House Report 110-345 - TEMPORARY EXTENSION OF TRADE ADJUSTMENT ASSISTANCE PROGRAM

[House Report 110-345]
[From the U.S. Government Publishing Office]

110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-345

======================================================================

TEMPORARY EXTENSION OF TRADE ADJUSTMENT ASSISTANCE PROGRAM

_______

September 24, 2007.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed

_______

Mr. Rangel, from the Committee on Ways and Means, submitted the
following

R E P O R T

[To accompany H.R. 3375]

[Including cost estimate of the Congressional Budget Office]

The Committee on Ways and Means, to whom was referred the
bill (H.R. 3375) to extend the trade adjustment assistance
program under the Trade Act of 1974 for 3 months, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. TEMPORARY EXTENSION OF TRADE ADJUSTMENT ASSISTANCE PROGRAM.

(a) Assistance for Workers.--Section 245(a) of the Trade Act of
1974 (19 U.S.C. 2317(a)) is amended by striking ``September 30, 2007''
and inserting ``December 31, 2007''.
(b) Assistance for Firms.--Section 256(b) of the Trade Act of 1974
(19 U.S.C. 2346(b)) is amended by inserting after ``2007,'' the
following: ``and $4,000,000 for the 3-month period beginning on October
1, 2007,''.
(c) Assistance for Farmers.--Section 298(a) of the Trade Act of
1974 (19 U.S.C. 2401g(a)) is amended by inserting before the period the
following: ``, and there are authorized to be appropriated and there
are appropriated to the Department of Agriculture to carry out this
chapter $9,000,000 for the 3-month period beginning on October 1,
2007''.
(d) Extension of Termination Dates.--Section 285 of the Trade Act
of 1974 (19 U.S.C. 2271 note) is amended by striking ``September 30''
each place it appears and inserting ``December 31''.
(e) Effective Date.--The amendments made by this section shall be
effective as of October 1, 2007.

SUMMARY AND BACKGROUND

Purpose and Summary

The bill, H.R. 3375, as amended, would extend the Trade
Adjustment Assistance program beyond its expiration date of
September 30, 2007, for three months to December 31, 2007.
Because of the language in the underlying law, extending the
Adjustment Assistance for Farmers program required authorizing
and appropriating funds to cover $9 million in budget authority
and outlays, as estimated by the Congressional Budget Office.

Background and Need for Legislation

Section 221 et seq. of the Trade Act of 1974, as amended by
the Trade Adjustment Assistance Reform Act of 2002, comprises
three programs: Adjustment Assistance for Workers, Adjustment
Assistance for Firms, and Adjustment Assistance for Farmers.
All three programs expire on September 30, 2007.
Trade Adjustment Assistance legislation reauthorizing and
reforming the program is in the process of being developed and
should be introduced shortly. However, the introduction and
subsequent consideration of the legislation will not occur
before the program's September 30, 2007 expiration. Therefore,
until the comprehensive TAA reform and reauthorization bill is
passed and enacted into law, an extension of the existing law
is needed to ensure that individuals and firms adversely
affected by trade get the assistance they need and deserve.

Legislative History

H.R. 3375, a bill to extend the trade adjustment assistance
program under the Trade Act of 1974 for 3 months, was
introduced on August 3, 2007 and referred to the House
Committee on Ways and Means.
The House Committee on Ways and Means marked up H.R. 3375
on September 18, 2007, and ordered the bill, as amended,
favorably reported by voice vote.

EXPLANATION OF THE BILL

(Sec. 1 of the bill, as amended, and sec. 2317(a), 2346(b), 2401(g)(a),
and 2271 note of the Act)

CURRENT LAW

EXPLANATION OF PROVISION

Section 1 of H.R. 3375, as amended, would extend the
expiration date of the TAA programs to December, 31, 2007.
Because of the language in the underlying law, extending
the Adjustment Assistance for Farmers program required
authorizing and appropriating funds to cover the cost of the
program for the duration of the extension. The Committee
therefore authorized and appropriated $9 million. The
Committee's decision to authorize and appropriate $9 million
for the Adjustment Assistance for Farmers program should not be
considered a cut in funding for the program. The Adjustment
Assistance for Farmers program is under used. See ``New Program
for Farmers Provides Some Assistance, but Has Had Limited
Participation and Low Program Expenditures,'' (Government
Accountability Office, December 2006). In light of this under
use, the Committee provided the level of funding that the
Congressional Budget Office estimated the Adjustment Assistance
for Farmers program would cost in terms of budget authority and
outlays over the course of the three month extension.\1\ When
the bill, as amended, comes to the floor, the Committee intends
to offer a manager's amendment that extends Customs users' fees
and makes a shift in corporate estimated tax payments to offset
the $9 million in budget authority and outlays.
---------------------------------------------------------------------------
\1\Because the Congressional Budget Office included the Adjustment
Assistance for Workers and the Adjustment Assistance for Firms programs
in its FY 2008 budget baselines, a similar analysis was not required.
---------------------------------------------------------------------------
To the extent that authorization levels for this program,
or any of the other TAA programs, are at issue, they will be
taken up when the Committee considers TAA reform and
reauthorization legislation later this year and not in
connection with this simple extension of existing law.

EFFECTIVE DATE

The provision would take effect on October 1, 2007.

VOTE OF THE COMMITTEE

In compliance with clause 2(y) of rule XI of the Rules of
the House of Representatives, the bill, H.R. 3375, was ordered
favorably reported to the House of Representatives by voice
vote (with a quorum being present).

BUDGET EFFECTS OF THE BILL

Committee Estimate of Budgetary Effects

In compliance with clause 3(d)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made concerning the effects on the budget of this bill, H.R.
3375, as reported: The Committee agrees with the estimate
prepared by CBO which is included below.

Statement Regarding New Budget Authority and Tax

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that
enactment of H.R. 3375 would provide new budget authority
regarding the Adjustment Assistance for Farmers program for the
duration of the three month extension.

Cost Estimate Prepared by the Congressional Budget Office

In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following report prepared by the CBO
is provided:

U.S. Congress,
Congressional Budget Office,
Washington, DC, September 21, 2007.
Hon. Charles B. Rangel,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3375, a bill to
extend the trade adjustment assistance program under the Trade
Act of 1974 for three months.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Christina
Hawley Anthony.
Sincerely,
Robert A. Sunshine
(For Peter R. Orszag, Director).
Enclosure.

H.R. 3375--A bill to extend the trade adjustment assistance program
under the Trade Act of 1974 for three months

Summary: H.R. 3375 would extend certain programs authorized
under the Trade Act of 1974 for three months, through December
31, 2007. Under current law, the authority for those Trade
Adjustment Assistance (TAA) programs--TAA for Firms, TAA for
Farmers and Fishermen, and TAA for Workers--is scheduled to
expire on September 30, 2007.
Assuming appropriation of the authorized amount, CBO
estimates that implementing H.R. 3375 would increase
discretionary spending for TAA for Firms by $4 million over the
next two years. CBO estimates that enacting the bill also would
increase mandatory spending by $9 million in fiscal year 2008,
under the TAA for Farmers program. The costs of extending TAA
for Workers are assumed in the current baseline; thus, we
estimate no additional costs for that extension. In addition,
the bill would affect direct spending and revenues for tax
credits for health insurance, but those effects also are
assumed in the current baseline. The net effects of the bill
that are already assumed in the baseline would add $214 million
to the deficit in 2008.
H.R. 3375 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA);
any costs to state governments would be incurred voluntarily.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 3375 is shown in the following table.
The costs of this legislation fall within budget functions 350
(agriculture) and 450 (community and regional development).

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By fiscal year, in millions of dollars--
--------------------------------------------
2008 2009 2010 2011 2012
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CHANGES IN SPENDING SUBJECT TO APPROPRIATION

TAA for Firms:
Authorization Level............................................ 4 0 0 0 0
Estimated Outlays.............................................. 1 3 0 0 0

CHANGES IN DIRECT SPENDING

TAA for Farmers and Fishermen:
Budget Authority............................................... 9 0 0 0 0
Estimated Outlays.............................................. 9 0 0 0 0
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Notes.--The costs of continuing TAA for Workers are assumed to continue in CBO's baseline, consistent with
section 257 of the Deficit Control Act. Beneficiaries under the TAA for Workers program also are eligible for
a health care tax credit, which would affect outlays and revenues. The outlay and revenue effects of extending
that credit to those beneficiaries also are assumed to continue in the current baseline. TAA = Trade
Adjustment Assistance.

Basis of estimate: For purposes of this estimate, CBO
assumes that H.R. 3375 will be enacted by the end of fiscal
year 2007, and that amount authorized for 2008 will be
appropriated. H.R. 3375 would extend the authorization of TAA
programs for workers, farmers and fishermen, and firms for
three months, through December 31, 2007. Under current law,
authorizations for those programs expire on September 30, 2007.

Spending subject to appropriation

H.R. 3375 would authorize the appropriation of $4 million
for the three-month period beginning on October 1, 2007, for
the Secretary of Commerce to provide financial assistance to
domestic firms experiencing a decline in sales and employment
to become more competitive. CBO estimates that implementing
this provision would cost $4 million over the next two years,
assuming appropriation of the specified amount.

Direct spending and revenues

The TAA for Farmers program provides compensation to
agricultural producers who, as a consequence of increased
imports, face prices that are less than 80 percent of the
average price over the previous five years for their products.
The bill would appropriate $9 million for the TAA for Farmers
program for the three-month period from October 1, 2007, to
December 31, 2007. Under current law, $90 million was
appropriated for each year over the 2003-2007 period, although
spending was well below the amounts provided in those years--a
total of $47 million through 2006. CBO estimates that the $9
million provided in this bill would be spent in 2008 to cover
administrative costs and payments to producers of any
commodities that may qualify for compensation during the three-
month period.
In addition, the bill would reauthorize the TAA for Workers
program through December 31, 2007. The authority for that
program, which provides extended unemployment and training
benefits for workers who lose their jobs as a result of
increased international trade, would otherwise expire on
September 30, 2007. Consistent with the budget projection rules
in section 257 of the Deficit Control Act, the costs of
extending TAA for Workers are included in CBO's baseline. CBO
estimates that outlays for that program would total about $200
million over the three-month period covered by H.R. 3375.
Workers who are certified as eligible for TAA also may be
eligible for a health care tax credit (HCTC) to subsidize the
cost of health insurance. The TAA-related costs of that
program, which include both increased outlays and reduced
revenues, also are assumed to continue in CBO's baseline. The
Joint Committee on Taxation estimates that outlays for the HCTC
related to TAA beneficiaries would total $9 million over the
three-month period covered by H.R. 3375. Reduced revenues over
that period are estimated at $5 million.
Intergovernmental and private-sector impact: H.R. 3375
contains no intergovernmental or private-sector mandates as
defined in UMRA. States that provide employment services,
training, and supplemental assistance under cooperative
agreements with the U.S. Department of Labor would benefit from
the program extension authorized in the bill. Any costs those
states might incur to comply with program conditions would be
incurred voluntarily.
Estimate prepared by: Federal Costs: TAA for Firms--Daniel
Hoople; TAA for Farmers and Fishermen--Dave Hull; TAA for
Workers--Christina Hawley Anthony. Impact on State, Local, and
Tribal Governments: Lisa Ramirez-Branum. Impact on the Private
Sector: Jacob Kuipers.
Estimate approved by: Peter H. Fontaine, Assistant Director
for Budget Analysis.

OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

Committee Oversight Findings and Recommendations

With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee concluded that it was appropriate and timely to
enact the extension included in the bill as reported.

Statement of General Performance Goals and Objectives

With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
The Departments of Labor, Commerce, and Agriculture shall
use the authority and, in the case of the Department of
Agriculture, appropriations provided for by the legislation to
continue to enroll and assist individuals and firms impacted by
trade, as contemplated by Section 221 et seq. of the Trade Act
of 1974, as amended by the Trade Adjustment Assistance Reform
Act of 2002.

Constitutional Authority Statement

With respect to clause 3(d)(1) of rule XIII of the Rules of
the House of Representatives, relating to Constitutional
Authority, the Committee states that the Committee's action in
reporting the bill is derived from Article 1 of the
Constitution, Section 8 (`The Congress shall have power to lay
and collect taxes, duties, imposts and excises, to pay the
debts and to provide for * * * the general Welfare of the
United States.')

Information Relating to Unfunded Mandates

This information is provided in accordance with section 423
of the Unfunded Mandate Act of 1995 (P.L. 104-4). The Committee
has determined that the bill, as reported, does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments. However, when the bill, as amended, comes before
the full House of Representatives, a manager's amendment will
be proposed that will extend Customs users fees and make a
shift in corporate estimated tax payments to pay for the $9
million in new mandatory spending included in the legislation.
Historically, the Congressional Budget Office has considered
such fee extensions to be unfunded mandates imposed on the
private sector.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

TRADE ACT OF 1974

* * * * * * *
TITLE II--RELIEF FROM INJURY CAUSED BY IMPORT COMPETITION

* * * * * * *

CHAPTER 2--ADJUSTMENT ASSISTANCE FOR WORKERS

* * * * * * *

Subchapter C--General Provisions

* * * * * * *

SEC. 245. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated to
the Department of Labor, for the period beginning October 1,
2001, and ending [September 30, 2007] December 31, 2007, such
sums as may be necessary to carry out the purposes of this
chapter.

* * * * * * *

CHAPTER 3--ADJUSTMENT ASSISTANCE FOR FIRMS

* * * * * * *

SEC. 256. DELEGATION OF FUNCTIONS TO SMALL BUSINESS ADMINISTRATION;
AUTHORIZATION OF APPROPRIATIONS.

(a) * * *
(b) There are authorized to be appropriated to the Secretary
$16,000,000 for each of fiscal years 2003 through 2007, and
$4,000,000 for the 3-month period beginning on October 1, 2007,
to carry out the Secretary's functions under this chapter in
connection with furnishing adjustment assistance to firms.
Amounts appropriated under this subsection shall remain
available until expended.

* * * * * * *

CHAPTER 5--MISCELLANEOUS PROVISIONS

* * * * * * *

SEC. 285. TERMINATION.

(a) Assistance for Workers.--
(1) In general.--Except as provided in paragraph (2),
trade adjustment assistance, vouchers, allowances, and
other payments or benefits may not be provided under
chapter 2 after [September 30] December 31, 2007.
(2) Exception.--Notwithstanding paragraph (1), a
worker shall continue to receive trade adjustment
assistance benefits and other benefits under chapter 2
for any week for which the worker meets the eligibility
requirements of that chapter, if on or before
[September 30] December 31, 2007, the worker is--
(A) * * *

* * * * * * *

(b) Other Assistance.--
(1) Assistance for firms.--Technical assistance may
not be provided under chapter 3 after [September 30]
December 31, 2007.
(2) Assistance for farmers.--
(A) In general.--Except as provided in
subparagraph (B), adjustment assistance,
vouchers, allowances, and other payments or
benefits may not be provided under chapter 6
after [September 30] December 31, 2007.
(B) Exception.--Notwithstanding subparagraph
(A), an agricultural commodity producer (as
defined in section 291(2)) shall continue to
receive adjustment assistance benefits and
other benefits under chapter 6, for any week
for which the agricultural commodity producer
meets the eligibility requirements of chapter
6, if on or before [September 30] December 31,
2007, the agricultural commodity producer is--
(i) * * *

* * * * * * *

CHAPTER 6--ADJUSTMENT ASSISTANCE FOR FARMERS

* * * * * * *

SEC. 298. AUTHORIZATION OF APPROPRIATIONS.

(a) In General.--There are authorized to be appropriated and
there are appropriated to the Department of Agriculture not to
exceed $90,000,000 for each of the fiscal years 2003 through
2007 to carry out the purposes of this chapter, and there are
authorized to be appropriated and there are appropriated to the
Department of Agriculture to carry out this chapter $9,000,000
for the 3-month period beginning on October 1, 2007.

* * * * * * *