For months, President Obama has been accused of hiding from the public and members of Congress crucial details of the Pacific Rim trade deal he’s seeking. But now evidence has emerged that the administration is suppressing information that’s at least as important – on how previous trade agreements and policies have performed for the economies of America’s individual states.
Much of politics is local, as the late Congressional Democratic leader Tip O’Neill used to say. That’s why lawmakers evaluating Obama’s trade agenda, plus his request for fast track negotiating authority, have prized information on trade’s impact on the states they represent. As a result, state-level data has dominated the trade-related economic materials distributed by the administration and its business allies.
{mosads}Most prominently, earlier this year the Commerce Department issued with great fanfare a report showing that 26 states achieved record exports in 2014, and that eight more generated increased overseas sales last year. According to Secretary Penny Pritzker, “Exports are critical to economic growth and job creation in communities across the country.,” As a result, she emphasized, “Now is the time for Congress to pass bipartisan trade promotion legislation, so we can enact new trade agreements with high standards that uphold our values and protect our national security.”
Commerce understands that trade flows consist of imports as well as exports. Thus since 2010, the agency has been tracking both for every individual state, in addition to keeping economy-wide two-way trade data. Yet in stark contrast to the export information, the import data is buried deep inside the department’s website. And the reason seems obvious: With the United States as a whole running massive trade deficits, most of the states have long imported more they export, too. In 2014, 37 states fell into this category. The U.S. Business and Industry Council has presented the results for the current economic recovery at this new website.
Even worse, a more detailed analysis reveals that, as with the national economy, the trade balances of most states (34 specifically) have deteriorated since the recession ended in 2009. And whenever trade deficits increase or trade surpluses decrease, economic growth and job creation slow down – damage the feebly recovering American economy can ill afford.
As a result, the data kept under wraps by Commerce makes the trade positions taken by many of the president’s most prominent Congressional supporters difficult at best to explain to constituents.
For example, one of Congress’ leading champions of the Pacific Rim-wide Trans-Pacific Partnership (TPP) and new fast track negotiating authority for the president is Senate Majority Leader Mitch McConnell (R-Ky.) – who has staunchly opposed Obama on most other issues. But McConnell has picked a strange front for cooperation. Since the current U.S. recovery began, his state of Kentucky saw its trade deficit rise from $7.70 billion to $11.63 billion, meaning that its trade flows have held its economy back.
Sen. Orrin Hatch, Republican of Utah, has worked hard on behalf of the Obama trade agenda, too. This matters because the Finance Committee he chairs takes the trade policy lead for the Senate. His state ran a $1.16 billion trade surplus in 2014. But that’s down from $3.77 billion in 2009, meaning that trade has undermined Utah’s economy, too, during the recovery.
Hatch’s Democratic counterpart on the Finance Committee, Sen. Ron Wyden of Oregon, has a better case for backing new trade agreements and authority. His state is one of the few has enjoyed a trade surplus that’s increased during the recovery – from $2.96 billion to $7.11 billion – and so production and hiring have gained. Ditto for Democrats like Wyden’s Finance colleague Sen. Maria Cantwell of Washington State, and Democratic Sens. Tom Carper and Chris Coon from Delaware, whose trade deficit has shrunk since 2009.
But Democratic voters from California, Colorado, Florida, Missouri, New Hampshire, and Virginia arguably have not been so well represented. Their senators — Dianne Feinstein (D-Calif.), Michael Bennet (D-Colo.), Bill Nelson (D-Fla.), Claire McCaskill (D-Mo.), Jean Shaneen (D-N.H.), Tim Kaine (D-Va.) and Mark Warner (D-Va.) — all just voted to endorse policies that so far have worsened their states’ trade balances, and therefore hamstrung their recoveries. Still, of the 31 Democratic senators who opposed the bill to launch a debate on fast track, 26 voted consistently with the trade interests of their states, which have seen worsening balances during the recovery.
Yet of the 52 Republicans who favored the fast track debate bill, only 19 can accurately say that they voted to strengthen their states’ economies. Those who voted for it so far even though their states’ trade balances have worsened and slowed growth include presidential hopefuls Marco Rubio of Florida, Lindsey Graham of South Carolina, and Rand Paul of Kentucky. Almost adding insult to injury, voters in ten states have awarded Republicans both their Senate seats – Alabama, Arkansas, Arizona, Georgia, Idaho, Kentucky, North Carolina, Oklahoma, South Carolina, Tennessee, and Utah. In return, they’ve received 20 trade votes that have undermined their recoveries.
The trade figures not publicized by Commerce could create such problems in the House, too. Republican Speaker John Boehner (R-Ohio) has challenged President Obama on many fronts. Yet he’s chosen cooperation to push a trade strategy that has helped more than double Ohio’s deficit since the recession ended, from $8.81 billion to $17.98 billion. Also puzzling is the fast track enthusiasm of Paul Ryan (Wis.), Republican chair of the Ways and Means Committee that holds chief trade policy responsibility in the House. Trade flows have actually worsened Wisconsin’s recovery growth slightly.
House Republican Whip Steve Scalise (La.) and Republican conference chair Cathy McMorris Rodgers (Wash.) represent states with improving trade balances. So their support for fast track makes economic sense. Not so Majority Leader Kevin McCarthy (R), with California’s recovery-era trade deficit jumping by more than 52 percent, or Republican Policy Committee Chairman Luke Messer (R), given the more than quintupling of Indiana’s trade shortfall.
The president recently has urged trade policy critics to “look at the facts” before condemning his trade initiatives. Whether they serve in Congress or not, they’d have a much easier time if his administration would publicize more of them.
Tonelson is the author of “The Race to the Bottom” and founder of the public policy blog RealityChek.