Obama faces much bigger trade fight in the House

The U.S. Capitol building
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The U.S. Capitol building

President Barack Obama's push for fast-track trade promotion authority (TPA) cleared a critical hurdle in the Senate this week paving the way for likely final passage there next week.

But the president's push faces a much steeper—and perhaps insurmountable—obstacle in the House, where an odd coalition of tea party Republicans and liberal Democrats could block Obama's efforts.

Right now, as Mike Allen notes in Friday's Politico Playbook, the votes are simply not there to pass TPA in the House. And without TPA, Obama will likely be unable to finish the giant Trans-Pacific Partnership (TPP) that he views as a key piece of his presidential legacy.

Right now, Democrats count fewer than 20 votes for TPA out of their 188-member caucus. There are 245 House Republicans, enough to pass TPA on their own, but a solid block of GOP members will likely vote against the measure, either because they fear its impact on U.S. jobs and wages or they simply don't want to give more authority to a president they despise.

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House GOP leadership will probably need north of 180 votes to get TPA through, and sources told Allen they are nowhere near that number. The White House and its top House ally, Ways and Means Committee Chairman Paul Ryan, have to hope that the trade dynamic will change in a significant way following likely Senate passage of TPA.

It will probably change somewhat, but counting on legislative momentum out of the Senate has not been a winning strategy in recent years. Immigration reform died in the House after clearing the Senate. And the restive House GOP caucus has regularly refused to go along with Senate deals on spending measures, at least at first.

Once TPA gets out of the Senate, major business lobby groups from a wide range of industries will kick into high gear to pressure wavering members on the left and right. But in the age of unlimited spending by super PACs and wealthy individual donors, the power of industry groups to use their money-bundling influence to sway votes is not even close to what it once was. And even a hint that Wall Street is pushing for TPA passage (which it is) would do more harm than good to the lobbying effort.

Meanwhile, big labor unions including the AFL-CIO will as well as progressive pressure groups will keep up a relentless drive to make sure as few Democratic members as possible vote with the president on TPA.

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And then there is the influence of Sen. Elizabeth Warren, D-Mass. The liberal firebrand will probably not be able to stop TPA in the Senate, which has a long tradition of supporting trade deals. But she could exert significant influence on House Democrats who fear her power to mobilize the left on issues she cares about.

In this way she is something of a Democratic analog to Sen. Ted Cruz, R-Texas, on the right but far more potent. Cruz regularly exhorts House Republicans to buck the Senate on fiscal and other matters with decidedly mixed results.

One could easily envision Warren rallying House Democrats to oppose TPA based on her views that it could ultimately lead to watering down Wall Street reform under a future president while exposing U.S. laws to attack by foreign governments in the Investor-State Dispute Settlement process. Warren would not even have to convene secret meetings with House members. She can move votes with just a few choice public comments.

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And Warren's fears of attacks on Wall Street reform got some heavy intellectual cover this week when a Canadian official argued that the Volcker Rule limits on trading by big banks violates the North American Free Trade Agreement. The administration pushed back hard on this argument saying that there is no way Volcker violates NAFTA. And of course one Canadian minister saying something does not make it so.

But the mere invocation of Volcker and a previous trade deal offers a strong talking point to financial reformers in their battle against Obama's trade push.

Meanwhile, Ryan remains confident that once the Senate acts he will be able to round up enough votes to get TPA through the House, setting the stage for completion and passage of TPP. He may be right. But at this point it seems like his confidence is more wishful thinking than vote-counting reality.

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—Ben White is Politico's chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter @morningmoneyben.