2009 law, with up to 13 additional weeks available only under certain circumstances.

It also scales back a tax credit to help unemployed workers pay for health insurance, and makes it harder for individuals to receive income assistance if not in a retraining program.

The package costs about $900 million over three years, compared to about $2.1 billion for the 2009 reforms.

During Senate action, Democrats defeated several Republican attempts to further reduce program costs or explicitly tie TAA to approval of the pending trade deals.

Senator Orrin Hatch, the top Republican on the Senate Finance Committee, said he objected to the program on both fiscal and philosophical grounds.

"As the program is expanded to include more and more people and entities ... the myth that trade is bad for the American worker finds ready fodder and continues to build. Instead of helping build the case for trade, TAA certifications are used to show that trade is bad," Hatch said.

The Senate legislation also includes a renewal of the Generalized System of Preferences, which waives duties on thousands of goods from developing countries to help growth in those countries and reduce costs for U.S. manufacturers.

That program, which dates back to the early 1970s, expired at the end of 2010, forcing U.S. companies to pay taxes this year on goods that usually come in duty-free.

(Editing by Mohammad Zargham and Eric Walsh)

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