WASHINGTON—House Democrats dealt President Barack Obama a major setback in his bid for expanded trade-negotiating powers, roundly rejecting on Friday a workers-aid program that was a key component of the bill and leaving the White House's trade agenda in limbo.
While stinging, the vote was not the last word in the trade fight, as House Speaker John Boehner (R., Ohio) said there would be a re-vote by Tuesday on extending the aid program, which is designed to help workers hurt by international trade.
But Friday's defeat showed the degree to which Mr. Obama's trade agenda is on shaky ground in Congress. The House voted against the workers-aid program by 126-302. To improve those numbers, House Republican leaders, the White House and pro-trade businesses will need to find ways to win over a combination of Democrats who are skeptical of the overall trade push and Republicans leery of supporting the aid package.
It also underscored the waning influence of a second-term president, particularly on an issue many Democrats see as toxic to their re-election prospects, given concerns in their districts that U.S. jobs are being sent overseas.
Mr. Obama, who traveled to Capitol Hill on Friday morning, and to a charity congressional baseball game the night before, made impassioned pleas to members of his party to support "fast track," which gives the president the ability to submit trade deals to Congress for an up-or-down vote without amending it.
Mr. Boehner said after the vote that the onus was on Democrats to devise a way forward.
"Republicans did our part, and we remain committed to free trade because it is critical to creating jobs and growing our economy. I'm pleased that a bipartisan House majority supported trade promotion authority," Mr. Boehner said, referring to a separate vote on fast track on Friday.
Democrats' ability to take down the trade bill was made possible by House Republican leaders' decision to hold two separate votes on the legislation that was passed by the Senate last month. The calculus was that Democratic votes on the first part, the workers-aid program, would compensate for opposition from Republicans. GOP votes for fast track, meanwhile, would offset Democratic opposition there.
Instead, Democrats abandoned the first part in droves, raising questions about whether they would be any more supportive next week. While most of them support the workers-aid measure, they knew its rejection would take down the fast-track bill.
"Its defeat, sad to say, is the only way that we would be able to slow down the fast track," said House Minority Leader Nancy Pelosi (D., Calif.), who ended months of neutrality to side with liberals who voted against the worker-aid program as a way to sink Mr. Obama's trade agenda.
Derailing fast track, even temporarily, further strains the negotiations that the U.S. is trying to wrap up with 11 countries around the Pacific, including Australia, Japan and Vietnam. Discernible progress on the remaining difficult issues in the deal, the Trans-Pacific Partnership, or TPP, has all but halted recently as officials from U.S. trading partners wait for Congress to act on fast-track legislation, which is also known as trade promotion authority.
"Unless this is promptly remedied with an affirmative vote cast soon, it is doubtful that TPP partners will be willing to seriously re-engage," said Daniel Price, former economic adviser to President George W. Bush and managing director at Rock Creek Global Advisers, a consultancy.
The coming days are expected to include a new frenzy of lobbying by both sides, as Mr. Obama and his allies on trade get a second chance. There were signs on Friday of potential horse trades. Mrs. Pelosi said prospects for passage of a fast-track bill would "greatly increase" if bolstered by another Democratic priority, such as a "robust highway bill."
Congress has for years been unable to pass a multiyear highway bill, and a current short-term bill expires at the end of July. The White House and Democrats have long pushed for a multiyear bill, which many see as essential to completing long-term infrastructure projects that will also boost jobs.
Pro-trade House lawmakers also have another key piece of ammunition as they enter weekend negotiations: The House voted 219-211 on the second part of the bill, granting Mr. Obama fast-track authority. It drew the support of 28 Democrats, more than expected. Pro-trade House lawmakers also secured passage of a separate customs and enforcement measure that includes new tools to combat unfair trade practices.
After the vote, Mr. Obama urged the House to act quickly.
"These kinds of agreements make sure that the global economy's rules aren't written by countries like China; they're written by the United States of America," Mr. Obama said in a statement. "And to stand in their way is to do nothing but preserve the long-term status quo for American workers, and make it even harder for them to succeed."
White House spokesman Josh Earnest dismissed the defeat of the worker-aid program as a "procedural snafu," the same words he had used to describe an earlier, temporary defeat in the Senate on the fast-track bill.
But the House has long been more suspicious of trade deals, and the stall in the House represented a more personal blow because Mr. Obama had courted Mrs. Pelosi assiduously, showing up at the congressional baseball game and meeting with her personally on Friday morning before making a rare, last-minute visit to the Capitol to urge Democrats to "play it straight" and vote for the piece of the bill that would extend the workers-aid program.
Mr. Obama has promised that he would support Democrats in the face of expected attacks from labor unions opposed to fast-track legislation. Some Democrats said that was not enough.
"I don't know if it's a matter of just hearing from the president," said Rep. Danny Davis (D., Ill). "I would need to hear from the people in the Seventh Congressional District in Illinois."
Mr. Obama's call to "play it straight" was a bitter pill for House liberals, who thought House leaders had already been devious by establishing the two-step procedure.
As it became clear that House Republican leaders and Mr. Obama had lined up enough support to win passage of the portion of the bill granting fast-track negotiating power, liberals saw only one choice: to vote against the worker-aid portion of the bill even though it helped many of their own constituents, workers who lose jobs as a result of international trade.
"It was not the opponents who came up with this crazy procedure. If they had played it straight, we could play it straight," said Rep. Brad Sherman (D., Calif.). "What's the good of having a little bit of trade-adjustment assistance if we lose millions of jobs because we put them on a fast track to Asia?"
—Isaac Stanley-Becker, Byron Tau and Colleen McCain-Nelson contributed to this article.
Write to Kristina Peterson at kristina.peterson@wsj.com and William Mauldin at william.mauldin@wsj.com
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