Overview and Program Rationale
Reduced barriers to international trade are widely acknowledged to offer net benefits by expanding market access but may adversely affect domestic industries and workers that face increased competition. Trade Adjustment Assistance for Workers (TAA) is designed to help trade-affected workers adjust to job loss resulting from increased foreign competition. The primary benefits under TAA are funding for retraining and weekly income support payments while affected workers are enrolled in training.
Trade Adjustment Assistance Reauthorization Act of 2015
In June 2015, Congress enacted the Trade Adjustment Assistance Reauthorization Act of 2015 (TAARA; Title IV of P.L. 114-27). This law established a set of TAA eligibility and benefit provisions that are currently in effect and set to remain in place through June 30, 2021. TAARA further established sunset provisions that will take effect July 1, 2021. At that time, the program will revert to a more restrictive set of eligibility and benefit provisions for new program participants.
This product focuses on the TAA program under current law and touches on some major aspects of the sunset provisions. For a more detailed discussion of the sunset provisions, see CRS Report R44153, Trade Adjustment Assistance for Workers and the TAA Reauthorization Act of 2015.
Program Administration
TAA is administered jointly by the U.S. Department of Labor (DOL) and cooperating state agencies. DOL is responsible for investigating group petitions to establish program eligibility. State agencies are responsible for administering federally-funded benefits to eligible workers.
Funding and FY2021 Appropriations
Appropriations for TAA in FY2021 were $633.6 million. TAA is nonexempt mandatory (direct) spending, which means it is subject to sequestration under the Budget Control Act. In FY2021, sequestration for nonexempt, nondefense spending was 5.7%, meaning that the post-sequestration funding level was about $597.5 million.
Eligibility and Group Application Process
To be eligible for TAA benefits, an individual worker must be part of a group of TAA-certified workers. To obtain group certification, a group of dislocated workers files a petition with DOL that describes how foreign trade contributed to the workers' job losses. DOL then conducts an investigation to determine if the circumstances of the workers' job losses meet program eligibility criteria. Qualified circumstances of job loss are the following:
If DOL's investigation finds that the cause of the workers' dislocations meets the statutory criteria, the workers' petition is certified. Workers covered by a certified group petition can then pursue individual benefits.
Under the provisions scheduled to take effect July 1, 2021, eligibility will be reduced. Among other changes, eligibility will be limited to production workers. Service workers will no longer be eligible for new certifications.
Training and Reemployment Services
Workers covered by a certified TAA petition are entitled to certain benefits and services to aid them in preparing for and obtaining new employment. As noted above, training and reemployment services are administered through state workforce agencies.
Case management and career services are typically provided by staff at state-run American Job Centers (also known as One-Stop Career Centers). Statute specifies a group of services that all TAA-certified workers shall receive, including a comprehensive skills assessment and the development of an individual plan to identify an employment objective and training to achieve that objective.
Training benefits can be paid directly to a training provider or through a voucher system. Statute establishes a set of conditions under which training shall be approved: there is no suitable employment available for the worker, the training is available at a reasonable cost, the worker is qualified to undertake the training, and there is a reasonable expectation of employment after the completion of the training.
Funding for training and reemployment services is granted from the federal DOL to state agencies using a formula that considers the state's past and anticipated usage of TAA. A portion of funding is withheld from the initial formula distribution and states may apply for these reserve funds.
Under current law, the statutory cap for training and reemployment services is $450 million. Beginning July 1, 2021, the funding structure for these services will change. The cap will be limited to training and reduced to $220 million.
Income Support: Trade Readjustment Allowance (TRA)
TRA is a weekly payment that works in conjunction with unemployment insurance (UI) to provide a TAA-certified worker with income while the worker is enrolled in training. TRA begins the week after a worker exhausts his or her UI. A worker's weekly TRA benefit equals his or her final weekly UI payment. There are three stages of TRA that, when combined with UI, offer a maximum of 130 weeks of benefits.
Wage Insurance for Older Workers: Reemployment Trade Adjustment Assistance (RTAA)
Workers who are age 50 and over can participate in the RTAA program, which provides a wage supplement to qualified workers who obtain new employment at a lower wage. RTAA is a payment equal to 50% of the difference between the worker's wage at his or her TAA-certified job and the wage at the worker's new job. The maximum RTAA benefit is $10,000 or two years of benefits, whichever comes first.
To qualify for RTAA, a worker must either be employed on a full-time basis (as defined by the laws of the state in which the worker is employed) or be employed at least 20 hours per week and be enrolled in a TAA-sponsored training program.
Health Coverage Tax Credit (HCTC)
The HCTC provides a subsidy for qualified health insurance premiums for TAA workers. The HCTC equals 72.5% of qualified health insurance costs. To qualify for the HCTC, the worker must be receiving TRA, UI in lieu of TRA, or RTAA.
Issues for Congress
Equity among dislocated workers. TAA provides a set of benefits and services that, in many cases, are more robust than those available to workers who involuntarily lose their jobs for nontrade reasons. Some opponents of TAA suggest trade-affected workers should not receive special treatment and trade-affected workers should instead utilize the benefits and services that are available to all dislocated workers. Supporters of TAA note that, due to the congressional role in approving trade agreements, trade-based dislocation may have a more direct relationship to congressional action than other forms of job loss, and therefore a specialized program is warranted.
The relationship between TAA and expansionary trade policy. Historically, TAA has been reauthorized and expanded alongside policies that relate to expansionary trade policy. For example, TAARA was enacted in 2015 in conjunction with the Trade Promotion Authority, which granted the President the authority to negotiate trade agreements that would be subject to an "up or down" vote in Congress. Some Members may consider expansionary trade policy more appealing if it is accompanied by TAA legislation.
Other TAA Programs
This product discussed the TAA for Workers program. In addition to the program for workers, statute also authorizes smaller programs that provide assistance to firms and farmers adversely affected by international competition.