Health Care Debate Prompts Standoff on Trade Legislation
Senate Democrats Back Subsidies for Displaced Workers

By Mike Allen and Juliet Eilperin
Washington Post Staff Writers
Thursday, May 2, 2002; Page A02

President Bush's yearlong push for new trade-negotiating authority has triggered a Senate game of chicken, with most Democrats insisting on adding health care provisions to the bill and conservative Republicans vowing to fight them.

The trade-negotiating authority is a rare case where Senate Majority Leader Thomas A. Daschle (D-S.D.) says he agrees with one of Bush's top domestic priorities. But Daschle says the bill will not pass without a companion measure that would federally subsidize health insurance for workers whose jobs are moved overseas.

Administration and Republican officials said they are willing to help displaced workers, but disagreed sharply with Democrats on how to do it. Negotiators remained far apart yesterday, with Republicans beginning their bargaining at a 60 percent subsidy of premiums and Democrats demanding 73 percent.

"The far right will be responsible for the fact that the trade legislation collapses in the Senate if this doesn't happen," Daschle said after meeting with Bush yesterday.

Senate Minority Leader Trent Lott (R-Miss.) said he is concerned about the cost of the health programs being proposed and objects to Daschle's plan to consider three other bills along with the trade-negotiating measure. But Lott said he hoped for a solution. "The trade bill is about our children and our grandchildren, and a growing economy," he said.

As he has on several other measures since Democrats took control of the Senate last year, Sen. John Breaux (D-La.) is serving as a bridge between his party's leaders and the White House. In an interview, Breaux said a compromise is possible and said the White House "needs to be more aggressive" in working toward one.

"The problem is that two-thirds of the Democratic caucus doesn't like the trade bill and two-thirds of the Republican caucus doesn't like the health provisions," Breaux said. "The challenge is to get a majority of both sides to accept something they don't like."

The trade package went to the floor yesterday and debate is expected to last for much of next month. The negotiating power, which was enjoyed by the previous five presidents but expired in 1994, would allow the White House to sign international trade deals that could be voted up or down by Congress, but not changed. It used to be known as "fast track" power, but supporters have begun calling it "trade promotion authority."

Business groups have worked for years to build support for the measure, while labor leaders and lawmakers from many blue-collar districts contend the measure will push jobs overseas. The bill passed the House by one vote last year in one of the hardest-fought victories of Bush's administration. A huge lobbying blitz is beginning this week, with the U.S. Chamber of Commerce, the National Association of Manufacturers and other business groups holding a "fly-in" yesterday for hundreds of members from throughout the country to come and lobby their senators.

The health care subsidies would be part of a trade-adjustment assistance program that has existed since 1962. The program, which has traditionally provided training as well as extended unemployment benefits, targets workers who lose their jobs specifically because of increased imports. Congress is considering providing coverage for employees of factories that move overseas.

Both parties now agree the government should subsidize health insurance premiums as part of the program. Democrats have proposed paying for the costs largely through employer-sponsored health-care plans, while Republicans have suggested providing an individual tax credit to help workers pay for their premiums.

Under either scenario the aid program would nearly triple in size, for a total cost of nearly $1.2 billion a year. Roughly 30,000 of 130,000 eligible workers participate in the program, according to the Senate Finance Committee, and these changes could add another 75,000 participants.

The negotiations are being led by Senate Finance Committee Chairman Max Baucus (D-Mont.) and the committee's ranking Republican, Sen. Charles E. Grassley (Iowa). Among the issues they are trying to resolve is the level of coverage for secondary workers -- those whose company supplied a firm that moved overseas. Lawmakers from agriculture-dependent states, including Grassley, argue that ranchers, farmers and fishermen should fit into this category.

Opponents of the trade bill say Democratic insistence on expanded health care benefits shouldn't surprise Republicans. "Everyone's known all along what they're going to do," said Lori Wallach, director of Public Citizen's Global Trade Watch. "That was the price of fast track, which is unpopular with the majority of Senate Democrats."

Thomas J. Donohue, president of the U.S. Chamber of Commerce, said his group might withdraw its support for the bill if Democrats attach too many provisions. "If it's loaded up and it looks like the horse and wagon are going to die, we're going to kill it," Donohue said Monday. "And the people who loaded up the wagon are going to pay the political price for it."

Donohue said his members have bluntly warned individual senators about the potential consequences of the bill's demise. "If this legislation doesn't pass this Congress, I know many, many companies that are going to move their operations offshore," he said.

Health care aside, lawmakers are also feuding over whether to alter the trade bill itself. Sen. Ernest F. Hollings (D-S.C.) has been trying to block the bill altogether, arguing it poses a threat to U.S. textile plants, many of them in his state. And Sen. John F. Kerry (D-Mass.) plans to offer an amendment that would make it more difficult for foreign investors to challenge U.S. environmental, workplace safety and zoning laws.