CITAC Opposes Special Bail-Outs For the Steel Industry that Are Paid For by Steel-Consuming Industries
CITAC supports a strong, competitive U.S. steel industry; however, most of the proposals under consideration to achieve this goal would come at the expense of steel-consumers. CITAC opposes those proposals. They include demands for import restrictions (tariffs and quotas) and a steel sales tax to pay for legacy cost relief.
The most onerous of these proposals now before Congress is "The Steel Revitalization Act of 2001" (H.R. 808 and S. 957). Steel industry supporters in the Senate are pressing for more co-sponsors for S. 957, while supporters in the House are looking for signatures on a discharge petition (H. Res. 304) that significantly amends H.R. 808 (it features the sales tax only) and would bring it immediately to the floor of the House.
CITAC believes the Steel Revitalization Act (SRA) would have serious negative impacts on steel-consuming industries and their workers. In particular, it would:
- Cost as many as nine times more jobs than it would preserve. The SRA would protect no more than 3,700 steel jobs, compared to losses in steel-consuming sectors of the American economy ranging from 19,000 to 32,000 jobs.
- Tax consumers $1.35 billion to $2.89 billion a year, and cost as much as $732,000 per job protected in the steel industry. Over the five-year term of the SRA, consumers generally would be socked with an effective tax bill totaling $6.75 billion to $14.5 billion.
The stripped-down version of H.R. 808 (sales tax only) would be costly to both steel consumers and steel workers. CITAC's analysis shows that the sales tax proposal alone would result in 2,819 to 18,758 lost jobs in steel-consuming sectors, and even 348 to 431 lost jobs in the steel industry!
CITAC strongly urges Members of Congress to carefully consider the likely impacts of proposed steel policy on all segments of the economy, and to avoid supporting measures that will cost jobs and tax consumers. Specifically, CITAC asks Members not to co-sponsor S. 957 and not to sign H. Res. 304).
H.R. 808, "The Steel Revitalization Act of 2001"
- Introduced March 1, 2001 by Rep. Peter Visclosky (D-IN).
- Has 226 co-sponsors.
- Limits finished steel product imports for five years through quotas, tariffs and voluntary export restraint agreements to their average shares of the U.S. market from June 1994 through July 1997.
- Imposes a 1.5 percent tax on the value of steel sold by manufacturers, producers or importers. The tax would fund a "Steelworker Retiree Healthcare Trust Fund" that would cover the billions of dollars in steelworker legacy costs.
- Expands the current steel loan guarantee program to $10 billion and extends it to 2015.
- Allows anyone who acquires a steel mill to apply for up to $100 million in grants from the Commerce Department to defray the costs of bringing the company into compliance with environmental laws.
H. Res. 304
- Introduced by Rep. Dennis Kucinich (D-OH) on December 5, 2001.
- Has the signatures of 122 Members out of the 218 needed to discharge H.R. 808.
- Calls for immediate consideration of H.R. 808 by bypassing the House Ways and Means Committee and bringing it to the House floor and forcing a vote.
- Amends H.R. 808 to remove all provisions except the 1.5 percent tax to cover steelworker legacy costs remains.
- Limits debate on the bill to three hours and allows consideration of no more than two amendments.
S. 957, "The Steel Revitalization Act of 2001"
- Introduced by Senator Paul Wellstone (D-MN) on May 24, 2001.
- Has six co-sponsors.
- Is substantively identical to H.R. 808.