Canton Repository

February 4, 2003

Federal budget may cut steel aid programs

By PAUL M. KRAWZAK
Copley Washington correspondent

WASHINGTON — Two programs favored by Ohio steel companies and their supporters in Congress would take a hit in the 2004 budget proposed by President Bush on Monday.

The administration’s spending plan would, if approved by Congress, end the availability of federally guaranteed emergency loans to troubled steel makers such as Wheeling-Pittsburgh Steel Corp.

The administration also suggests in the budget that Congress repeal a law that allows companies such as the Timken Co. to divvy up the proceeds of anti-dumping tariffs or fines paid by foreign manufacturers.

The Canton-based maker of tapered bearings has collected millions of dollars through the two-year-old “dumping and subsidy offset” law.

Ohio Republicans who agree with the president on most matters are among those who want to preserve the steel programs.

Sen. Mike DeWine, R-Cedarville, is collecting signatures from 60 some senators to persuade Bush to negotiate changes in the tariff distribution law rather than seek to repeal it.

Last month, the World Trade Organization ruled that giving tariff proceeds to American companies violated international trade agreements. The law was meant to compensate steel companies and other firms that have suffered from unfair trade.

Rep. Ralph Regula, R-Bethlehem Township, who backs the tariff distribution, noted that only Congress may repeal the law.

The administration probably will suggest “some different ways of distributing the money that could be helpful to the industries affected,” he said. Regula wasn’t sure if Congress would stand behind the law after the WTO ruling.

“I don’t think it’s on the radar screen of most members at this juncture,” he said.

Bush’s plan to end funding for emergency loans to steel companies faces opposition from Rep. Bob Ney, R-St. Clairsville. The loans are important to help companies such as Wheeling-Pitt “restructure and modernize,” he said.

Wheeling-Pitt has applied for an emergency loan. The West Virginia-based company is attempting to climb out of Chapter 11 protection from bankruptcy.

Although he is as pro-steel as Ney, Regula questioned the effectiveness of the three-year-old emergency loan program.

“No company in (my) district has even talked to me about it,” Regula said. “I want to see if it gets any results. Does it help anybody? Does it help any company preserve jobs? There may be other ways we can spend the money more effectively,” he said.

Area projects financed by the Army Corps of Engineers would remain about the same under the president’s proposal.

The budget proposal includes $25,000 in funding to maintain an earthen flood control levy along the Tuscarawas River in Massillon, matching previous funding.

Berlin Lake, a flood control and recreation project near Alliance, would get $1.69 million, down from almost $1.86 proposed by the administration the previous year.

The budget shows an increase to almost $7.8 million in funding for Muskingum River Lakes, a series of dams along the river and its tributaries. The previous year’s proposed funding was more than $6.13 million.

Reaction to the president’s budget followed party lines.

While Sen. George Voinovich, R-Cleveland, praised the inclusion of $15 million to help clean up Ohio rivers and the Great Lakes, Rep. Sherrod Brown, D-Lorain, charged the spending plan rewards the rich while neglecting the middle class and poor.