Senate Democrats, Bush Agree to a Compromise on U.S. Trade-Displaced Workers’ Health Benefits

Senate Democrats and White House negotiators yesterday "resolved major disputes" over a provision in a Senate trade bill that would provide health benefits for about 100,000 U.S. workers displaced by international trade, the Washington Post reports. The provision, part of legislation that would renew "fast-track" trade negotiating authority for the president, would provide uninsured trade-displaced workers with advanceable tax credits to cover as much as 70% of the cost of their health insurance premiums (Dewar, Washington Post, 5/10). The workers could use the tax credits to purchase health insurance through COBRA -- the 1986 Consolidated Omnibus Budget Reconciliation Act, which allows unemployed workers to retain employer-sponsored health coverage by paying 102% of the premiums -- or through group health insurance pools established by states (Mitchell, New York Times, 5/10). Senate Majority Leader Tom Daschle (D-S.D.) earlier this month proposed an amendment to the trade bill that would have offered trade-displaced workers a tax credit to cover 73% of the cost of their health insurance premiums (California Healthline, 5/2). Senate Democrats yesterday "settled for 70%," the Post reports. The compromise legislation, expected to cost as much as $12 billion over 10 years, also would extend health benefits to workers "who supply goods to a manufacturer that is harmed by trade competition" (Washington Post, 5/10). The compromise bill, "hammered out" by Senate Finance Committee Chair Max Baucus (D-Mont.) and ranking member Sen. Charles Grassley (R-Iowa), "now must survive amendments, a conference committee and final votes" in the House and Senate (Norton, CongressDaily/AM, 5/10). The health care provisions in the Senate version of the trade bill will likely "become the major sticking point" in negotiations with the House, the Wall Street Journal reports (Wall Street Journal, 5/10). Last year, the House approved a version of the legislation that does not include health benefits for trade-displaced workers (New York Times, 5/10). President Bush plans to issue a statement in support of the compromise, Grassley said (CongressDaily/AM, 5/10).

As part of the compromise, Senate Democrats agreed to drop a provision opposed by Sen. Phil Gramm (R-Texas) that would have temporarily provided health benefits to retired steel workers, the Post reports (Washington Post, 5/10). The provision had "infuriated" many Republicans who said that the measure represented an "effort to inch toward" universal health coverage (New York Times, 5/10). Sen. Barbara Mikulski (D-Md.) said that she plans to propose an amendment to the Senate version of the trade bill to reinstate the steel workers provision, which Daschle said that he would support (CongressDaily/AM, 5/10). The amendment could pass "if supporters can find a way to pay for the estimated $400 million annual cost," the Journal reports, but the amendment would "again stir a furor" among some Republicans and could "reignite the fight to defeat" the larger trade bill (King/Murray, Wall Street Journal, 5/10).