Trade Bills Hit Hurdles in Offset Payments, Says Ryan
The House and Senate are likely to go to legislative conference over the trade preference packages due to a dispute over the payment mechanisms in the bills, said House Ways and Means Chairman Paul Ryan, R-Wis., to reporters on June 4. A conference means lawmakers in both chambers will have to vote again on a compromise bill once differences are reconciled. The Senate passed its version of the bill in late May, but the House hasn’t yet acted. House Republican leadership is aiming for a vote this month.
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Brokers and importers recently urged the House to pass the Senate legislation in order to give President Barack Obama a preferences bill as quickly as possible (see 1506040007). Ryan said he expects a quick conference. The bills include renewals for the Generalized System of Preferences, the African Growth and Opportunity Act and two Haiti tariff preference level programs.
House lawmakers will jump behind the additional tariff cuts in the Senate bill, he said, calling those programs non-controversial. The Senate tacked on the GSP Update Act, the Affordable Footwear Act and a performance outerwear measure to its version of the preference package, HR-1295 (here). The Senate bill also includes far more payment mechanisms than its House counterpart. “There have been some scoring issues with respect to the pay-fors which we have to fix,” said Ryan. Both the House and Senate versions include extensions for a wide range of customs user fees under 19 USC 58c for just over nine months, from September 2024 to July 2025. The two bills also extend a U.S.-South Korea free trade agreement merchandise processing fee from 2021 to 2015.
Ryan didn’t elaborate on how he expects lawmakers to reconcile the differences between the House and Senate bills in conference, and committee officials didn’t respond for comment on the details of the additional Senate payment mechanisms. Pay-for mechanisms are designed to make up for revenue lost to the duty cuts in the preference packages.
Lawmakers are angling to avoid a conference on Trade Promotion Authority and Trade Adjustment Assistance, but the two sides may have to come together to develop a different payment scheme for TAA, said Ryan. “We haven’t set a course of action on that,” he said. House Minority Leader Nancy Pelosi, D-Calif., criticized earlier in the day the payment method in the Senate bill, which involves a Medicare offset (see 1506040018). Ryan said he’s open to changes but he declined to comment on how that could be accomplished. Despite the moving parts, TPA is still a “June project,” he said.
Meanwhile, Customs Reauthorization is headed for conference, and the House will back the human trafficking compromise negotiated in the Senate, said Ryan. As it stands now, the trafficking language in the Senate-passed TPA bill would bar the use of TPA legislative mechanisms for implementing a deal with Malaysia, which is one of twelve parties to Trans-Pacific Partnership talks. The compromise measure will be targeted for inclusion in the customs bill in a way that supersedes the TPA language, Ryan confirmed. That strategy surfaced in recent days (see 1505260037).
Ryan declined to also comment on potential compromises in the customs conference, particularly between the House's PROTECT Act and the Senate's ENFORCE Act, but said lawmakers are committed to sending Obama Customs Reauthorization. “We both want to get to the same objective, which is better enforcement of our trade laws and better enforcement of those who try to evade our trade laws,” said Ryan. “Now we’re just going to debate about the method. We all know each other. We’ve negotiated a lot of things. I don’t see a big problem with getting to a good agreement.” Ryan, along with his trade partners in the Senate, pledged to finish off customs conference and pass a compromise bill by the end of June (see 1505190011).