Bush administration won't say how it would pay for NAFTA job retraining

September 16, 1992|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- The Bush administration refused yesterday to specify how it would finance the $10 billion it has proposed spending to retrain up to 150,000 U.S. workers who could lose their jobs because of a proposed trade agreement among the United States, Canada and Mexico.

Labor Secretary Lynn Martin told members of the House Ways and Means Committee that a $10 billion, five-year retraining program for victims of industrial dislocation -- including those affected by the North American Free Trade Agreement -- would be in next year's budget, to be paid for with existing revenues and "some cuts and some changes."

But Rep. J. J. Pickle, a Texas Democrat concerned over the possible loss of 6,000 agricultural jobs and a drop in cross-border retail sales in his state, told Ms. Martin bluntly: "You should give us something specific."

Rep. Frank J. Guarini, a Democrat from New Jersey, charged that she was simply issuing "a promissory note."

Ms. Martin responded: "The funding for this will be in the president's budget, which is long before you vote on NAFTA. It's not a case that we're saying 'Ha, ha, ha, vote on this and then we'll tell you how' " to pay for it.

Pressed by committee Chairman Dan Rostenkowski of Illinois to say whether any program cuts would be necessary to pay for the retraining program, she replied: "We have to make tough choices."

Ms. Martin rejected a proposal, made in July by House Majority Leader Richard A. Gephardt, for a new tax on cross-border transactions to fund the retraining program, telling the committee: "I think that would be just a new definition of another tariff. I don't believe that is in the interest of either country."

Under the administration's worker-adjustment program, $1.3 billion of the $2 billion that would be spent annually on retraining would be allotted to states to help them respond to trade-related employment shifts and other industrial dislocation.

The remaining $700 million would be retained by the labor secretary, with half reserved for those hurt by the trade agreement and the rest for defense-related and other industrywide layoffs.

The administration's adjustment program would cover workers who were terminated, under notice, or felt "at risk" of losing their jobs.

Ms. Martin insisted that the free-trade agreement, which must be ratified by the legislatures in all three countries, would create a net gain in U.S. jobs.

Most studies, she said, projected net gains of between 90,000 and 180,000 jobs here. The 150,000 possible job losses over five years was the "absolute top end of the range" of industrial dislocation, she said. The administration retraining program would prepare those workers to fill the higher-skilled and higher-paying jobs that the trade accord will create, she said.

Critics of the agreement charge that most of the American jobs that would be lost would be high-paying manufacturing positions as U.S. companies move to take advantage of Mexico's lower wages and health and environmental standards.

Several Democrats on the committee, including Baltimore's Benjamin L. Cardin, expressed concern over the adequacy of the agreement's mechanisms for correcting Mexican failure to improve standards of child-labor, workers' rights, industrial safety or environmental improvement.

But Deputy Secretary of Labor Delbert Spurlock told the committee: "The fact of the matter is that what we are negotiating here is a trade agreement, not a social contract."

In a separate development yesterday, three public interest groups -- Friends of the Earth, the Sierra Club and Public Citizen, a consumers' lobby -- refiled a federal lawsuit to force the government to issue an environmental-impact statement for the free-trade agreement under a 1970 law that requires such statements for all major federal proj- ects.

The original November 1991 suit was dismissed on the grounds that the case could not be decided until the free-trade agreement was actually reached. It was signed last month.

Alex Hittle, of Friends of the Earth, said an environmental-impact statement would enable Americans to decide whether NAFTA was the "best agreement that could have been reached for the environment."

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