Federal Dollars Assisting Displaced Workers Go Largely Unused

The White House has promised to offer legislation to "extend and improve" the Trade Adjustment Assistance program, which includes both health-insurance assistance and wage insurance. Currently, however, elements of the program are going underutilized.

"The Health Coverage Tax Credit, tucked into a 2002 trade bill to win support in Congress, is supposed to cushion the blow to factory workers hurt by imports by paying 65% of the cost of health insurance... More than four years after the program began, just 11% of those potentially eligible for the subsidy are taking it -- or about 28,000 of the roughly 250,000 people the government estimates may qualify in a given year."

"The troubles illustrate the shortcomings of a program pivotal to the debate over free trade and the globalization of business... The problem is that compensation programs often add bureaucracy without helping many people. Even if the health-insurance assistance program were working well, it would aid only a fraction of those who lose their jobs. The Labor Department must certify that workers have lost their jobs to imports from certain countries or to a shift in production there."

"Another struggling program is wage insurance, designed for workers over 50 who lose their jobs because of trade and then take a lower-paying job. The government makes up half the difference in wages, up to $10,000 a year, but it requires that workers prove they don't have 'easily transferable skills.' Some can't do that."

"The issue: Should Washington give up on such programs, or should it expand them and try to make them work better? For the moment, people on both sides on Capitol Hill say President Bush will need to beef up programs for those hurt by imports if he wants congressional backing for new trade legislation."

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