INTRODUCTION OF THE STEEL FINANCING FAIRNESS ACT
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 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.