Tag Archive: Trade Promotion Authority

May 19 2015

The TPP Deal That Will Cut Medicare

Last week many received an e-mail from Democracy for America claiming the Trans-Pacific Partnership (TPP) would cut Medicare for senior citizens by $700 million:

There’s a big — brand new — attack on Medicare that’s just been added in the Senate to the Fast Track bill for the TPP. The bill would cut a whopping $700 million from Medicare, hurting seniors who need access to health care.

That’s right, Republicans insisted on cutting Medicare spending to pay for a Trade Adjustment Assistance program that Democrats got added to the bill in order to support workers who lost their jobs due to trade deals like the TPP.

A few bloggers were a little confused by this claim and dug a little deeper.

Lambert Strether, at naked capitalism, had a few good questions:

1) Has Trade Adjustment Assistance been added to the TPP Fast Track bill?

2) Has $700 million been cut from Medicare as a result?

3) Does Trade Adjustment Assistance serve any public purpose?

The answer to question #1 is No.

The Trade Adjustment Assistance Act (TAA) and the Trade Promotion Authority (“Fast Track”) are separate pieces of legislation, so when DFA says that TAA has “just been added in the Senate to the Fast Track bill for the TPP,” that’s not correct. Still, that doesn’t mean that a deal wasn’t cut, and that seems to be just what’s happened. [..]

And the bills indeed moved in tandem; the Senate voted for closure of both Fast Track and TAA last Thursday, May 14.

The answer to #2 is Yes. The cut is in the TAA. It was added by Republicans who insisted that the cost of bill be offset:

   The Trade Adjustment Assistance Act, sponsored by Rep. David Reichert (R-Wash.), would rely on $700 million in reduced Medicare spending in 2024 to pay for [sic] healthcare coverage and other benefits for workers who lose coverage because of any agreements negotiated under fast-track trade authority sought by President Barack Obama.

   The $700 million in savings would be achieved by increasing Medicare cuts that were part of the sequester by 0.25% in 2024.

Lambert points out the more colorful language from the National Journal

Apparently using Medicare as a piggy bank to pay for [sic] everything under the sun has become the new legislative norm for Congress,” Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, said in a statement to National Journal. “Rather than balancing priorities or considering a penny of new revenue, congressional leaders are proposing to once again funnel Medicare resources into unrelated programs and fixes-this time it’s the trade adjustment assistance program.

The answer to #3 is probably not. Lambert thoroughly researched the 40 year old current TAA at Senator Sherrod Brown’s site and got pretty ticked off:

Brown lists a ton of reasonable seeming tweaks and enhancements. Reading through the list, though, I’ve got to say I’m both ticked off and skeptical:

Ticked off, because how come the millions who got kicked out of the labor force when the powers-that-be decided to downsize it aren’t eligible for the same treatment? For example, it sounds like the Health Care Tax Credit workers screwed over by trade deals get is a better deal (at least in terms of dollars, even though it’s a tax credit) than COBRA, which is what workers screwed over by recessions and depressions get. What a horrible patchwork.

And skeptical, because in today’s post-crash and crapified labor market, is training really the answer?[4] Especially for over-50s?

So I’m not convinced that TPP + TAA nets out positive for workers, or even makes them whole. [..]

Bottom line is that TAA is a bandaid on a cancer, and the Democrats – assuming good faith, which I think with Sherrod Brown it’s fair to do – traded away something for nothing, as so often. If corporations can go to a rigged court and sue for lost profits, how come workers can’t go to a rigged court and sue for lost wages?

Over at Salon, lapsed blogger David Dayen had this to say about the TAA and the Democrats sell out of seniors:

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. [..]

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. [..]

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.

These are all bad bills that in the long run will hurt the vast majority of workers. So fight back by arming yourself with the facts then contact your congressional representatives via letters, e-mail and phone calls. Get together with a few people, make an appointment and visit their offices to express your concerns. Delegations get attention. Write letters to the editors of newspapers. And don’t let up, be persistant and polite.

The lies about TPP need to be exposed and this agreement needs to be stopped.