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November 29, 2006

Adam Smith, New Democrats and free trade

Posted by David Postman at 4:41 PM

The first legislative session I covered in Washington was in 1993. Democrats had just won big the previous November and there were 65 Democrats in the House and 28 in the Senate. Democrat Mike Lowry was governor and Bill Clinton was president.

It was party time for the Democrats. They rewrote state health insurance laws, raised taxes and launched an expansive effort to fight youth violence.

And of course, come 1994 many of those Democrats were defeated. One who survived was state Sen. Adam Smith, a young attorney from Kent. Today he's in Washington, D.C., after an easy re-election to the 9th Congressional District, where he's having some mixed feelings of deja vu.

"I had sort of forgotten how exciting it is to be in the majority," he told me the other day. But he is quick to temper that excitement with some realistic expectations.

"I try to tell people as much as possible, 'It will be better, but this is not everything you have ever dreamed of you will now get.' I really felt that in '93 — that pent up demand was there and when we got in and Lowry got in, every even marginally Democratic supportive group was saying, 'OK, we get everything we want' and then ended up being bitterly disappointed when that didn't happen."

Smith's 10 years in Washington doesn't put him in line for a leadership position in the new Democratic hierarchy. But as a leader in the movement of New Democrats — those who adhere to Clintonomics, free trade and a generally more moderate platform — I expect we'll see Smith's name popping up as House Democrats debate among themselves about policy and ideology.

Already Smith's been mentioned as an example of part a generational split in the House. Writing in the New York Times after the elections, Matt Bai said:

Our elections may become increasingly generational rather than ideological — and not a moment too soon.

This is why the new Democratic majority in Washington may fare no better in addressing the nation's modern preoccupations than the Republican majority that preceded it.

Bai wrote that Democrats were "reluctant to make room for its next generation, a pragmatic and talented group led, perhaps, by Rahm Emanuel, the chief strategist behind the House elections." He also mentioned a group of nine "lesser-known names," including Smith's.

It might be too much to expect the paragons of Democratic politics to look to younger members when the reins of power are once again within their grasp. But the party that controls the next era of American politics may well be the one whose long-serving leaders can eventually summon the wisdom to step out of the way.

Smith said the split comes less with age than the years in which members were elected. He feels more aligned ideologically with others elected in the 1990s. And he says party elders know better than to run the House on a strict adherence to seniority.

"They understand that this is a different Congress than the one they came into. It's not one where the committee chairmen are gods and we all bow down to them. In part, because we watched the Republicans do that top down power thing. They spent about a year and a half condemning that kind of leadership so it makes it harder to adopt that approach."

As for pragmatism, Smith said that to him that means "knowing that there is no one ideology that has the perfect answer for everything" and from learning from experience. He says it does not mean "we have to make sure we don't piss anyone off so we can get re-elected. I reject that completely. That's not what the New Democratic movement is about."

There already is plenty of advice for Democrats if they are searching for an ideological path. That's particularly true on economic issues. As Bloomberg reported recently:

The dispute over trade and budget policies prompted a high- level private meeting earlier this month between AFL-CIO President John Sweeney and former Treasury Secretary Robert Rubin, who is now chairman of the executive committee at New York-based Citigroup Inc.

AFL-CIO leaders, contending Democrats won the midterm elections because of voter concern about job security and stagnant wages, say it's time to set aside the free-trade policies touted by Rubin.

The New York Times reported Sunday that out of those sorts of disputes, economic populists in the party are "emerging and strongly promoting an alternative to Rubinomics."

They want to rethink America's role in the global economy. They would intervene in markets and regulate them much more than the Rubinites would. For a start, they would declare a moratorium on new trade agreements until clauses were included that would, for example, restrict layoffs and protect incomes.

Smith says something needs to be done to "reset the balance of power between corporations and the super-rich and the rest of us." But he will be a strong defender of Clinton's economic legacy:

"There are a lot of people in the progressive community who think Clinton's thinking was the beginning of the downfall. We will have to fight that out. ... I think Clinton and Rubin were right about a hell of a lot more than they were wrong about."

To turn away from that, he said, "would be a very bad thing for the working people of the country." And he's skeptical of "economic populism" if that "means anti-trade, anti-immigration, work against business 100 percent of the time, bash them, regulate them, tax them."

One commentator wrote recently that Democrats should embrace Rubinomics to show they have an economic plan. In the Washington Post, Sebastian Mallaby wrote:

Now that they have won Congress, the Democrats must prove that they are more than the mirror image of their opponents. This means reviving the pro-market centrism of the Clinton era — a spirit that lives on in the form of the Hamilton Project.

(The Hamilton Project was started at the Brookings Institution as what Mallaby described as "a center for Rubinomics in exile.")

Clearly there's a split among Democrats on economics. And one of the places the divide will be seen most clearly is over international trade agreements. From AP:

Many Democrats campaigned against Bush's trade policies in the November congressional elections, saying the administration had failed to do enough to halt the loss of manufacturing jobs to low-wage foreign countries such as China. Since Bush took office in 2001, the country has lost nearly 3 million manufacturing jobs.

The Democratic takeover of the House and Senate has raised speculation that the administration's trade agenda will face serious obstacles in the new Congress.

Smith thinks it'd be a mistake to stop the trade agreements. He says, "amend it, don't end it." That was a phrase that began popping up toward the end of the Clinton presidency, post-Seattle WTO, when Democrats wanted to shore up protections for workers and the environment in international trade agreements.

That's why Smith said he and other Democrats voted against the Central American Free Trade Agreement. It was a message, he said, to the Bush Administration to renegotiate the agreement.

"The CAFTA vote said, 'We're not going to keep doing it the way it's being done.' We have to make a stand at some point. If we're going to force their hand we have to vote against something."

At Sound Politics Eric Earling worries that the CAFTA vote by Smith and others may signal a weakening of support among state Democrats for trade.

The Bush administration knows there "are those in the extremes of both parties ready to preach retreating to protectionism and economic isolationism," but will continue to push for trade liberalization, U.S. Trade Representative Susan Schwab said in a speech today.

She said the administration also hopes to wrap up negotiations by early next year on free trade deals with South Korea and Malaysia and said that talks should be concluded soon with Panama.

She called gaining congressional approval for agreements already completed with Peru and Colombia a high priority.

Smith said that the Colombia and Peru agreements likely will need side agreements on worker and environmental protections to win passage in the Democratic Congress. He said that New York Rep. Charlie Rangel, who will become Ways and Means chairman, is a strong supporter of free trade and that Speaker Nancy Pelosi will give the chairman leeway to win House approval of trade agreements.

Smith said that two other powerful Democrats on Ways and Means, Michigan's Sander Levin and California's Pete Stark, "might be more problematic" on trade. Stark is the second most senior Democrat on Ways and Means. Levin is third, and is in line to be chairman of the Subcommittee on Trade.

Said Smith:

"What I hope we don't do is adopt the Lou Dobbs extreme position, which is every trade policy is horrible unless the other country has to buy everything from us and we don't have to buy anything from them."

Dobbs is the Greek chorus of sorts in the trade debate. The CNN anchor has emerged as a leading spokesman against free trade. And he weighed in today, using his weekly commentary to urge Democrats to halt the administration's trade agenda:

Victorious Democrats will, with the opening of the 110th Congress, have a historic opportunity to right the course of a country that has been hell-bent on permitting free-trade corporatists and faith-based economics to bankrupt the nation.

As the New Year approaches, newly elected Democrats in the House and Senate will be battered by calls, even demands, to stay the course rather than right it. And we can only hope they and their new leadership in both houses will have the courage and character to be rationalists and realists and overcome their partisan political debt to corporate America, and U.S. multinationals in particular.

The pressure is already building on Democrats to signal a trade agenda. And "New Democrats" like Smith, particularly those from trade-dependent states like Washington, will be in the middle of the inevitable intra-party struggle to find a cohesive party message.

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