Congress mulls trade safety for service sector workers

By Doug Palmer

WASHINGTON (Reuters) - Legislation to help win approval of three free trade deals pending in Congress could qualify millions of U.S. service industry workers, in jobs ranging from low-level data entry clerks to high-paid financial analysts, for government aid if their jobs move overseas.

For decades, only manufacturing workers have been eligible for job retraining and extended unemployment benefits under the federal trade adjustment assistance program.

Democrats want to extend the program to the huge services sector, making it "key to everything on the trade front. I can't see the free trade agreements moving through Congress until something on TAA is done," said Greg Mastel, a senior adviser at the Akin Gump Strauss Hauer & Feld law firm.

Even then, President George W. Bush faces a big challenge to win approval of trade deals with Colombia and South Korea before he leaves office in January, although a third one with Panama could be less of a problem, Mastel said.

Each year, about 50,000 to 60,000 U.S. workers who have lost their jobs due to foreign competition enroll in the TAA program, which provides up to two years of retraining and income support at a cost of about $900 million annually.

The Congressional Budget Office estimated that a bill passed last year by the House of Representatives to allow displaced service industry and public sector workers to receive the aid would eventually expand enrollment by 80,000 per year and boost costs by about $6.2 billion over 10 years.

NO WHITE HOUSE PLAN FOR REFORM

Bush has repeatedly said he wants to work with Congress on legislation to reform the decades-old program, but threatened to veto the House bill.

One reason the White House budget office gave was the House bill did "not clearly articulate" job losses must be caused by trade for service and government workers to receive aid.

The White House also has frustrated some advocates of TAA reform by failing to put forward its own proposal.

"It would be more constructive if the administration were willing to propose their own plan rather than just oppose what Congress is proposing," said Howard Rosen, executive director of the Trade Adjustment Assistance Coalition.

Right now, the best hopes for a deal rest in talks between Senate Finance Committee Chairman Max Baucus, a Montana Democrat, and Sen. Charles Grassley, an Iowa Republican.

Like the White House, Grassley has said he wants to ensure that only service industry workers who lose their job because of trade are eligible for government aid.

Grassley also said he believed passage of a TAA reform bill would be enough to persuade House Speaker Nancy Pelosi to schedule a vote on the Colombia free trade deal, even though she took steps last month to block action on it.

20.7 MILLION 'OFFSHOREABLE' SERVICES JOBS