Congress Reaches TAA Compromise as Amendment to Economic Stimulus Bill

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February 8, 2009

The House Ways and Means Committee and Senate Finance Committee recently reached a compromise to reauthorize and expand the Trade Adjustment Assistance (TAA) program through 2010, by adding an amendment to the American Recovery and Reinvestment Act of 2009 (H.R. 1), currently being debated in the Senate.

The compromise includes:

• An extension of TAA coverage to the service sector
• An increase of training funding to $575 million
• An extension of coverage to workers whose firms shift production to countries that do no have free trade agreements with the United States
• An increase in the health care tax credit from 60 percent of insurance premiums to 80 percent
• Authorization of $230 million per fiscal year for TAA benefits for communities affected by trade
• An extension of TAA benefits to many secondary workers, including those that perform transportation, testing and airline maintenance services

In addition, this legislation will introduce a new system for industries that the United States International Trade Commission has determined to have suffered as a result of unfair imports to automatically receive TAA benefits.

The compromise does not contain:

• An industry-wide certification for TAA benefits if three firms in the same industry successfully petition for TAA benefits
• A requirement that all administration of TAA at the state level be performed exclusively by public sector employees
• An update to the Worker Adjustment and Retraining Notification Act

Previously, Senate Republicans had demanded that the TAA program be linked to voting on the controversial U.S.-Colombia Free Trade Agreement (FTA).  If this TAA reform is passed as part of the stimulus package, it will mark the first time that the program will be reformed without any link to trade liberalization.

House Democrats have made it clear that the passage of TAA reform is a necessary but not sufficient requirement for consideration of the Colombia Free Trade Agreement (FTA).   Democrats maintain that impunity in Colombia for violence against labor union leaders is still a major issue that needs to be resolved prior to a vote on this FTA.