Copyright The Washington Post Company Mar 13, 2004

For months, the Bush administration has been fighting a lawsuit brought by a group of computer programmers whose jobs were outsourced abroad, arguing that they don't qualify for government benefits aimed at people coping with layoffs caused by imports.

But now, in the furor over outsourcing, the administration is showing support for the program, called Trade Adjustment Assistance, that aids workers laid off from companies battered by foreign competition.

President Bush has been talking up the program in speeches this week, and Cabinet officers have been touting the big expansion the program got in 2002 -- even though it was congressional Democrats who insisted on the expansion, over Republican objections. Moreover, U.S. Trade Representative Robert B. Zoellick hinted this week that the administration might back a bill to expand benefits further, to service workers such as engineers, architects and telephone call- center employees, whose job losses to India and other countries have become a major source of voter anxiety.

The administration's new stance is part of a broader effort by the White House to combat Democratic attacks on the trade issue. Bush, Zoellick and other administration officials have started using the term "economic isolationism" to deride Democratic criticism of the administration's free-trade policies. At the same time, to defuse charges that they are insensitive to the Americans who suffer hardships amid the rough-and-tumble of the global marketplace, they are going out of their way to acknowledge the need to give such workers temporary income supplements, retraining and other support - - a point that Democrats have repeatedly stressed in the past as the price that must be paid for open markets.

The lawsuit brought by the computer programmers, however, poses an embarrassing counterpoint to the administration's efforts to show its concern. The case involves more than a dozen software workers from International Business Machines Corp. in New Jersey and Computer Horizons Corp. in Irving, Tex., whose jobs were moved to Canada and other countries over the past couple of years. The workers' efforts to obtain the recently expanded benefits under Trade Adjustment Assistance have been rejected by the Labor Department, which administers the program, on the grounds that they were not in the manufacturing sector -- that is, makers of "articles," as the law requires. The Justice Department is backing Labor's position in the case, which is before the Court of International Trade in New York.

Seizing on that case and others like it, Democrats are accusing the White House and Republican lawmakers of having deprived such workers of the chance for extra unemployment insurance and wage and retraining subsidies that laid-off manufacturing workers can get.

"Despite the obvious benefits of [Trade Adjustment Assistance], the administration fought tooth and nail against every penny, and against every provision" to expand the program in 2002, Sen. Max Baucus (D-Mont.) said in a speech last week. Baucus, the ranking Democrat on the Senate Finance Committee, spearheaded the effort to obtain a tripling in funding for the program, to $1.3 billion, in exchange for Democratic backing for a trade bill the White House wanted. He noted in his speech that although he fought to extend eligibility to service workers, "that provision was struck in the final version of the bill," adding, "As we read about service jobs moving overseas, we can see now that was a mistake."

The Labor Department could use its discretion under the law to give benefits to the computer programmers, according to Howard Rosen, a former congressional aide who helped draft the 2002 legislation. The problem, he said, is that the department is "nickeling and diming," a policy he warned would boomerang on the administration by undermining support for free trade.

But Mason Bishop, the deputy assistant labor secretary for employment and training, maintained that the department's implementation of the program simply reflects what Congress mandated. Although benefits can go to a computer programmer, or a cafeteria worker, who is laid off from a firm making an "article" affected by increases in imports or a shift in production to other countries, workers not employed by such firms are not eligible, according to Bishop. "The statute is very clear," he said.

Whatever the current law prescribes, the political environment is forcing the administration to consider a new Baucus bill that has obtained 24 Senate sponsors, along with similar legislation in the House, extending the program to service workers.

"I think that's something that we should examine very closely," Zoellick said Tuesday in response to a question from Baucus at a hearing about whether the White House would back the bill. "Now, frankly, one needs to look at the cost aspects of this as well. But my personal view is . . . one way or another this program or others - - you've got to help people adjust if you're going to require change."

Asked about the bill, a White House spokeswoman, Claire Buchan, said: "That's something that's being looked at."