American voters, fed up with an economy that seems to be stagnant, directed their ire at Democrats and voted to change direction Tuesday, sweeping Republicans into power in the House and narrowing the Democratic majority in the House. But, that is likely to do more harm than good to the economy.
Beyond extending budget-busting tax cuts for the richest Americans, both repealing health care reform and Wall Street reform and opposing a raise in the national debt ceiling, Republicans are likely to have more free trade at the top of their agenda.
On trade, Republicans are likely to press for passage of stalled trade pacts with South Korea, Columbia and Panama. Legislators may also have to vote on Russia's ascension into the World Trade Organization next year. And Congressional hearings in the House on trade issues such as currency manipulation and China's other illegal trade-distorting practices are likely to grind to a halt.
"Under a Republican House leadership, if the president is serious about moving forward on trade, he will have a serious partner on Capitol Hill," Texas Republican Kevin Brady, the likely chairman of the trade subcommittee of the House Ways and Means Committee, said recently, according to Bloomberg News. "We believe the three agreements are critical."
The newly elected House and Senate members may also get a chance to vote on the proposed Trans-Pacific Partnership, which is shaping up to the be the largest free trade agreement involving the U.S. since the North American Free Trade Agreement.
But if Republicans wish to retain their House majority in two years, it may be wise to avoid trade issues, given their track record in America. Those agreements have put American workers in direct competition with workers from the Third World, working for a fraction of the wages paid in America. The result has been the loss of millions of jobs, especially in the manufacturing sector.
If Republicans do push forward on those trade pacts, the American public could revolt against them at the ballot box next time around.
"There's a lot of support for fairer trade policies but there's also a lot of skepticism over the type of free trade policies we've been pursuing over the past few decades," Todd Tucker, research director of advocacy group Public Citizen's Global Trade Watch, told Channel NewsAsia.
The trade policies Republicans are pursuing, unfortunately, are exactly of the same sort that Americans have grown to loathe. Independent analysis of the agreements have found that all the ftas will cost American jobs and add to the trade deficit.
The economic damage may be done in ways other than trade, too, though. Many Republicans have publicly spoken out against raising the national debt ceiling. By early next year, that will likely need to be done. If it is not, the results could be catastrophic. A government shut down, entering default on the national debt and increases in the long-term debt would all occur as a result.
"We're not going to compromise on creating more debt," Republican National Committee Chairman Michael Steele said during an interview on CNN.
Another top Republican priority is extending the Bush tax cuts for the wealthiest of Americans. That would cost the Treasury $830 billion over a 10-year period.
Of course, with divided government, the result may end up being gridlock, which might actually be preferable economically given the alternative.
rest at http://www.economyincrisis.org/content/job-killing-trade-pacts-likely-be-top-republicans-agenda
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