[Congressional Record Volume 152, Number 77 (Thursday, June 15, 2006)]
[Extensions of Remarks]
[Pages E1162-E1163]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            INTRODUCTION OF THE STEEL FINANCING FAIRNESS ACT

                                 ______
                                 

                             HON. RON PAUL

                                of texas

                    in the house of representatives

                        Thursday, June 15, 2006

  Mr. PAUL. Mr. Speaker, I rise to introduce the Steel Financing 
Fairness Act. This bill helps our Nation's beleaguered steel industry 
by stopping the government from forcing American steel workers to 
subsidize their foreign competitors. Specifically, the bill prohibits 
the Overseas Private Investment Corporation (OPIC) and the Export-
Import Bank (EXIMBANK) from providing any assistance to countries that 
subsidize their steel industries. The Steel Financing Fairness Act also 
instructs the Secretary of the Treasury to reduce America's 
contribution to the International Monetary Fund (IMF) by a prorated 
share of the IMF's assistance to countries that subsidize their steel 
industries.
  One of the problems facing America's domestic steel industry is that 
it must compete with foreign industries that receive subsidies from 
their governments. Some of these subsidies are explicitly intended to 
provide these companies with a non-market advantage over American steel 
producers. The U.S. Government further compounds the damage caused by 
these subsidies by forcing the domestic steel producers to support 
their major competitors through taxpayer-funded programs.
  For example, according to the most recent figures available, the five 
countries with the greatest EXIMBANK exposure are all among the top ten 
exporters of steel and/or steel products to the United States. In fact, 
EXIMBANK has provided almost $20 billion of U.S. taxpayer support to 
these countries.
  Meanwhile, OPIC has provided almost $6 billion of the taxpayers' 
money to leading steel exporters. Thus, the American taxpayer has 
provided at least $26 billion worth of support to the countries that 
are the leading competitors of the domestic steel industry. This does 
not count the funds provided these countries by the IMF. Since money is 
fungible, the practical effect of providing aid to countries which 
practice industrial policy is to free up resources these governments 
can use to further subsidize their steel industries. Thus, taxpayer 
dollars sent to foreign governments and industries can benefit foreign 
steel manufacturers even if American taxpayer money is not sent to 
directly benefit those industries.
  However, hard as it may be to believe, organizations funded by 
American taxpayers actually use American tax dollars to directly assist 
foreign steel producers! For example, among the projects funded by 
EXIMBANK in recent years is an $18 million loan guarantee to expand 
steel manufacturing in Red China.
  Ironically, many of the supporters of these foreign giveaways claim 
to be promoters of free trade. This claim makes as much sense as a 
supporter of higher taxes and spending claiming to be a fiscally 
conservative supporter of limited government. Free trade is the 
peaceful exchange of goods and services across borders unhampered by 
government interference. Taxing American workers to support their 
overseas competitors is not free trade. Instead, it is corporatism 
designed to benefit certain politically powerful interests at the 
expense of American entrepreneurs and workers.
  I have no doubt that America's steel industry can out-compete the 
steel industry of any country if allowed to compete on a level planning 
field. Unfortunately, due in part to government policy, today's playing 
field is in no way level. Congress must end this economically

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destructive, immoral, and unconstitutional policy of forcing owners and 
workers in the domestic steel industry to subsidize their competitors. 
I therefore call upon my colleagues to cosponsor the Steel Financing 
Fairness Act.

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