Senate Democrats dealt a stinging blow to President Barack Obama Tuesday by stalling legislation that would grant him authority to fast-track international trade deals.
Democrats, including several who favor Obama's trade agenda, banded together to prevent the Senate from considering legislation that grants the president so-called Trade Promotion Authority, which would bar Congress from amending or filibustering any trade agreements negotiated by the administration. Fifty-two senators voted to start debate on the bill, short of the 60 needed to overcome a Democratic filibuster. Forty-five senators voted against the plan.
The fast-track authority is seen as essential to passing the mammoth Trans-Pacific Partnership, a secretive trade deal with 11 other Asian-Pacific countries, and the equally large Transatlantic Trade and Investment Partnership with Europe. Obama's failure to obtain fast-track authority at the hands of a filibuster led by members of his own party follows a bitter public feud between Obama and Sen. Elizabeth Warren (D-Mass.) over his trade agenda. Republican leaders in the House and Senate support both TPA and TPP.
Senate Majority Leader Mitch McConnell (R-Ky.) urged Democrats to vote to begin debate on the controversial trade legislation, indicating he'd be open to allowing separate votes on three other trade bills that Democrats do want to see passed.
"I'm confident that an enduring agreement can be found if the Senate is allowed to work its will and debate openly," McConnell said, adding that he aims to marry TPA to Trade Adjustment Assistance – a program that provides job training and financial aid to workers who lose their jobs from international trade. "We can't debate any of the provisions senators want to consider if they vote to filibuster even getting on this bill. So I'm calling on colleagues to prove they're serious about wanting to pass legislation, rather than simply looking for new and creative ways to defeat legislation."
But Democrats, including those in favor of granting Obama fast-track authority, joined together in the final hours Tuesday with the expectation that they could cut a better deal before the debate starts. "We're telling everyone, 'Don't be a cheap date,'" said one Democratic aide who spoke anonymously to discuss strategy.
Sen. Dianne Feinstein (D-Calif.) said she plans to support TPP, citing its potential to boost exports, but said she would vote against fast-track authority.
"All they have to do is put the enforcement part into this. And there's a good reason that you want this enforced. You don't want child labor. You don't want people working 24 hours a day. I mean, this has to be part of the agreement. So to leave it out is a concern to us," she said.
Sen. Ron Wyden (D-Ore.), who co-sponsored the package of bills with Sen. Orrin Hatch (R-Utah) and Rep. Paul Ryan (R-Wis.), indicated early Tuesday he wanted more than TPA and TAA to be considered.
With nearly an hour before the vote, Wyden and a substantial faction of pro-trade Democrats walked out of a meeting and said they'd vote against bringing the bill to the floor for debate, making it clear that McConnell would not have the votes necessary.
"Our special concern this afternoon is about a lack of commitment on trade enforcement," Wyden said. Wyden accused Republicans of "legislative malpractice" for separating three bills with strong Democratic support from the TPA legislation, including a trade enforcement bill.
"The deal doesn't have to be a fight,” said Senate Minority Leader Harry Reid (D-Nev.) “There's a simple path forward: just put all four bills together and bring them to the floor."
Earlier Tuesday, the White House downplayed the significance of the vote.
"It is not unprecedented, to say the least, for the United States Senate to encounter procedural snafus," White House press secretary Josh Earnest said in his daily briefing. “We're pleased to see Democrats and Republicans both indicating a willingness to work through these procedural challenges."
Earnest wouldn't say if the White House supports Democrats' push to bundle the four bills.
The deal is not necessarily dead. McConnell has the authority to bring the legislation back, but it now faces an uphill battle in the Senate and an even tougher fight in the House, where a substantial bloc of Republicans and Democrats don't back the measure.
The TPA bill had been stalled in the Senate Finance Committee for months before Obama and Hatch cut a deal with Wyden that offered a handful of concessions in exchange for Democratic votes. Those concessions, however, were not attached to the TPA bill itself, but packaged into the other three pieces of legislation that cleared the committee during the same hearing in late April. Moving all four as separate bills would give Obama and Republican leaders opportunities to torpedo those provisions without taking down the TPA bill.
By declining to do the trade agreements together, McConnell lost the support of Democrats who otherwise supported TPA. McConnell wants the trade deal to pass, but in the short term at least may have preferred a round of headlines focused on Democratic in-fighting. "Maybe he wanted to kill it," said Sen. Pat Leahy (D-Vt.).
Hatch acknowledged on the Senate floor that the bill that carries many of the concessions had been decoupled from TPA vote to prevent the currency manipulation provision authored by Sens. Chuck Schumer (D-N.Y.) and Sherrod Brown (D-Ohio) from being included in the package.
"Everybody knew that putting the Schumer amendment on the one bill would not be acceptable in the House and would not be acceptable to the president," Hatch said.
Many Republicans remain ideologically opposed to TAA, making it an obvious target should it receive a standalone vote. Other Democratic priorities were attached to a trade enforcement bill that many believed was destined to be dismembered. Two of those concessions remain controversial: One, a ban on imports of goods manufactured with child labor, is opposed by many Republicans; the other, which would require the Commerce Department to take action on currency manipulation, is opposed by Obama. Democrats also want to see the African Growth and Opportunity Act included in the TPA vote.
The Democratic blockade of the measure intensifies a long-simmering conflict with the president, who has made securing trade deals a key element of his legacy and his final two years in office.
The president and backers of the effort say it will open more markets for U.S. goods, level the playing field for American manufacturers, and serve as a check on China's global advance. And they argue the Obama administration has figured out how to solve the problems of the much-maligned North American Free Trade Agreement.
"Most people don't realize that we actually fixed a lot of what was wrong with NAFTA in the course of this," said Sen. Tom Carper (Del.), one of the few Democrats to stick with Obama on the vote. "We need to be negotiating in the present, in the present tense, and not the past."
But many Democrats and some Republicans fear the TPP in particular will facilitate currency manipulation by foreign competitors, erode labor and environmental standards at home and abroad, and shrink domestic jobs for the middle-class. The Obama administration treats the TPP negotiating texts as classified information, making it a crime for his trade critics to detail their concerns in public.
While Carper and Obama emphasize that TPP will include enforceable labor and environmental protections, both labor unions and environmental groups remain steadfastly opposed to the deal, citing lax enforcement of such trade safeguards under Obama's tenure.
Obama's feud with Warren has centered around the TPP's enforcement mechanism, known as Investor-State Dispute Settlement. The process allows foreign corporations to sue a country over laws or regulations that they believe unfairly threaten their investments. The cases are heard before an international tribunal with the power to levy financial penalties against nations. While Obama has insisted that the process will not jeopardize U.S. standards, Warren and others worry it will curb future rulemaking, and indeed concerns that new rules would violate past trade agreements have become part of congressional debate in recent years.
The Obama administration has been in open war with Warren over this issue, with the president calling some of her concerns "pure speculation," "bunk" and "dishonest." Warren told The Washington Post on Monday she has yet to see a draft "that would do what the president says he has already accomplished."
Currency manipulation has been another major sticking point. In the past, a number of countries, including Japan, Malaysia and Singapore, which are all part of TPP, have kept the value of their currencies artificially low, which costs American jobs by making foreign goods cheaper. Two efforts to combat currency manipulation garnered bipartisan support in the Finance Committee. The one authored by Brown and Schumer was approved as part of the trade enforcement bill, while another, authored by Sens. Rob Portman (R-Ohio) and Debbie Stabenow (D-Mich.), was defeated.
Schumer predicted trouble for the administration if it didn't promise to protect the bill his amendment was attached to.
"Unless the administration says they won't veto it, they're going to lose a lot of votes on TPA, on the regular trade bill," Schumer told HuffPost earlier this month.
Unlike other Democratic demands, several Republicans support efforts to combat currency manipulation, as do many corporations, particularly in the steel and auto industries. Obama has warned that a poorly written currency provision could hamper the Federal Reserve's ability to conduct monetary policy, but many economists believe it would be simple to craft effective language that would give the Fed plenty of leeway. The Schumer-Brown bill would require the U.S. Department of Commerce to consider the effects of currency manipulation on trade complaints brought by U.S. companies. Those calculations would be included in international trade cases.
"If you represent a state like mine and you see what's happened in the last 25 years, you have to be very skeptical of arguments that seem to say, 'Just go away, your concerns are unwarranted, we're gonna fix all the problems of the past,'” said Sen. Bob Casey (D-Pa.). "It's just a basic disagreement."
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