WASHINGTON - Democratic Members of the House Committee on Ways and Means in coordination with their colleagues in the Congress today released a discussion draft of legislation to overhaul the current Trade Adjustment Assistance (TAA) program to better meet the needs of those affected by globalization. Members of the Committee will continue working with their colleagues in the Congress to incorporate feedback on the bill for consideration in the coming weeks.
The draft bill would expand TAA coverage to more workers, including service workers, and substantially improve training opportunities and health care benefits provided. The bill also creates new benefits and tax incentives for industries and communities that have been hit hard by trade. Finally, the legislation would promote long-needed reforms to the unemployment insurance system, recognizing that all unemployed workers, and not just those who lose their jobs because of trade, deserve our support in getting back on their feet.
"Fixing U.S. trade policy means first and foremost retaining existing jobs, and creating new ones by opening foreign markets and establishing a level playing field for U.S. workers, farmers and businesses," said Ways and Means Chairman Charles B. Rangel. "But, it also means helping those affected by globalization overcome its challenges and succeed. The Trade Adjustment Assistance (TAA) program is supposed to provide that assistance; however, the program has not kept pace with globalization."
Summary of provisions included in the draft legislation (detailed summary attached):
Expanding Assistance to Service Workers
Expanding Assistance to More Manufacturing Workers
Expanding Assistance to Entire Industries
Expanding Assistance to Entire Communities
Enhancing Training
Extending and Making the Wage Insurance Demonstration More Accessible
An Improved Health Care Benefit
Improving Outreach to Impacted Workers
Simplifying TAA’s Rules
Enhanced Job Search and Relocation Benefits
Greater Funding, Greater Expectations and Greater Accountability
Strengthening the Adjustment Assistance for Firms Program
Modernizing the Federal-State Unemployment Insurance System
Re-Authorizing the TAA Programs for Workers, Firms, and Farmers
Background of TAA Program:
Congress created TAA in 1962 to provide U.S. workers who lose their jobs because of foreign competition with government-funded training and associated income support to enable them to transition to new good paying jobs. The TAA program has been periodically reauthorized over the last 35 years, and now includes separate programs for workers, firms and farmers.
The current TAA program fails to meet the needs of those it was intended to help. For instance, despite the fact that the service sector employs 80% of the American workforce, TAA does not cover most service sector workers, including information technology workers, accountants, and aircraft maintenance crews, all of which now face competition from abroad. TAA also excludes many manufacturing workers because of illogical eligibility criteria (e.g., a worker whose factory moves to Mexico is guaranteed TAA coverage, while a worker whose factory moves to China is not).
TAA is also inadequately funded - and as a result, during periods of economic downturn, many who would like to participate in TAA cannot. TAA training coverage also has been artificially limited by the Department of Labor and some States’ restrictive interpretations of current law. The TAA health coverage tax credit, which was heralded as a major improvement to the program in 2002, has not proven to be an effective mechanism for providing health benefits to this population. Private insurance policies are unaffordable and impose rules designed to limit access to coverage, the application process is cumbersome, and even under the most efficient system the cost of administering the advance credit is excessive. As a result, only fifteen percent of those who are eligible have access to health benefits, despite the obvious need.
