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

[Demeter]

72. House Rejects Obama's Corporate-Friendly Trade Deal In Stunning Defeat

http://www.alternet.org/news-amp-politics/house-rejects-obamas-corporate-friendly-trade-deal-stunning-defeat?akid=13210.227380.yLknXU&rd=1&src=newsletter1037764&t=8

WE WILL FIND OUT NEXT WEEK IF IT WAS "STUNNING" ENOUGH

The U.S. House of Representatives rejected the Trade Adjustment Assistance provision of the TPP this afternoon - the first in a series of trade bills - designed to lessen the blow of any potential (and very likely) negative effects resulting from the broader Trans-Pacific Trade deal. The reaction in Washington appears to be genuine surprise, mostly at the number of Democrats who broke ranks and voted against party leadership, including President Obama who had been lobbying fellow Democrats for support for weeks. As The Atlantic’s Russell Berman would explain:

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.

This is an important point: Trade Adjustment Assistance was seen as a Trojan horse by TPP opponents- providing populist cover for Congress while ultimately serving the pro-corporate ends of the larger trade deal. The White House and GOP allies like Speaker Boehner thought they had found a workaround in the TAA, a compromise to alleviate worries about job displacement while sewing a traditional union compromise in the fabric of the TPP. It appears, however, for now these efforts were for naught.

In order to salvage some kind of victory, GOP House majority leader, Kevin McCarthy, followed the TAA defeat with a vote on Fast Track, or Trade Promotion Authority, which narrowly passed 219 to 211 thanks to overwhelming Republican support. But this vote is ultimately symbolic due to the fact that the Senate and House bills have to be reconciled. After the defeat of the TAA, this is far from certain...MORE