Steel: Legislative and Oversight Issues

Publication Date: July 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Manufacturing and industry

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Abstract:

The U.S. steel industry has faced increasing difficulties since the late 1990s. More than 30 U.S. steel producers have gone into bankruptcy and many workers have lost their jobs. Many retirees have lost company-funded health care benefits, while their pensions are being taken over by the federally chartered Pension Benefit Guaranty Corporation. The condition of the industry is discussed in detail in CRS Report RL31748, The American Steel Industry: A Changing Profile.

U.S. policymakers responded with a variety of measures. The House of Representatives in 1999 approved a bill that would have required the President to roll back imports, and the Clinton Administration reacted with a more aggressive steel policy. The 106th Congress approved and President Clinton signed laws to establish a steel loan guarantee program (P.L. 106-51), and to distribute to petitioners duties collected from AD/CVD cases, (known as the Byrd Amendment to the Agriculture appropriations bill, P.L. 106-387). These measures did not prevent a new downturn in the domestic steel industry. Moreover, the World Trade Organization (WTO) has found that the Byrd Amendment violates its rules; S. 1299 has been introduced to repeal this law, and to distribute AD/CV duties instead to a new program for communities negatively impacted by trade. The Bush Administration in its FY2004 budget request proposed elimination of both programs, but both continue to operate. The Steel Loan Guarantee program expires this year, though H.R. 2881 has been introduced to extend it through 2005.

President Bush in June 2001 requested that the U.S. International Trade Commission (ITC) undertake a broad Section 201 trade investigation on the steel industry, and on March 5, 2002, imposed three-year safeguard tariffs with top rates of 30% (discussed in detail in CRS Report RL31842, Steel: Section 201 Safeguard Action and International Negotiations). U.S. trading partners are challenging the safeguard tariffs and other U.S. steel policy measures under WTO rules (see CRS Report RL31474, Steel and the WTO). Also, a provision in the 2002 Trade Act (P.L. 107-210) assists retirees not eligible for Medicare, who have lost their health care benefits because of corporate bankruptcies. H.R. 1999 and S. 1018, introduced in the 108th Congress, would broaden eligibility for these benefits and extend to 2010 the steel import licensing and monitoring program established under Section 201. Another bill, H.R. 2365, would change U.S. trade laws to strengthen the position of domestic industry petitioners for relief from imports.

Some Members of Congress, economists and representatives of steel consuming industries believe that the steel safeguard tariffs are damaging the competitiveness of U.S. industry. House Ways and Means Committee Chairman William Thomas on March 18, 2003, requested that the ITC conduct such an investigation under Section 332 of U.S. trade law. This report will be issued together with the ITC's mid-point report on the domestic steel industry, which is required under Section 201.

This CRS report examines recent legislative measures addressing issues in the steel industry in the 108th Congress. It will be updated as events warrant.