Vice President Pence Promotes USMCA in Waukee

Vice President Mike Pence spoke to a crowd of about 550 people at Manning Farms just outside of Waukee last Wednesday (9 October) to promote passage of the United States-Mexico-Canada Agreement, the replacement for the disastrous North American Free Trade Agreement, which took effect in 1994 and was never updated; the new agreement, by contrast, will be reviewed every six years.

The new trade deal was signed in November 2018, but has yet to be acted upon by the House of Representatives.  Sen. Joni Ernst in her remarks noted that more than 300 days had passed since the President signed the agreement.  Pence laid the blame for the delay squarely on Congressional Democrats: “Speaker Nancy Pelosi and the Democrats in Congress refuse to bring it to the floor of the House of Representatives, and that is why I’m here.  I came to Iowa today to turn up the heat.  It’s time for the Democrats in Congress to do their job, put politics aside and pass the USMCA this year.”

Pence highlighted the benefits which the USMCA would bring: a boost of $68 billion in the GDP, the creation of at least 175,000 jobs, and an increase of more than $2 billion in agricultural exports to Canada and Mexico, which already import $6.6 billion worth of goods from our state each year.

The Vice President mentioned Democrat U.S. Representatives Cindy Axne, Abby Finkenauer, and Dave Loebsack by name and called on them to demand that Pelosi bring the trade deal up for a vote.

The Mexican Senate approved the new deal nearly four months ago (19 June); Canada claims that it will hold a vote as soon as the US does, which makes sense from their standpoint:  the new agreement puts American farmers, especially dairy and wheat farmers, in a much better position in the Canadian market, at the expense of Canadian dairy and wheat farmers, who will now face increased competition. Thus Axne, Finkenauer, Loebsack and the remaining House Democrats are actually siding with Canadian farmers over American farmers by refusing to hold a vote on the agreement.

The Vice President joked that no one needed to waste a nickel calling Sen. Ernst or Sen. Grassley, since they were already supporting the agreement, but did not say why he was focusing on the House rather than the Senate, which likewise has not passed the agreement.  The explanation is that it is generally considered necessary for the House to vote first on the ground that the agreement encompasses tariffs, since the Constitution requires that revenue bills originate in the House.

If the House Democrats continue to delay, Mitch McConnell as Majority Leader could bring the agreement to the floor of the Senate for a vote.  The fact is that the requirement for originating revenue bills in the House is routinely violated by the device of taking up a House bill and “substituting” its contents with that of a Senate bill, so that a bill which originated in the House has completely new provisions, including revenue provisions, which originate in the Senate.  The Supreme Court has given its blessing to such subterfuges, and worse, completely ignored that provision itself by upholding Obamacare, since the bill was upheld on the ground that the penalty was a tax, although the version of Obamacare which became law had passed the Senate first (December 2009), the House only later (March 2010).

An adherent of Constitutional government might reason that the Republicans in the Senate should respect the Constitution and wait for the House to vote first, even though the Senate has flouted that provision in the past, and even though the Supreme Court itself (with Scalia, Kennedy, Thomas and Alito dissenting) drove a stake through the heart of it. But it is not clear that the agreement really should be classed as a “revenue bill” of the sort which the Constitution prescribes should begin in the House.  The relevant text in the Constitution (Article I, Section 7) reads very simply:  “All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.”  Did the Founding Fathers have something like the USMCA in mind when they spoke of “bills for raising revenue”?  It is not just the case that most of the trade covered by the agreement is free in the sense of not being subject to duties, but much of the agreement consists of provisions other than taxes:  labor provisions (including average wage of auto workers), environmental provisions, intellectual property protections, etc. The question then is whether any bill, so long as it contains a single revenue provision, becomes thereby a bill “for raising revenue”; common sense would seem to require the answer “no,” just as common sense tells you that the USMCA is a trade bill rather than a tax bill, which aims at regulating commerce rather than raising revenue.

In the end, of course, for the bill to be signed by the President, it must pass the House as well as the Senate, but prior passage in the Senate would increase the pressure on Speaker Pelosi to allow a vote. Although it would be bad for the agricultural economy if Speaker Pelosi continues to refuse to put the agreement to a vote, such a stance would make it easier to defeat Reps. Axne and Finkenauer, who are running for re-election, as well as the Democrat candidate who runs to succeed Rep. Loebsack.