Trade deals finally get the green light
A group of demonstrators hold up signs before a markup hearing of the Senate Finance Committee over free trade agreements with Colombia, Panama and South Korea.
Congress late last night passed three long-delayed free trade agreements. The pacts with South Korea, Panama and Columbia are a political victory for President Obama and for members of Congress; passage shows our politicians can actually work together on at least one form of economic stimulus, and in this case without additional government spending. And the agreements fit in with the Obama administration's desire to generate U.S. jobs by increasing US exports.
By one estimate, the pact with South Korea alone could create as many as 300,000 jobs in the U.S. And, according to the Washington Post, the removal of trade barriers with these three countries could increase U.S. exports of goods by at least $12 billion a year.
But not everyone is happy with the trade pacts; critics, such as trade unions, say that the pacts will actually lead to cheaper imports which in turn will lead to job losses in this country. To help workers displaced by free trade - and to get the votes of some Democrats - Congress also renewed the Trade Adjustment Assistance Program. It allocates about a billion dollars to provide retraining and extended unemployment benefits to American workers who lose their jobs because of free trade pacts.
We talked with Robert Scott, Director of Trade and Manufacturing Policy Research at the Economic Policy Institute. He says it's good that Congress allotted money to help displaced workers, but that it's not enough. Scott says that the Trade Adjustment Assistance is an explicit recognition that Americans lose jobs because of trade pacts. And he acknowledged that this bill expands the definition of displaced workers to include people in certain service industries.
However, Scott also says that the program needs to be bigger if it's going to help all the workers who lose their jobs because of free trade. He says that many workers are not made aware of the program and therefore never even apply for the benefits.
Scott also disagrees with the claim that free trade pacts create jobs. He says the benefits of free trade are always overstated; the costs downplayed. Scott says by his reckoning these pacts will result in a loss of American jobs. Scott and other critics say that these agreements may be good for American companies, but it doesn't necessarily follow that they're good for American workers.
Also on the show today, One of the most widely-reported parts of "Obamacare" was the 10 percent tax on tanning salons that was added to the bill. The tax was intended to rake in as much as $50 million a quarter. But the IRS has only managed to collect about $18 million a quarter on average. Why? Because fewer than half of the estimated 25,000 tanning salons in the country have filed their taxes! The IRS is usually ruthless with taxpayers, so the less-than-glowing news that it's failing to collect the tanning tax is weakening the Marketplace Daily Pulse today.