Clinton Plan For Steel Panned

President Clinton is pledging to seek tax breaks for steel companies and aggressively pursue U.S. trade laws in an effort to protect the jobs of American steelworkers threatened by a flood of cheap foreign imports.

In a report ordered by Congress, Mr. Clinton held out a threat of action against Japan if that country does not live up to promises, made during Mr. Clinton's recent visit, to cut steel exports to the United States. Those imports to America have surged by 480 percent this year.

But the industry and lawmakers from steel-producing states were quick to reject the president's approach as offering too little help.

"You have a steel industry hemorrhaging with the flooding of our markets with foreign dumped steel, causing the loss of thousands of jobs, and the administration is applying a small Band-Aid to that massive hemorrhage," complained Sen. Arlen Specter, R-Pa., chairman of the Senate Steel Caucus.

In a 20-page action plan issued Thursday night, Mr. Clinton pledged to seek $300 million in tax breaks for steel companies that contend they are losing sales because foreign nations are dumping excess steel in this country at unfair prices.

The president also said he would appoint a high-level White House coordinator to make sure government benefits flow quickly to the thousands of steelworkers laid off because of cutbacks in U.S. production.

But the plan did not give the industry its most cherished goals - either quotas on steel imports or broad negotiations to force other nations to accept "voluntary" restraints on their shipments to the United States.

The administration missed by two days the deadline set by Congress to produce the plan, reflecting an intense internal debate. One group of advisers, led by Commerce Secretary William Daley, argued the political merits of helping a key U.S. industry and its union workers.

But the opposing camp, led by Treasury Secretary Robert Rubin, carried the day with arguments that the United States could not risk setting back chances for recovery from the worst global economic crisis in a half-century by erecting protectionist barriers that would close off the big U.S. market.

"Unfortunately, the president seems more concerned about the global economic effect of taking action on steel than protecting American steelworkers who are suffering," complained Sen. Jay Rockefeller, a West Virginia Democrat.

When the administration missed the Tuesday deadline, it gave as one reason Mr. Clinton's desire to talk personally about the issue with Rockefeller. But the senator said in a statement late Thursday that he was "deeply disappointed" in the plan and would work to make sure Congress crafts a tougher response.

The administration insisted it was "deeply concerned" about the record steel imports to the United States in 1998, up 30 percent in the first 10 months of the year, and was committed to protecting Ameican companies and their workers.

The administration said it would seek $300 million in new tax breaks for steel companies in Mr. Clinton's new budget, which he is scheduled to submit on Feb. 1.

The new relief would allow steel companies to spread out over five years, instead of just two, losses incurred from the import surge. A similar "carryback" provision for farmers was approved last year, providing tax relief to another sector hard hit by trade losses from the global financial crisis.

The steel industry and its unions have already filed cases against Japan, Russia and Brazil, accusing those nations of "dumping" steel in this country at unfairly low prices and asking the government to impose penalty tariffs of up to 200 percent on certain types of steel.

The administration's report pledged those cases would be handled on an expedited basis and noted that the Commerce Department has agreed to apply the punitive tariffs retroactively to mid-November. But members of Congress said those cases will require months before tariffs can be imposed, meaning thousands more layoffs.

Just Thursday, Bethlehem Steel announced plans to eliminate 540 jobs in Washington, Pa., and Massillon, Ohio, citing sustained losses and the impact of "unfairly traded" steel imports.

"The president has clearly turned his back on the steelworkers," said Rep. Bob Ney, R-Ohio.

Rep. Ralph Regula, R-Ohio, said the administration was making a mistake in not pushing for voluntary restraint agreements with foreign steel producers similar to those negotiated during the Reagan and Bush administrations.

While the White House had considered such an approach, Rubin and other officials argued that it would violate rules of the World Trade Organization, created in 1995 to police world trade.

Written By Martin Crutsinger, AP Economics Writer