Weekend Economists Watch the Stars Falling June 12-14, 2015

[Demeter]

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Business Leaders React With Dismay to Defeat of Trade Bill

http://www.nytimes.com/2015/06/13/business/business-leaders-react-with-dismay-to-defeat-of-trade-bill.html

As big a setback as Friday’s vote on Capitol Hill was for President Obama’s efforts to advance his trade agenda, it was an even bigger rebuff for the leaders of American business.

While there are deep divisions over trade policy among Democrats, and to some extent among Republicans as well, corporate America has been nearly unified in its support of a deal that would lower various barriers to trade and investment between the United States and 11 other Pacific Rim nations.

Though many sought to put the best face on the vote, business groups and chief executives were quick to voice their displeasure with the House’s rejection of aid to workers harmed by imports, which could doom prospects for eventual approval of a wider trade pact...

THIS IS DISINGENUOUS, AT BEST, NAIVE AT WORST....US BUSINESS IS GOING TO COLLAPSE UNDER THE TOILET PAPER....

A Big Win for Big Labor: Unions successfully pressured House Democrats to vote against a bill they liked, in order to block a trade bill they hated.

THE TAA WAS A MIRAGE....THERE WAS NOTHING SUBSTANTIVE TO LIKE THERE

http://www.theatlantic.com/politics/archive/2015/06/a-big-win-for-big-labor/395699/

House Democrats may have cast the fatal votes that killed President Obama’s trade agenda on Friday morning, but the party responsible for its demise was a coalition whose numbers have diminished for decades and whose political clout has been questioned: the American labor movement.

The Obama administration believed it had the votes necessary to pass the most-contentious piece of its trade legislation—Trade Promotion Authority—that would allow the president to finalize agreements with Pacific Rim nations and the European Union. But the labor movement was not prepared to give up. Instead, it caught the administration off guard by launching a surprise attack on legislation known as Trade Adjustment Assistance, a program designed to help workers displaced by trade and one which Democrats—and organized labor—have overwhelmingly supported in the past. Just 40 House Democrats—less than one-quarter of the caucus—voted for the bill, which fell in a landslide, 302-126. By defeating the aid measure, the labor movement rendered the administration’s careful work rounding up votes for Trade Promotion Authority largely irrelevant.

As the margin of the defeat became clear, some Democrats scrambled to change their votes to 'No,' a measure of just how unpopular the measure had become. Republicans moved quickly to hold a vote on Trade Promotion Authority, but even though the bill received a majority of votes, it will not go to the president's desk because it does not match the Senate-passed package. GOP leaders could try to bring the assistance bill back for another vote next week, and the White House tried to downplay Friday’s loss as a momentary stumble. Press Secretary Josh Earnest referred to it as a “procedural snafu”—the same phrase he used to describe the trade package’s initial failure in the Senate earlier this spring. “It’s deja vu all over again,” Earnest said. Yet while the Senate had first fallen short by only a few votes, Obama would have to flip dozens of House Democrats to get it passed.

Trade Promotion Authority and Trade Adjustment Assistance—TPA and TAA in Beltway acronym-speak—have always been a package deal in Congress. Republicans support TPA because it leads to new trade agreements, while Democrats accept TAA as a consolation prize, because it mitigates the effect of outsourcing. (Although there are questions about how effective that assistance really is.) Yet once it became clear that Obama had secured enough Democratic votes to join most Republicans in passing TPA, the AFL-CIO took the astonishing step of announcing it would urge its progressive allies to oppose TAA as well. Because Republicans typically oppose the assistance piece of the trade package, the loss of Democratic support doomed the bill, and with it, the entire trade measure.

Democrats revolted even after their leader, Nancy Pelosi, negotiated a last-minute change to the proposals removing cuts to Medicare that would have paid for the assistance portion. And they rejected the most aggressive personal lobbying campaign that Obama has undertaken since the passage of his healthcare law five years ago. The White House has been wooing Democrats for weeks, even dangling the trappings of the presidency—Oval Office visits, rides on Air Force One, phone calls galore—in a way that’s been rare for Obama. (The D.C. pundit class has long urged him to engage in this sort of maneuvering to advance his legislative agenda; it doesn’t seem to have made much difference.) On Thursday evening, Obama made a surprise visit to the Congressional Baseball Game, where he smiled for pictures with lawmakers and reportedly button-holed Pelosi for 15 minutes on the trade bill. By Friday morning, he was back on Capitol Hill for a last-minute meeting with House Democrats just hours before the vote...MORE

The final indignity for Obama came in the minutes before the vote, when Pelosi—his erstwhile ally for six-and-and-half years—deserted him as well.

PROVING THAT WOMEN ARE MUCH BETTER AT NUMBERS AND REALITY THAN MEN GIVE US CREDIT FOR--NANCY READ THE WRITING ON THE WALL.

How Pelosi broke with Obama

http://www.politico.com/story/2015/06/how-pelosi-broke-with-obama-118961.html

It had come to this: Nancy Pelosi needed John Boehner to help save her party and her president from an ugly public meltdown.

By Friday morning, it was clear that a crucial piece of Barack Obama’s trade initiative was barreling toward defeat. Democrats were disjointed, dispirited, even angry in some cases. At the same time, they knew that they – not Republicans – would shoulder much of the blame for killing the president’s top legislative priority and for the ensuing spectacle of a party at war.

So just before noon, with debate already underway on the House floor, Pelosi picked up the phone and called Boehner to inform him that a must-pass component of the White House trade package was going to fail. It was the second such warning from Pelosi to Boehner in two days.

“Are you still going ahead?” Pelosi asked him, according to sources familiar with the call. “Are you going to pull the bill?”

No, he wasn’t, Boehner replied. This was his best chance to push fast-track trade authority across his unpredictable House floor, he told Pelosi.

Hours later, the House resoundingly defeated Trade Adjustment Assistance, a federal aid program to help workers who lose their jobs to free trade. The vote effectively scuttled Obama’s bid for fast-track trade authority – though Republicans may try to revive it in the coming days or weeks – because it was conditioned on approval of the jobs bill.

Pelosi was a minor player for much of Obama’s push to secure authority to clinch the Trans-Pacific Partnership, a 12-nation pact that would be the largest free-trade deal in history. But as the vote neared, and major Democratic opposition bubbled to the surface, she was in a wrenching position: naturally inclined to deliver for a president she’s worked hand-in-glove with for years, but all-too-aware of the strong progressive winds within her caucus against a deal Democrats believe would jilt American workers.

Up until moments before Friday’s vote, Pelosi hadn’t told a soul how she was going to vote on TAA or Trade Promotion Authority, the fast-track trade law Obama was seeking....

Read more: http://www.politico.com/story/2015/06/how-pelosi-broke-with-obama-118961.html#ixzz3d2UuOTyB

Washington Dysfunction, With a Twist: Democrats Desert Their President

HE'S A LAME DUCK, THEY HAVE TO RUN IN NOVEMBER 2016, HE HAS NO COATTAILS AND THE PARTY IS DYING...THIS MARRIAGE IS OVER! BESIDES, OBAMA DESERTED THEM (AND US), FIRST.

http://www.nytimes.com/2015/06/13/us/politics/democrats-revolt-on-trade-bill-obama.html?_r=0

He made it personal. He appealed to their loyalty. He asked them to give him what every modern president has had. He argued the facts, disputed the politics, quarreled over the history and at times lashed out at those who still refused to stand with him.

Yet in the end, after years of frustration with Republicans blocking his ideas in Congress, President Obama on Friday found the most sweeping legislative initiative left on his agenda thwarted not by the opposition but by his own party. If not for his fellow Democrats, Mr. Obama would have a landmark trade bill heading to his desk for signature.

The sting of defeat may be temporary. The White House adamantly insisted on Friday that it made important progress by passing part of the trade package and still has a chance to turn around the vote on the other part. If that proves true, Mr. Obama may yet secure the negotiating authority he needs to seal a legacy-building 12-nation Pacific trade agreement and the day’s setback may ultimately be overshadowed...

PLEASE GOD, BLOCK THAT BILL!

“We’ve got a very strong case to make to Democrats about how middle-class families all across the country would benefit significantly from the proposed expansion of trade adjustment assistance, and we’re going to make the case that they should support it,” said Josh Earnest, the White House press secretary.

THEY ARE SERVING KOOL-AID IN THE OVAL OFFICE...NO WONDER NOTHING PASSES!

House Democrats Defeat TPP "For Now"

http://firedoglake.com/2015/06/12/house-democrats-defeat-tpp-for-now/

As FDL Alum, David Dayen wrote at Salon…

The Democrats’ TPP rebellion just drew blood: Everything you need to know about today’s shocking vote

Today’s rebuke for the Obama Administration and his friends on the Republican side of the aisle on their trade agenda restores democratic accountability to the process of governing. What Obama was proposing was a trick, one used repeatedly to advance distasteful policies, by getting each side to vote only on the parts they like. And House progressives responded by saying they wouldn’t play that game anymore. If they can withstand the pressure, not only will trade be derailed, but the era of the split-vote gambit, where opponents help the victors, will be over.

Progressive Democrats took their stand on trade adjustment assistance (TAA), a separate bill to “fast track” trade authority for the President, which the Senate linked together, so that they had to pass concurrently. TAA offers modest job training, income support and health insurance assistance to workers who lose their jobs from trade deals. It’s not very effective, but it sounds good; Democrats who oppose trade deals can say that they at least got some help for workers.

TAA and fast track have passed together ever since the Trade Act of 1974. This is a Washington game where Democrats get to vote for TAA so Republicans don’t have to. Republicans don’t favor TAA because they see it as welfare.

That set up liberal Democrats as the deciding factor on whether Obama would get his fast-track trade authority. The President went to Capitol Hill to tell Democrats to “play it straight” on the vote. But voting for TAA as a sweetener for a policy most Democrats don’t support is the opposite of playing it straight. It’s a stupid game, and progressives finally decided not to play… {more}

From The Nation’s George Zornick…

…Here’s what happened: The House considered three bills Friday. One was a generally noncontroversial customs enforcement bill. Another was the actual fast-track trade-authority legislation. (You can read the case against that bill here.) And the third was a bill providing trade-adjustment assistance to workers who get screwed over by trade deals. Republicans have long detested trade-adjustment assistance as a wasteful big-government program, and Democrats were not happy with the way it was being paid for.

The way House Speaker John Boehner structured the process along with the Senate, all three bills had to pass or else the entire package would not advance. (If you’re a gambler, think of it like a three-item parlay bet.)

Progressive Democrats who oppose fast track feared it would pass with mainly Republican votes alongside a small number of Democrats, but they sensed an opportunity on the must-pass trade-assistance bill—since relatively few Republicans would back the legislation, it would be much easier to kill by withholding Democratic votes. And if trade assistance goes down, so too would fast track.

And that’s exactly what happened. Minority leader Nancy Pelosi took the floor early Friday afternoon and said that explicitly defeating trade assistance “is the only way we will be able to slow down fast track.” When the votes rolled in shortly thereafter, the trade-assistance bill failed with 302 votes against it and only 126 in favor.

It’s worth stressing here how much progressive organizing had to do with this defeat. President Obama personally appeared in Congress at the last minute Friday morning to appeal to Democrats one more time, on the heels of crashing the congressional baseball game the night before. But Pelosi and Democrats remained unswayed, and in her speech, Pelosi instead credited the work of activists holding members to a “hot stove” back home.

But fast track isn’t quite dead yet. Boehner moved on to the fast-track and customs bills anyway, both of which “passed,” though fast track only got two votes more than it needed. The package still won’t advance without trade-adjustment assistance—but Boehner scheduled a revote for Tuesday. {more}

Meanwhile, outside the Capital…