Soviet-type economy

'Like a Soviet-type economy': GOP free traders unload on Trump

The president's $12 billion farm bailout gets an ugly reception among many Republicans in Congress.

By BURGESS EVERETT

President Donald Trump’s bailout for the ag industry is driving his many Republican trade critics to exasperation.

Pro-free trade Republicans were already furious with Trump's escalation of tariffs against U.S. allies and China — a multi-front trade war they say is hurting U.S. farmers and manufacturers. But the administration’s response Tuesday — announcing plans to send $12 billion to farmers hurt by retaliatory tariffs to ease the pain — is the opposite of conservative, free-trade orthodoxy, they said.

“This is becoming more and more like a Soviet type of economy here: Commissars deciding who’s going to be granted waivers, commissars in the administration figuring out how they’re going to sprinkle around benefits,” said Sen. Ron Johnson (R-Wis.). “I’m very exasperated. This is serious.”

“Taxpayers are going to be asked to initial checks to farmers in lieu of having a trade policy that actually opens and expands more markets. There isn’t anything about this that anybody should like,” said Sen. John Thune of South Dakota, the No. 3 GOP leader. He suggested the new spending might need to be offset by cuts in other funding areas.

Trump’s move on Tuesday highlighted what’s become the largest and most painful divide between his presidency and the congressional GOP: his protectionist trade policies. And a number of senators have been itching to tie the president’s hands from making unilateral tariff policy with legislation that would require Congress to approve of unilateral tariffs that are imposed with the justification of national security.

That proposal doesn’t yet have enough GOP support to pass the Senate, and it appears Trump’s bailouts to farm country are intended to tamp down GOP criticism of Trump’s trade policies. But the president’s move had the opposite effect, enraging his harshest critics and worrying farm-state senators like Thune.

Sen. Ben Sasse (R-Neb.) said Trump is giving farmers “golden crutches,” while Sen. Pat Toomey (R-Pa.) said “this bailout compounds bad policy with more bad policy.” Toomey and GOP Sens. Jeff Flake of Arizona and Bob Corker of Tennessee said their legislation to tie the president’s hands on tariffs should pick up new steam now that the Trump administration is distorting the market.

“This is what we feared all along, that these markets would be replaced by handouts,” Flake said. “You lose some of these markets, you lose them for good or a long time.”

“You put people in the poorhouse and provide them aid. What you need to do is not put them in the poorhouse,” Corker said. "They put in place a policy that requires farmers to go on welfare."

After Senate Republicans met privately on Tuesday, Corker fumed over the lack of response to the president's trade polices from the Republican Congress. "It's hard to believe there's not an outright revolt in Congress," he said.

The frustration was shared by House Republicans. Rep. Dave Reichert of Washington, who chairs a subcommittee on trade, said the policy might be helpful to farmers in the short term but that it does little to preserve market access lost due to tariffs.

“Some in the ag community, they say, ‘That’s great, thank you for the help’ — except that the problem then becomes we’ve lost the market, so how do we get the market back?” he said. “That’s the question.”

But while Congress’ free traders are miffed, Trump’s move could help with the people who made him president. Republicans are unlikely to do anything to block the aid payments, and Trump doesn't need Congress to go along with the payments.

Trump's payments to farmers amount to an acknowledgment that his tariffs are hurting the economy, aiding Senate Democrats' fighting for reelection in rural states where Trump is popular. Sen. Heidi Heitkamp (D-N.D.) touted a bill on Tuesday afternoon that would make farmers hurt by tariffs eligible for Trade Adjustment Assistance.

GOP leaders are worried that trade wars could stunt economic gains and cost them Senate and House seats. But though Senate Majority Leader Mitch McConnell (R-Ky.) has criticized Trump's tariffs and retaliations that targeted industries in Kentucky, he said Tuesday he would have to study Trump's decision to bail out out farmers before commenting further.

Senate Agriculture Committee Chairman Pat Roberts (R-Kan.) was unenthused with the bailout because he worries such payments could become permanent, but he said farmers who supported Trump are likely to welcome the aid given the dire straits in the heartland.

“It’s obvious that in farm country there’s a lot of concern. And those were the folks that brought the president home,” Roberts said.

Senate Finance Chairman Orrin Hatch (R-Utah), who is weighing action against Trump's tariffs, said he doesn't have a "problem" with the ag subsidies to farmers but said they would be unnecessary if Trump hadn't made the "mistake" of imposing tariffs against allies.

Whether Trump’s actions on Tuesday will truly turn the tide for Republican free-traders to take back some of Congress’ authority likely depends on how farm-state Republicans react to the president’s initiative. Republican senators such as Joni Ernst of Iowa, for example, have said they are willing to give the president some leeway but worry about how much longer farmers can hold out; Trump's new payment plan could help them weather the rest of the year and get the GOP through the election.

While most in the GOP say farmers want to sell their products, not receive handouts, Trump’s most loyal supporters still say they are willing to give the president room to renegotiate NAFTA and clinch new trade deals with China before turning on his trade policy.

“The economy seems to be doing well. I think the concern is third quarter and beyond. My hope is we’ll start to see some of these issues off of the table, like NAFTA,” said Senate Majority Whip John Cornyn (R-Texas). “It would be good to not add more uncertainty and reduce the uncertainty by taking care of some of these trade disputes.”