President Obama, in his January 25, 2011, State of the Union address:
[L]ast month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor, Democrats and Republicans -- and I ask this Congress to pass it as soon as possible.Gene Sperling, Director of President Obama's National Economic Council, on a May 16, 2011, press call:
The administration will not submit implementing legislation on the three pending free-trade agreements until we have a deal with Congress on the renewal of a robust, expanded TAA [Trade Adjustment Assistance, a worker-aid program].As the Wall Street Journal observed:
Translation: Hand over more than $2 billion a year to its union allies or the White House will block trade deals that would create hundreds of thousands of new jobs. Those familiar with the tactics of this White House won't be surprised to learn that beneficiaries of the program that Mr. Obama wants to resurrect include union workers whose job losses had nothing to do with foreign competition. . .Like the Boeing complaint, it's another Obama Administration play for union votes--sticking us with the check. And with a new definition of "as soon as possible."
Congress killed the 2009 program in February and TAA has reverted to the benefits from 2002, saving $800 million. This is not exactly hardship--for example, health-care benefits are still subsidized at 65%. But Mr. Obama has nonetheless decided to link ratification of the three trade deals to restoring the 2009 "stimulus" TAA.
The big business lobbies, which won't foot this bill, are pushing Republicans to agree to Mr. Obama's demands. But TAA ought to be debated on its own merits. Even the scaled-down version costs more than $1 billion annually--not counting the health-care subsidy--and only about 1% of the unemployed can blame foreign trade for their job losses. At least three economic studies have found that beneficiaries of TAA subsidies don't tend to secure better-paying jobs after retraining. A 2006 Government Accountability Office study concluded the same. . .
Republicans--and business--should tell Mr. Obama that Democrats no longer run the House, and that if he wants to hold jobs and taxpayers hostage to union payoffs, he'll be responsible for the failure.
President Obama is sacrificing economic growth and job creation in order to placate organized labor. And as the crisis of the welfare state deepens, he is trying to enlarge the entitlement system and exacerbate the entitlement mentality.