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House Democrats just derailed Obama's trade agenda

President Barack Obama and House Speaker John Boehner (R-OH).
President Barack Obama and House Speaker John Boehner (R-OH).
SAUL LOEB/AFP/Getty Images

The House of Representatives just voted down a crucial piece of President Obama's trade agenda in a 302-126 vote. The vote is bad news for the Trans Pacific-Partnership, the controversial trade deal Obama is currently negotiating.

The House rejected a bill that would have extended funding for trade adjustment assistance programs, which help workers who have lost their jobs due to foreign competition find new work. The program is traditionally supported by Democrats, but Democrats voted no because they knew passing it would advance the TPP, which most Democrats opposed.

Another piece of Obama's trade agenda passed in a second vote, 219-211, with mostly Republican support. But the lack of TAA makes the House trade package different from the one in the Senate. The house is expected to hold another vote on TAA next week, but after today's lopsided vote it won't be easy for President Obama and Republican leaders to round up the support they need.

The result signals a damaging vote of no confidence in Obama's trade agenda from members of his own party. It will weaken the president's bargaining position overseas as he wraps up negotiation over the TPP.

The House was trying to pass Senate legislation in two parts

The Senate passed trade legislation last month that does two big things. First, it grants Obama Trade Promotion Authority (TPA), which guarantees that any trade deals he negotiates get a prompt up-or-down vote in Congress. The White House has said this tool, also known as "fast track," is essential for getting his Trans-Pacific Partnership negotiated. That's because America's trading partners will be more willing to put their best offers on the table if they know TPP has a good chance of approval in Congress.

The Senate bill also included an extension of trade adjustment assistance (TAA). This is a package of subsidies that help workers who have been displaced by trade. Freer trade is good for the US economy as a whole, but it can hurt some workers in particular industries. TAA programs try to cushion the blow by offering these workers financial support, training, relocation assistance, and other help in learning new skills and finding a new job.

Most Democrats like TAA but are skeptical of TPA. Most Republicans like TPA but are skeptical of TAA. So Speaker John Boehner (R-OH) decided to hold two separate votes. First he held a vote on TAA, counting on House Democrats — with aggressive lobbying from President Obama — to get it over the finish line. Then he planned to hold a second vote on TPA, relying on Republican votes to pass it.

But House Democrats clearly understood that a vote for TAA was really a vote for TPA and, therefore, a vote for the Trans-Pacific Partnership. And most Democrats oppose the TPP, so they voted against TAA.

The vote is a huge setback for Obama's trade agenda

President Obama and his Republican allies aren't giving up. They held a vote on TPA right after the failure of TAA, passing it by a vote of 219-211. And the House is expected to hold another vote on TAA next week. If that fails, then Obama might try to pass the House bill — without TAA — through the Senate.

And Obama will probably press forward with negotiations without fast-track authority, hoping he can convince Congress to support the deal when it's finished.

But both of these strategies are going to be challenging.

Trade adjustment assistance was crucial to getting enough support from Senate Democrats to overcome an expected filibuster. The legislation passed with 62 votes, just two more than was needed. Passing the package without TAA will be even more challenging.

And passing TAA through the House will also be difficult. The president has lobbied heavily to garner support for the TAA bill, yet it still fell dozens of votes short.

Meanwhile, Obama's trade struggles in Congress will weaken his bargaining position abroad. The leaders of other TPP countries such as Japan, Australia, and Chile will have to make politically costly concessions in order to conclude the TPP negotiations. They're only going to be willing to do that if they think there's a good chance the deal will actually be ratified.

Today's failed TAA vote is a clear signal that congressional Democrats are staunchly opposed to the TPP, and that Congress as a whole is skeptical of Obama's trade agenda. That means the negotiations are more likely to break down, as countries become less willing to make politically costly concessions for a deal that might never take effect anyway.

Also, President Obama is running out of time. Even under the "fast-track" process, it takes several months after a deal is ratified for Congress to approve it. With only 19 months left in Obama's presidency, that doesn't give the administration much margin for error. And if Congress doesn't approve trade legislation this year, the political pressures of an election year will make it even more difficult to get Congress to act in 2016.