H. Rept. 110-345 - 110th Congress (2007-2008)
September 24, 2007, As Reported by the Ways and Means Committee

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




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

    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 (``the TAA programs'') expire on September 
30, 2007.

                        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).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2008     2009     2010     2011     2012
----------------------------------------------------------------------------------------------------------------
                                  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
----------------------------------------------------------------------------------------------------------------
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.

           *       *       *       *       *       *       *