Byrd Amendment hangs in the balance
The US House of Representatives narrowly passed the Budget Deficit Reduction Act of 2005 which, among other things, repealed the Continued Dumping and Subsidy Offset Act (CDSOA) proving once again that every legislation in Washington must have a turgid sounding name or it is no fun.
But let's not celebrate too soon.
As reported yesterday, the Budget Deficit Reduction Bill will go to a conference committee where the House of Representatives and the Senate will thrash out differences between their two bills. And there is widespread support for the CDSOA which was, after all, introduced by Democratic Senator Robert Byrd of West Virginia, hence its more common name: The Byrd Amendment. At this point, chances are that the Senate will insist on keeping the CDSOA intact even though this law repeatedly has been ruled illegal by the World Trade Organization (WTO). Even the US Governmental Accounting Office (GAO), an investigative body that keeps an eye on how public funds are spent, has reported that the validity of some of the claims are hard to verify.
There is a lot of money at stake. From fiscal 2001 to fiscal 2004 slightly over $1 billion has been given to "injured" US industries. Nobody has received more than the ball bearing industry thanks mostly to penalties on Japanese imports. In fiscal 2004 the ball bearing industry received $79 million. Timken Co. alone was paid over $205 million in the 2001-2004 timespan, even more, if you include their subsidiaries.
Though the
US steel industry cannot claim such lofty receipts, it did not fare too poorly either. In fiscal 2004, according to Consuming Industries Trade Action Coalition (CITAC), the following steel companies received over a million dollars:
US Steel Corp ($7.1 million), AK Steel ($6.8m), Maverick Tube ($3.6m), Allegheny Ludlum ($2.5m), Wheatland Tube ($1.9m),
Nucor ($1.6m), Ispat Inland ($1.6m), J&L Specialty ($1.5m), Allied Tube and Conduit ($1.4m), and Gerdau Ameristeel ($1m).
US Steel is the largest recipient in the steel industry. During the four years of the Byrd Amendment $22.9 million were funneled to them.
The stakes are high. Timken in particular has a lot to lose so we can expect an intense lobbying effort on their part.
It would be a shame if the Senate would cave in to any pressure and not follow the slim lead of the US House of Representatives. There was a time when the US stood for Free Trade. It should try to get back to this leading role!