January Legislative Update
January 29, 2015

President Obama Asks for Trade Promotion Authority in State of the Union Address

President Barack Obama called for support of Trade Promotion Authority (TPA) as well pending trade agreements with countries in Europe and Asia in his annual State of the Union address before Congress on January 20.

The President stressed the need for congressional approval of TPA as negotiations continue on The Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).  “China wants to write the rules for the world’s fastest-growing region,” the President said.  “We should write those rules.  We should level the playing field.”  TPA would “protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.”

In his sixth State of the Union speech, President Obama asserted that these trade deals would boost the American economy.  “I’m the first one to admit that past trade deals haven’t always lived up to the hype,” acknowledged the President.  “But ninety-five percent of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities.”  He cited as an example: “More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China.  Let’s give them one more reason to get it done.”

The response by Republicans and Democrats to the President’s message was immediate.  Senate Finance Committee Chairman Orrin Hatch (R-UT) criticized the President’s support of TPA as “welcome but long overdue.”  House Ways and Means Committee Chairman Paul Ryan (R-WI) noted that he was “glad to hear the President ask Congress to pass trade-promotion authority,” but said that the President “needs to convince his party to vote for TPA – and soon.”  House Ways and Means Ranking Member Sander Levin (D-MI) did not comment on the President’s request for TPA, but praised the President’s agenda “to advance opportunities for middle class families.”  Senator Ron Wyden (D-OR), Ranking Member of the Senate Finance Committee, saw the President’s proposals for trade “as good and serious starting points” and “a catalyst for bipartisan, common-sense discussion.”  

For the full text of President Obama’s State of the Union address, please click here.  Please click here for responses to the State of the Union by Hatch, Wyden, Ryan, and Levin.

Trade Promotion Authority a Priority for New Ways and Means Chairman

In the first hearing held by House Committee on Ways and Means in the 114th Congress, new Chairman Paul Ryan (R-WI) set his main objectives for the coming year.  Chairman Ryan emphasized job creation and economic growth and highlighted the importance of certain outstanding trade measures towards achieving those goals.  

Trade Promotion Authority (TPA) is a priority for the Chairman, as indicated by his opening statement at the January 13 hearing as well as the press release he issued two days later.  “[T]he first thing we have to do is pass Trade Promotion Authority,” Chairman Ryan said.  “TPA would empower Congress to set our negotiating objectives and hold the administration accountable. TPA would also help us get the best deal from our trading partners.”  He further characterized TPA as an essential step that “House Republicans are ready to take now.”  

Ranking Member Sander Levin (D-MI), however, expressed that the crucial focus should be on “many of the key issues still unresolved” in the Trans-Pacific Partnership (TPP).  Describing TPP as “the most significant multilateral negotiation in over 20 years,” he stated that “[t]he important challenge is not to just get it done, but to get it right.”  Last month, the Ranking Member likened moving on TPA before the conclusion of TPP negotiations to putting “the cart before the horse.”    

The witness list for the hearing, which was entitled “Moving America Forward: With a Focus on Economic Growth,”  included Martin Feldstein, the George F. Baker Professor of Economics at Harvard and President Emeritus of the National Bureau of Economic Research; Douglas Holtz-Eakin, President, American Action Forum; and Simon Johnson, Ronald A. Kurtz (1954) Professor of Entrepreneurship at the MIT Sloan School of Management. Chairman Ryan’s opening statement can be found here.  Ranking Member Levin’s opening statement can be found here.

TPA Tops Trade Agenda for Senate Finance Committee Chairman

Incoming Senate Finance Committee Chairman Orrin Hatch (R-UT) delivered a speech at the U.S. Chamber of Commerce on January 20 outlining the Committee’s priorities for the 114th Congress, while also providing contrast to anticipated remarks from President Obama’s State of the Union address, scheduled later that evening.  The Chairman flagged international trade as a “high priority” item on the Finance Committee agenda, and the renewal of Trade Promotion Authority (TPA) ranked highest on the Senator’s trade action items list. 

Chairman Hatch stated that his plan is to “move carefully but quickly to introduce and mark up a TPA bill.”  He also noted that he has been in touch with Senate Finance Ranking Member Ron Wyden (D-OR) and Ways and Means Chairman Paul Ryan (R-WI) to discuss potential improvements so that they could introduce “a bipartisan, bicameral bill in this Congress that we can move in short order.”   Ways and Means Ranking Member Sander Levin (D-MI) has not been involved in these discussions. 

Each political party has members who are skeptical about TPA, but for different reasons.  Chairman Hatch acknowledged this in his speech by countering criticism, mostly from Republican members, that TPA cedes too much authority to the President.  He argued that “the opposite is true” and pointed to reforms added to TPA legislation introduced last year that enhance the role of Congress.  Chairman Hatch also called upon President Obama to be more “forward-leaning with members of his party – starting with tonight’s State of the Union address” so that TPA could be passed quickly.

A copy of Chairman Hatch’s complete speech, as prepared for delivery, can be found here

Upcoming Committee Hearings on the Economy and Trade

The House Committee on Ways and Means has announced a hearing on the “U.S. Trade Policy Agenda,” to take place on January 27.  U.S. Trade Representative Michael Froman will appear before the Committee and discuss the President’s U.S. trade policy objectives for the upcoming year.

The Senate Committee on Finance will hold a hearing entitled, “Jobs and a Healthy Economy,” on January 22.  The hearing will cover broad topics within the committee’s jurisdiction as they relate to jobs and the economy, including tax reform, healthcare, entitlement reform and trade. 

Witnesses scheduled to appear include The Honorable John Engler, President, Business Roundtable; Robert E. Hall, Senior Fellow, Stanford University’s Hoover Institution, and Professor of Economics, Stanford University; and Justin Wolfers, Senior Fellow, Peterson Institute for International Economics and Professor of Public Policy, Gerald R. Ford School of Public Policy and Professor of Economics, College of Literature, University of Michigan. 

More information about the House hearing is available here. More information about the Senate hearing is available here.