[CTC] Report suggests NAFTA 2.0 could be tied to a pension bill to ensure greater support

[Arthur Stamoulis]

Report suggests USMCA could be tied to a pension bill to ensure greater support
By Maria Curi, Inside US Trade 
09/27/2019
 
The Trump administration's U.S.-Mexico-Canada Agreement implementing bill is being eyed as a potential trade-off for a pension measure that might ensure more Democratic support for the trade deal, according to a report issued this week by a conservative think tank.
 
House Ways & Means Committee Chairman Richard Neal (D-MA) did not rule out a possible link between the two measures, noting on Friday that the House had already passed a “version” of the pension bill -- which he has sponsored -- while suggesting the issue could be up for negotiation.
 
“We'll have to wait and see,” Neal told Inside U.S. Trade. “I like negotiating, I can tell you that.”
 
The Sept. 26 report, published by the Heritage Foundation, states that “In an effort to secure Democratic support, Congress is flirting with the idea of attaching a taxpayer bailout for private union pension plans."
 
Its authors do not specify how the two might be linked; the 2015 Trade Promotion Authority law says implementing legislation for trade agreements cannot be amended.
 
The “Rehabilitation for Multiemployer Pensions Act”, which the House passed in July, would give a “select group” of pension plans more than “$100 billion in taxpayer dollars,” according to Heritage. “Bailout funds would include annual installments of direct cash (including $3 billion per year for one of the largest plans) as well as taxpayer-subsidized, 30-year, interest-only balloon payment loans to invest in the stock market in hopes of earning higher returns than their low-interest loans."
 
“The merits of the USMCA stand on their own, and there is no merit in bailing out reckless union pension plans without reforming the broken system,” the report states. “Doing so would threaten passage of the USMCA.”
 
Tori Whiting, a trade economist for Heritage and a co-author of the report, told Inside U.S. Trade it was “likely” that “the two issues would be connected in a quid pro quo” scenario.
 
“We’ll pass yours if you pass ours,” she summarized. Whiting declined to say who was mulling the idea.
 
Neal is leading a House working group assigned by Speaker Nancy Pelosi (D-CA) to negotiate USMCA issues with the administration. He is also the sponsor of the Rehabilitation for Multiemployer Pensions Act, also known as the “Butch Lewis Act.”
 
Pressed on Friday about whether he was considering a link between the pension bill and USMCA, Neal said “No,” but added, “look, I just got to get the Butch Lewis Act over the goal line.”
 
“The House passed a great version of the Butch Lewis Act,” he said. “It remains a priority for me.”
 
The move might also win support from labor, a crucial constituency for the administration as it tries to ensure sufficient support for USMCA. The Butch Lewis Act has been endorsed by the AFL-CIO and other major labor groups, such as the International Association of Machinists and Aerospace Workers, Brotherhood of Teamsters and United Steelworkers.
 
The Butch Lewis Act is “a big priority for the labor movement,” a union source told Inside U.S. Trade.
 
“If it’s combined with the long-term demands related to [USMCA] enforcement in labor rights then that would be a big deal. If Neal were to tack that on successfully, we wouldn’t be opposed,” the source said.
 
However, “If they were to walk back on labor enforcement mechanisms in exchange, that would be problematic,” the source added, citing a USMCA-related labor enforcement proposal introduced in April by Sens. Ron Wyden (D-OR) and Sherrod Brown (D-OH).
 
Democrats and labor advocates are adamant that USMCA’s labor provisions have teeth. The USMCA working group on Friday presented U.S. Trade Representative Robert Lighthizer a counterproposal for how to address the party’s outstanding concerns with USMCA, including labor enforceability. USTR sent its proposal to the working group earlier this month.
 
After meeting with AFL-CIO president Richard Trumka this week, Neal said he wanted to get Trumka and Lighthizer together to work on labor issues. Neal told reporters after a meeting between the working group and Lighthizer on Friday that Trumka and the USTR had said separately that the pairing was “a good idea."
 
The working group’s counterproposal to USTR addressed all four areas of concern -- labor, environment, pharmaceuticals and enforceability, Neal said.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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