House Passes Overhaul of Trade Adjustment Assistance

The House has just passed the Trade and Globalization Assistance Act, H.R. 3920 by a vote of 264-157. The bill would overhaul the Trade Adjustment Assistance (TAA) program — expanding opportunities for job training to transition workers into 21st Century jobs to take advantage of increasing globalization. The White House has issued a veto threat on the bill.

The bill extends TAA job training and health benefits to service workers who lose their jobs due to global trade and covers more manufacturing workers. It dramatically improves TAA health care benefits and strengthens job training benefits so that workers have a real opportunity to strengthen their skills for good-paying jobs. The bill explicitly prohibits undocumented workers from receiving any TAA benefits or services.

It also creates new benefits and tax incentives for industries and communities that have experienced manufacturing job losses, promotes long-needed reforms in unemployment benefits, and strengthens notification of workers laid off in plant closing or in mass layoffs. As our nation moves forward with expanded trade, this is a first step to ensure that it won't be at the expense of American workers.

Speaker Nancy Pelosi: “For a long time, unfortunately Mr. Speaker, trade policy has focused more on opening new markets and has dismissed the real consequences faced by those who lose their jobs, as well as their communities across the America that are hard hit. Democrats recognize that our economic future rests with our ability to open new markets for US goods, especially since our markets already are largely open to our trading partners. However, the status quo is not working and we must do much more to help American workers to compete and thrive in the increasingly competitive global market. That is the purpose of this important legislation before us, the Trade Adjustment Assistance bill.”
Rep. George Miller: “We could leave this to the marketplace, and you could just throw your workers out on the street with no notice, no health care, no training, and that’s it. And just tell them, ‘welcome to the globalized world.’ We thought we’d try a different tack. We thought we would give workers notice where it’s practical for an employer to do so the worker would have time to deal with the implications of a lost job on their family, to try to save their home, to try to save their kid’s education, try to save the automobile, figure out how to get another job or how to get to retirement.”
Rep. Rob Andrews: “So, Mr. Speaker, you’re six months away from your 58th birthday. And the place where you have worked for 25 years closes. And you have no health insurance. So you dip into your savings and you figure out a way to keep yourself in the plan that you were in by paying for it largely with your own money. Under the present law when you hit your 59th birthday if you don’t have another job with health insurance, you’re out. And you’ve got six years to go until you qualify for Medicare. We are changing that in this bill.”
Rep. John Lewis: “In my home state of Georgia, we have used more than 125% of our allotment. Why? Because agriculture and textile jobs are disappearing. They are leaving the state of Georgia. These families are struggling just to make ends meet. They want to work. They need to work. How can we oppose, how can we be against investing in our greatest access, the American work force. We can spend hundreds, thousands, millions, and billions of dollars on war. Can we spend just a few dollars on the workers of America? To oppose this bill is pointless. It makes no sense, and it is irresponsible.”
Rep. Bill Pascrell: “Mr. Speaker, to the gentleman from Texas, he obviously didn’t read the bill. I recommend that you read the bills before you get up on the floor and make a fool of yourself. It says right here, section 114, ‘no benefit allowances, training or other employment services maybe provided under this chapter to a worker who is an alien unless the alien is an individual lawfully admitted for permanent residence to the United States, is lawfully present in the United States or is permanently residing under color of the law.’ You stoop to conquer, you should be ashamed of yourselves. Every time you get in the corner, you got to bring up illegal aliens. It says it in the law and by the way, any law that I know of dealing with people who are out of work deals only with those people who are here legally. Get it? It’s easy. It’s simple.”

Highlights of the bill:

Extend Trade Adjustment Assistance to service workers. The bill specifies that workers who produce services (such as engineers and call center workers), who are laid off due to trade, are also eligible for Trade Adjustment Assistance. Some have forecast that 3.3 million service jobs could go overseas by 2015. Current law extends coverage only to workers in the manufacturing and agricultural sectors.

Expand Trade Adjustment Assistance to more manufacturing workers. The bill closes loopholes in current law to ensure that all workers who lose their job because their factory moves offshore get TAA benefits. The bill also provides for automatic group certification for workers from industries injured by trade, as determined by the International Trade Commission, and for industry-wide certification when several firms in the same industry are certified within a 6-month period.

Double job training funding & expand job training support. The bill authorizes up to $440 million for FY 08, and increases it to $660 million by 2010. This will address training funding shortfalls faced by some States, cover increases in the number of eligible workers (because of expansion to service workers and more manufacturing workers), and provide workers in longer term job training (including college) with an additional 26 weeks of income support. The bill explicitly prohibits undocumented workers from receiving any TAA benefits or services.

Improve health care tax credit. The Health Care Tax Credit (HCTC) program offers health insurance assistance to TAA-eligible workers who have lost their employer-sponsored coverage, but as few as 10 percent of eligible workers take advantage of the credit because of its cost. This legislation increases the tax credit to cover 85 percent of the out-of-pocket cost for private health insurance up from 65 percent; removes administrative barriers to obtaining coverage; improves coverage of spouses and dependents; and improves insurance options in markets that lack affordable choices.

Incentives to redevelop communities hit by loss of manufacturing jobs. The proposal authorizes the designation of manufacturing redevelopment zones, and provides the work opportunity tax credit for employers hiring individuals from that area. The communities would be eligible for more than $5 billion in tax exempt bond financing for new business; $3.6 billion in tax credit bond financing for the cost of redevelopment; and more low-income housing credits.

Reform Unemployment Insurance. The bill rewards States for taking steps to improve unemployment insurance coverage for low-wage, part-time and other workers. Unemployed low-wage workers are only one-third as likely to receive unemployment benefits, but more than twice as likely to be unemployed as higher wage workers. The bill provides financial incentives for States that: count workers' most recent wages when determining UI eligibility; end discrimination against part-time workers; allow separations from work for compelling family reasons (such as fleeing domestic violence); and provide extended benefits during approved training for high demand employment.

Fully paid for — by delaying tax break for foreign interest payments and extending unemployment tax. The bill delays a tax break that was enacted in 2004 but has not gone into effect, for three years (beginning in 2012), that permits companies to reduce their U.S. taxes by allocating their worldwide interest between their U.S. and foreign source income in order to gain a higher foreign tax credit limitation. Not one company currently utilizes this provision. In addition, the bill extends the current-law unemployment tax (the FUTA surtax) on employers, which President Bush has also proposed extending.

Strengthen Notices to Workers Affected by Plant Closures or Mass Layoffs. To minimize the devastating impact of plant closures and mass layoffs on workers, their families and their communities, the bill ensures that workers who are about to lose their jobs are given enough notice and information — increasing, to 90 days from 60, the amount of advance notice. Nearly two-thirds of mass layoffs and plants closures in 2001 did not come with the required 60-day notice. [2003 GAO report] The bill would also require employers to inform workers of benefits and services such as unemployment compensation and job training and beef up penalties for failing to provide plant closing notices.

Extend Health Care (COBRA) for Workers Affected by Plant Closures. The bill would extend the time period that workers can continue their health coverage at their own expense with their former employer at cheaper group rates, also known as COBRA. Workers over age 55 who lose their jobs because of trade and who worked with the same employer for over ten years could pay for COBRA health coverage until they become Medicare eligible at age 65 or obtain health care through a subsequent employer. The bill provides all TAA eligible workers with up to 30 months of COBRA, up from 19 months in current law.