What is Going on with the TPP?

The bill that would grant President Obama trade promotion authority (fast track) is in for markup today.  That refers to the process where the initial bill is modified, re-written and amended before it comes up for a vote.  Although the bipartisan sponsorship is encouraging, passage is still an uphill fight.

The bill that would grant President Obama trade promotion authority (fast track) is in for markup today.  That refers to the process where the initial bill is modified, re-written and amended before it comes up for a vote.  Although the bipartisan sponsorship is encouraging, passage is still an uphill fight.

The White House is lobbying against efforts to modify the bill by including an actionable “currency manipulation clause”.  The Administration is stepping up its efforts to promote the legislation, but appear to be falling shy.  Important Democrat Party constituents, like labor and environmental groups, are opposed to the trade agreement in principle.

In the Senate, of note Henry Reid, the outgoing minority leader, and Elizabeth Warren are leading the opposition.  Of the dozen Democrats on the Senate Finance Committee, less than half support the trade promotion authority bill.  Still passage in the Senate may be easier than in the House of Representatives.

The House is going to be a battle.  A simple majority is needed which is 218 votes.  The key calculus is how many of the 247 Republicans will oppose the measure leadership will support and how many Democrats can Obama secure.

Last year, House Speaker Boehner said that it needs around 50 Democrat votes.  That may be a bit of an exaggeration.  It would imply that 79 Republicans would not support the measure.  Current estimates suggest that the number may be in the 25-50 range.

However, the support from the Democrats in the House is poor.  Some vote-counters see 10-15 Democrats may support the measure.  This can support Republican defections at the lower end of the estimates.  At the same time, the lack of meaningful Democrat support could drain the enthusiasm of the Republican leadership that is in no hurry to give the President what could be one of his few legislative successes before the November 2016 election. 

An important card not played has been Hillary Clinton, the leading presidential candidate.  Yesterday she spoke in generalities, but some heard sympathy for the opposition, without challenging Obama directly.  She said, “Any trade deal has to produce jobs and raise wages and increase prosperity and protect our security.”  This would seem to set a high bar for her support.  In these matters, it is not just support that counts but enthusiastic support.  Ironically, Obama might be able to outflank Hillary Clinton in this regard by getting the Bill Clinton, who helped usher in NAFTA, to make calls to Democrats in the House.

Trans-Pacific Partnership Update is republished with permission from Marc to Market