In
their bid to sell a skeptical Democratic Party on a free trade agenda,
the Obama Administration has insisted that no U.S. laws would change as a
result. “Our trade agreements would not weaken our ability to implement
the law now or in the future,” Treasury Department spokeswoman Whitney
Smith
told Bloomberg. Top White House officials
contended to Politico that the “fast-track” trade bill “expressly forbids changing U.S. law.” As I said
last week,
this is only partially true, at best. In fact, the companion bill to
fast track itself does include a change to U.S. law, paying for
assistance for workers who lose their jobs from trade deals — by cutting
medical assistance to the elderly.
The
Senate will consider two companion trade bills this week. There’s the
fast-track bill, which would allow any president over the next six years
to negotiate trade agreements and get an expedited Congressional vote,
without amendments or filibusters. And there’s also
trade adjustment assistance
(TAA), a bill that provides federal funds for workers displaced by free
trade agreements. Workers receive job training and placement services,
relocation expenses, income support, and help with health insurance
premiums.
There’s
substantial disagreement on whether TAA actually helps workers get new jobs, but Democrats
strongly support the program. Even pro-trade Democrats made
renewing TAA a condition of passing fast track, and the two bills will
move together
in the Senate this week. But even though supporters constantly talk up
the economic benefits of trade, they nevertheless offset the $2.9
billion in TAA funding by cutting other spending. Supposedly, trade
increases jobs and therefore federal revenue, leaving enough money
available to pay for TAA. But in Congress’ eyes, some other priority has
to pony up that cash nonetheless.
That priority happens to be Medicare. TAA is
partially financed through $700 million in Medicare cuts. Sequestration
expires in fiscal year 2024, but the TAA bill expands it by piling those
cuts onto the back end. Most of the other $2.2 billion gets financed
through customs user fees.
Let’s keep some perspective: these cuts are very small. Medicare
spent $492 billion
in fiscal year 2013, so you’re talking about a bit more than
1/1000th of the cost. But it’s true that this continues a very dangerous
precedent: When anyone in Congress wants to pay for something, they
just push sequestration out a bit more or expand it a hair, chipping
away at social services and essentially robbing Peter to pay Paul. This
has happened twice before;
once to pay for the Ryan-Murray budget, and
once
to pay for reversing pension cuts for veterans. Sequestration was only
supposed to last until 2021; after TAA, the date would be pushed out to
2024 and counting.
As National Committee to Preserve Social Security and Medicare President and CEO Max Richtman
told the National Journal,
“Apparently using Medicare as a piggy bank to pay for everything under
the sun has become the new legislative norm for Congress.” The signature
single-payer health care program for seniors has become a Congressional
slush fund.
The other problem here is that it fundamentally
breaks that promise — already, before any vote on the Trans-Pacific
Partnership or any other fast-tracked agreement — that no laws will
change in this new era of corporate-friendly “free trade.” This
continues a troubling trend, identified by
Paul Krugman,
about not being able to trust the White House’s categorical denials
about the consequences of their trade agenda. They said the
investor-state dispute settlement process couldn’t weaken regulatory
priorities; that’s
not true. They said Dodd-Frank would be protected in any trade deals; that’s
not true either.
To quote Krugman, “The Administration is in effect saying trust us,
then repeatedly bobbling questions about the deal in a way that
undermines that very trust.” The Medicare cuts represent another drop in
that bucket.
These cuts have been part of the TAA bill for a
while: The American Hospital Association and American Medical
Association formally opposed the bill on those grounds
back in April.
But progressive groups have added to that alarm in recent days.
Democracy for America called it a “brand new attack on Medicare,” and
urged supporters to contact Senators to stop it.
Every
hit on the credibility of the free trade agenda makes it less likely
that the bill will pass the House. Republicans claim they are
gaining momentum in picking up votes, but all public whip counts show the tally
coming up short.
Adding Medicare cuts into the mix makes voting for fast track an even
heavier lift for the House Democrats likely needed to get the bill the
required votes. Republicans have repeatedly
torched Democrats for Medicare cuts in campaign ads. They cannot relish giving another opening for that attack.
The
situation really shows that trade supporters don’t have any belief that
their system will work for everyday Americans. If free trade is such an
economic benefit for the United States, then re-allocating some of that
benefit so workers on the wrong side can recoup a sliver of their
losses still allows everyone to come out ahead. But they feel compelled
to pay for that assistance, perhaps because they aren’t confident that
the benefits of trade will ever get past corporate executives and into
the hands of American workers or consumers. If pro-free traders can’t be
trusted on this point – the entire rationale for enacting their program
– what can they be trusted on?
David Dayen is a contributing writer for Salon. Follow him on Twitter at
