Ron Paul
2003 Ron Paul Chapter 97

Ron Paul Introduction Of The Steel Financing Fairness Act

10 September 2003

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Introduction Of The Steel Financing Fairness Act
10 September 2003

Wednesday, September 10, 2003

2003 Ron Paul 97:1
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.

2003 Ron Paul 97:2
No one can doubt that the United States steel industry is in crisis. Approximately 15 million tons of flat-rolled capability (20 percent of the existing domestic capacity base at the start of 2000) was closed in the 18 months from September 2000 to December 2001. The decline of the steel industry has a human cost: in just the last five years, 30,000 Americans once productively employed in the steel industry have joined the ranks of the unemployed.

2003 Ron Paul 97:3
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.

2003 Ron Paul 97:4
For example, according to the most recent figures available, the eight 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 over $250 billion of U.S. taxpayer support to these countries.

2003 Ron Paul 97:5
Meanwhile, OPIC has provided over $3 billion of the taxpayers’ money to seven of the top ten leading steel exporters. Thus, the American taxpayer has provided at least $253 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.

2003 Ron Paul 97:6
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.

2003 Ron Paul 97:7
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.

2003 Ron Paul 97:8
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 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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