Business, Labor Eye Dem’s Bipartisan Bid

By Nathan Guttman

Published January 26, 2007, issue of January 26, 2007.
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Washington - While President Bush was preparing this week’s State of the Union address, with its emphasis on reaching out to Democrats through small-bore domestic measures, one of the most liberal Democrats in Congress was moving forward with a far more ambitious version of bipartisanship: a “grand bargain” between business and labor to endorse each other’s legislative goals.

Massachusetts Rep. Barney Frank, who took over this month as chairman of the House Financial Services Committee, is offering Republicans and the business community a series of tradeoffs that would let the GOP pass some of its favorite measures, including fast-track approval of new trade pacts and easing of foreign investment rules. In return, business would give its backing to Democratic goals such as expanded government health care and eased rules for union organizing.

The overall aim, Frank said, is to maintain American competitiveness in global markets while narrowing the growing gap between rich and poor in this country. “What we need is tikkun olam for globalization,” Frank said. “And that’s what I want to do.”

The plan, first unveiled by Frank in a January 3 National Press Club speech, has not been adopted formally by the congressional Democratic leadership, but it has the support of several key committee chairs in both houses of Congress. No less important, it has been greeted with guarded sympathy by some key players outside Congress, including the United States Chamber of Commerce and several powerful union heads. Cautiously positive reviews have come from several pro-business journals, as well, including Forbes and The Weekly Standard.

“I applaud the issues that the congressman has raised and the relationship between them,” said Tom Donohue, U.S. Chamber of Commerce president and CEO, in a Bloomberg News interview after Frank’s speech. The chamber is the nation’s largest business group. “I’m sure on some of them we are going to have differences of opinion, but on the issues that are fundamental to the American economy and our global competitiveness, I think we are going to have the ability to find some common ground,” Donohue said.

Labor leaders questioned on the plan were similarly open. “We won’t mind meeting the financial community halfway,” said Bruce Raynor, president of Unite-Here, the union representing garment and textile workers, who have been among those hardest hit by globalized trade. “That’s what’s good about Congressman Frank’s idea. It just needs to be fine-tuned to address labor’s concerns.”

Andrew Stern, head of the powerful Service Employees International Union, also has expressed qualified support.

Frank told the Forward he is not offering a “one on one” deal requiring tit-for-tat tradeoffs between liberal and conservative demands. Rather, he said, he is seeking a general agreement from both sides on the need for compromise to ease the “gridlock” in Washington on economic issues.

Nonetheless, many observers see the plan very much in tit-for-tat terms. In particular, Democratic acceptance of fast-track trade approval — allowing the president to negotiate new trade pacts with minimal congressional interference — is expected to depend on the insertion of labor and environmental standards into new pacts before they are sent to Congress. Business has hotly opposed such standards in the past.

Similarly, some observers believe that business backing for the Democrats’ favorite labor-law reform, the so-called Employee Free Choice Act, which allows unions to win recognition through so-called card-checks, will be tied to Democratic support for business-backed immigration reforms.

In an early sign of the uphill battle that Frank faces, even those who rushed to praise his initiative have begun to rule out the necessary concessions. A spokesman for the Chamber of Commerce called the employee-choice bill a “poison pill” for the business community. And Raynor, the textile union chief, said he was “not interested in giving this administration fast-track authority on trade. We opposed trade agreements during Democratic administrations, too, but we totally oppose giving this authority to Bush. His conduct on trade agreements is worse than his conduct on Iraq.”

Frank’s expectation is that each side will see enough advantage in the bargain to yield even on such painful issues. The bargain is a complex mix of carefully calibrated offers meant to entice each side to the table.

On the business side, the plan targets three major concerns. The first is approval of fast-track trade authority, which lets the president submit new trade pacts for quick congressional approval with no amendments and minimal debate. Fast-track authority is up for renewal this year, and is seen as a significant bargaining chip for Democrats and unions. The second item is new rules for easing foreign investments, which have been under intense scrutiny since last year’s failed attempt by the administration to allow a Dubai firm to take charge of several American ports.

The third issue is immigration reform, a priority for business dependent on low-wage immigrant workers.

“I’m not an isolationist. Immigration, trade and foreign investments are good things when they are done properly,” Frank told the Forward.

On the labor side, Frank’s proposal offers progress toward several longtime goals that have been blocked by Republicans in Congress and by the administration. One is the employee choice act, a top Democratic priority this year that Republicans hotly oppose. Another is movement toward universal single-payer health care through expansion of the federal Medicare program. A third is insertion of provisions into future trade agreements ensuring that America’s trading partners adhere to fair wage and environmental standards. At present, trade pacts impose standards of contract enforcement and financial transparency, but do not address labor or environmental rules.

Democrats and labor advocates hope that Frank’s plan will help them to enlist business support for their goals, as a way to reduce the likelihood of a Bush veto.

“From their standpoint, they have to think if it is better for them to sit around the table and negotiate or to stand outside picketing,” said economist Jared Bernstein of the Economic Policy Institute, a Washington think tank with ties to organized labor.

But Avi Lyon, director of the Jewish Labor Committee, warned that since “the deck is stacked against labor on all issues,” unions need to make sure they get the right price for approving trade agreements. The minimum, according to Lyon, should be approval of the employee choice measure, without which he believes it will be difficult for the unions to halt their slide as a force in economic debates.

Unions today represent a bare 12.5% of the nation’s work force, including less than 8% of private sector workers, according to 2005 Census Bureau statistics. The figures were 33% in 1955 and 25% in 1973, and many critics see the decline bringing the unions near the point of irrelevance.

“We have to recognize the practical political situation,” Frank said. “There is no sense in pretending we can do it unilaterally. We are not living in Sweden.”






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