[Congressional Record Volume 147, Number 68 (Thursday, May 17, 2001)]
[Senate]
[Pages S5122-S5123]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself, Mr. Dayton and Mr. Wellstone):
  S. 910. A bill to provide certain safeguards with respect to the 
domestic steel industry; to the Committee on Finance.
  Mr. ROCKEFELLER. Mr. President, today I introduce the Save the 
American Steel Industry Act of 2001. As you know, the domestic steel 
industry is currently faced with the most devastating crisis in its 
history, one that could lead to its decimation if the Administration 
fails to initiate action under Section 201 of our trade laws. Over two-
thirds of our largest steelmakers have entered bankruptcy since 1997, 
and some analysts predict that almost half of existing U.S. steelmaking 
capacity may be idled by year's end if the President does not take 
immediate and decisive action to provide the industry with desperately 
needed relief. The surge of dumped, subsidized, and disruptive imports 
that was initially triggered by the onset of the Asian financial crisis 
has not abated, but has in fact worsened over the past few months. 
Steel prices have plummeted over the last 3 years, with no hopes of 
rebounding, and an additional five U.S. steel companies entered Chapter 
11 in the first 4 months of this year, with more certain to follow 
absent Presidential action on Section 201.
  My State has two major steel facilities, one owned by Weirton and the 
other by Wheeling-Pittsburgh. Wheeling-Pitt is in bankruptcy and 
Weirton is struggling. Thousands of jobs and two important communities 
in a small, relatively poor State are threatened. It is a situation 
that is all too common in the American steel belt, and one that demands 
immediate attention.
  Throughout the steel belt, tens of thousands of jobs are at stake; 
more than 20,000 have already been lost. Hundreds of communities are 
endangered. Billions of dollars in wages and shareholder value are 
threatened. Most alarming, our national security is threatened. Unless 
we act decisively, the United States could soon be as dependent on 
foreign steel as we are on foreign oil. We are facing a permanent loss 
of capacity that has the potential to harm every heavy industry in this 
country, including automakers, defense contractors and, in my home 
State of West Virginia, aerospace companies.
  For some time now, I have advocated consolidation as one of the best 
ways to ensure the survival of the domestic steel industry in the face 
of this massive surge of imports. Merged companies create greater 
economies of scale and with their enhanced capacity and purchasing 
power, stand a better chance of competing against their heavily 
subsidized foreign competitors. While consolidation by itself will not 
relieve the hardships of the steel crisis for our steelworkers, their 
families and communities, the domestic industry can really only recover 
with the imposition of remedies under Section 201, I believe that it is 
a step in the right direction.
  Unfortunately, the pace of consolidation in the domestic industry has 
been slowed due to companies' fears of assuming the tremendous legacy 
and environmental compliance costs of acquired entities. Legacy costs, 
in particular, are a tremendous expense for companies, as there are 
more retired steelworkers than steelworkers currently employed. The 
burden of assuming such substantial costs has acted as

[[Page S5123]]

a deterrent to industry consolidation, which I believe, gives our 
industry a much better chance of long-term survival.
  The Save the American Steel Industry Act of 2001 attempts to address 
these concerns. Title I of the Act establishes a Steel Retiree Health 
Care Board in the Department of Labor to administer a newly-created 
Health Care Benefit Costs Assistance Program. Under the program, the 
board will contribute funds to eligible steelworker group health plans 
equal to 75 percent of the qualified expenditures of such plans. The 
funds will be allocated from a Steelworker Retiree Health Care Trust 
Fund in the U.S. Treasury financed by a 2 percent Federal excise tax on 
all steel products sold in the United States.
  Title I is critical, because by some estimates, 10 percent of the 
cost of steel in the U.S. consists of payments to pension and retiree 
health care funds for workers laid off in the 70's and 80's. This new 
fund would be accessible to all steel companies providing health 
insurance to retirees and, as the pool of affected retirees declines, 
the tax will be reduced. In the meantime, U.S. companies will be at 
less of a disadvantage against competitors whose governments pick up 
the tab for health care and retirement costs.
  Title II of the Act allows merged companies to apply for grants of up 
to $200 million from the Commerce Department to help cover the costs of 
compliance with applicable environmental regulations. The Secretary of 
Commerce can only provide grants after it is determined that the merger 
promotes maximum retention of jobs and production capacity consistent 
with long-term viability. Specifically, at least 80 percent of the 
steelworkers employed by the merging companies, including a minimum 50 
percent of steelworkers employed by the acquired company, must be 
retained to qualify for a grant. At least 80 percent of the steelmaking 
facilities of each party must be retained. The Act provides for 
substantial penalties if a company receiving a grant subsequently 
violates these thresholds.
  Together, these two actions could make a tremendous difference for 
many domestic steel mills, especially small and mid-sized operations by 
providing incentives for domestic steel companies to consider joining 
forces. The Health Care Benefit Costs Assistance Program proposed under 
Title I makes mergers more likely by ensuring that a large portion of 
legacy costs inherited in consolidation plans would be covered by the 
Federal Government. By providing domestic steelmakers with substantial 
funds to bring merged facilities into compliance with environmental 
laws, Title II of the bill provides further incentives for 
consolidation. At the same time, Title II ensures that steelworkers and 
their families are not sacrificed in the merger process by requiring 
that most jobs and production capacity are retained and by heavily 
penalizing companies that receive funding and subsequently do not stick 
to the agreement.
  The American steel industry has earned the respect and consideration 
of this body as an industry that took some very tough medicine not so 
very long ago. During the first steel crisis, the U.S. steel industry 
got very little sympathy. As the first great wave of imports washed 
across our coasts, the industry was told that it was too old, too 
inefficient, and too unresponsive to save.
  But rather than walk away, the American steel industry put itself 
through a wrenching, and almost miraculous revitalization, transforming 
century-old mills into miracles of modern production. No steel industry 
on earth gets more production per man hour than the U.S. industry. None 
has a cleaner environmental record. No one has been faster or more 
effective at integrating computer technology into its production.
  And yet, having done that, the industry finds itself threatened 
again--not by better steelmakers, but by subsidized producers. 
Companies who have the support of their governments are taking 
advantage of our traditional commitment to trade, to dump steel on a 
saturated market. Their competitive advantage lies in their government 
support, and not their manufacturing skill. It is not fair. It is not 
just. And I don't believe that our Government should stand by idly and 
let the painful years and billions of dollars our steel industry 
invested be stolen away by companies who do not play by the rules.
  The Save the American Steel Industry Act of 2001 represents the first 
step in the Federal Government's commitment to ensuring that the United 
States maintains our basic steelmaking capacity. While I do not believe 
that the industry can survive without a comprehensive Section 201 
action on all steel products and ultimately, negotiation of a 
multilateral steel agreement with our trading partners to address the 
foreign overcapacity problem, this act provides greater incentives for 
domestic steel companies to consider consolidation, which, I believe, 
substantially enhances their chances of survival in today's 
increasingly turbulent steel marketplace. Failure to act now, in this 
Congress, would be a grave mistake.
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