Capitol Hill: TPA Pathways

Published on June 23, 2015

The immediate fate of the stand-alone Trade Promotion Authority will be determined by a cloture vote in the Senate scheduled to begin at 11:00 this morning. The vote should provide a good indication of how the actual vote on the TPA itself will go, which could come as soon as later this afternoon or as late as Friday if the cloture vote fails.

‎*** On balance, we think Senate Majority Leader Mitch McConnell will manage to steer both the cloture and the TPA vote, as well as the later Trade Adjustment Assistance bill now be attached to the African Growth Opportunity Act‎, to a narrow passage before the end of this week. House passage next week of the TAA/AGOA, however, will be far more problematic and may fail. ***

*** The key will be a change of tactics among Democrats once the TPA has cleared the Senate, from blocking TPA by voting against the TAA to a scramble to salvage the TAA and protecting its constituency of workers displaced by trade. Indeed, that is essentially the bet taken by the Republican leadership and President Obama when they relaunched the repackaged trade deal. ***

*** The trade narrative, we think, will by next week shift increasingly towards whether the TAA can be passed or how long it will take and, most of all, what political price President Obama may be forced to pay in order to win his “fast track” power to negotiate the final terms of the massive Trans-Pacific Partnership. ***

Eleven Senate Democrats

Under the path mapped out by Senate Majority Leader Mitch McConnell and House Speaker John Boehner, in coordination with President Obama, the push to pass TPA was to be re-sequenced and repackaged. The new plan began with a House vote on a standalone TPA bill, which barely passed by a single vote last Thursday, 218-208, with eight House members not voting. Later today it is the Senate’s turn.

To get to a filibuster-proof 60 votes on cloture this morning, Senate Majority Leader Mitch McConnell will need the yes votes of at least eleven, if not a dozen of the 14 Democrats who voted for the original TPA bill in May of this year May when it was joined to TAA bill that expires in September. Texas Republican Senator Ted Cruz has now said he will switch to a no vote.

The opposition to the TPA, which includes both Minority Leader Harry Reid and his likely successor New York Senator Chuck Schumer, will seek to peel away three or more of those 14 Democrats on the grounds they should vote to force further debate but without voting against the TPA itself. McConnell will be picking up a GOP vote from Wyoming’s Mike Enzi who did not vote last year to offset the loss of Cruz if he follows through on his switch, and McConnell may also resort to pure partisan arguments with Utah’s Mike Lee or his fellow Kentuckian Rand Paul to vote with him on cloture, which would raise Reid’s number to a very tough-to-reach five to turn.

The vote is indeed going to be very close, but on balance, we suspect Minority Leader Reid will fail to prevent cloture by winning over no more than one or two no votes from the 14 pro-trade Senate Democrats.

Senators Mike Bennet from Colorado, Maria Cantwell from Washington, Ben Cardin from Maryland, Heidi Heitkamp from North Dakota, and Mark Warner from Virginia are said to have met Monday afternoon to discuss their views among themselves. Murray, Bennet, Heitkamp, and Warner look to be solidly in favor of TPA and are likely to vote for cloture, while Cantwell is wavering and Cardin may be leaning to a vote against.

Amendments if Cloture Fails

If cloture fails, that would then open the Senate floor to 30 hours of debates and new amendments to the TPA bill. Anxious pro-trade Democrats are pressing for extra sweeteners to ensure additional votes, by increasing the $450 million funding of the TAA back to its pre-2011 $575 million levels, or as seems likely, to propose attaching the re-authorization of the Export import Bank, whose funding expires at the end of this month.

Any amendments would slow and greatly complicate passage of the TPA because they would then have to go back to the House, where they would almost certainly be voted down, and the Ex-Im amendment would probably cost more Republican votes than the Democratic votes it would gain in the Senate anyway. The push for amendments to the TPA, in other words, would only delay or derail the TPA altogether at this point.

A revival of the amendment to make addressing currency manipulation a trade issue could also be brought to another floor vote by its co-sponsors, Republican Senator Ron Portman and Michigan Democrat Debbie Stabenow.

But it was already narrowly defeated 48-51 when it was first brought up last month, and it would probably gravely wound the TPA prospects if it made headway this time. We think though that it too will be kept out of the TPA, perhaps put to its own standalone vote or be pushed into the reconciliation of the customs enforcement bill.

Beyond Cloture

The outcome of the cloture vote will provide a good indication of how much support the TPA bill will have when it comes to a Senate floor vote. We think it will be a narrow win, but that it will pass with at least 60 votes, with either eleven of the 14 pro-trade Democrats sticking to their original vote, or perhaps with McConnell even turning one of the six Republicans who voted against TPA on the first round.

If TPA is passed, there will be a second cloture vote on a newly combined TAA with H.R. 1215, the Africa Growth Opportunity Act piece of the original four part trade bill the Senate passed in May. If, as expected, cloture is adopted and if, as expected, debate time is “yielded back” — meaning no Senator objects to a shorter debate — the vote on this second bill would be on Thursday, and which we think will, again, narrowly pass.

If that bill passes, the Senate will vote on a motion to go to conference with the House on the custom trade preferences bill, after which the Senate will recess. The TAA/AGOA bill then moves to the House for further action, likely next week.

There is also a fourth bill in the original four-part trade package, a customs enforcement bill, that was already passed by both the Senate and House in different versions that will still need reconciled in conference later.

A Difficult House Vote

The House vote on the TAA/AGOA is likely to be the highest hurdle for the trade package of bills to jump in order for all its pieces to reach President Obama before the House joins the Senate for the Fourth of July recess.

Speaker Boehner has promised a vote on the TAA soon after TPA if it passes the Senate, but the odds are strongly against the bill garnering much more than the 86 House Republicans who voted for the TAA the last time. That means in order for it to pass, most of the 140 Democratic votes against it when TAA was a protest vote against the TPA will need to switch to voting for it, a highly unlikely prospect.

Next week, the TAA vote is real, on the program itself, which while not perfect perhaps, does distribute $450 million a year to those workers displaced by trade.

There is an assumption by Speaker Boehner and President Obama that there is no point in tactically blocking the TAA bill again if the TPA bill has already passed and that instead the psychology of the vote will shift from the Democrats seeking to again block TPA to salvaging what they can in terms of protecting workers. That will become especially become a factor when those constituencies lobby to protect what they may lose. The Congressional Black Caucus, for instance, has already asked the Senate not to use the AGOA bill as a bargaining chip to pass TPA.

The TAA/AGOA could always pass in the House, but we suspect it will fail, which will present President Obama with something of a dilemma.

While there is a possibility of a delay for a few days if Speaker Boehner opts to take his time in forwarding the bill to the White House, passing the TPA bill in the Senate essentially starts a ten day clock to sign the TPA bill into law; failure to do so becomes tantamount to a “pocket veto” that cannot be overturned.

The President’s Wiggle Room

President Obama has promised not to sign the TPA bill into law unless the TAA is also passed, at least in so many words, leaving himself some wiggle room with his press secretary only asserting the president expects to see all four pieces of the trade package on his desk for signing.

So it will be interesting to see to what extent President Obama’s rhetoric and tone changes once he has the TPA bill on his desk. With the stakes so high on a signature trade bill he dearly wants before the end of his final term, we suspect President Obama may try to shift the trade narrative to what can be done to save the TAA by passing it later on the rebound.

We suspect the best opportunity to do so may come in September, before the current TAA program expires that month, by attaching it to an Appropriations Omnibus that seems increasingly likely for the FY2016 budget.

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