White House threatens veto of trade job-loss bill

By Doug Palmer

WASHINGTON (Reuters) - The White House threatened on Tuesday to veto a bill to expand federal assistance for retraining workers who have lost their jobs because of trade, but said it wanted to work with Congress to revamp the program.

The veto threat prompted a Democratic warning that the Bush administration's hopes of winning Congress's approval of trade agreements with Peru, Panama, Colombia and South Korea were at risk.

The bill, headed to a vote this week in the House of Representatives, fails to make needed reforms and instead converts the federal trade adjustment assistance program "from a trade-related program to a universal income-support and training program," the White House budget office said in a statement.

"Accordingly, if this bill were presented to the president in its current form, the president's senior advisors would recommend he veto the bill," it said.

The veto threat underlined sharp differences between the White House and Democrats in Congress that could reduce support for a free-trade pact with Peru the administration has wanted Congress to approve for nearly two years.

"When it comes to trade, the time has come to deal fairly and squarely with American workers -- our Middle Class," Rep. Jim McDermott, a Washington Democrat and senior member of the House Ways and Means Committee, said in a statement.

"That's what our TAA (Trade Adjustment Assistance) bill does, but the president simply does not get it. The president wants to stiff the American worker and he will sacrifice his trade agenda if he does," McDermott said.

The Ways and Means Committee is scheduled to vote on the Peru agreement on Wednesday.