Cattle vs. Steel
2/14/2002 12:00:00 AM - George Will
WASHINGTON--Pandering is part of politics, but President Bush tiptoed to the edge of parody when, addressing cattlemen, he said the Sept. 11 terrorists underestimated American toughness because they ``had never been to a National Cattlemen's Convention,'' which is probably true. He tumbled over the edge by saying agriculture subsidies are national security programs because ``this nation has got to eat. It's in our national security interests that we be able to feed ourselves.''
The cattlemen probably purred under this stroking. Steelworkers probably noticed. And Congress almost certainly saw no incongruity between turning the federal budget into a cornucopia of subsidies to purchase farmers' and ranchers' votes while waxing virtuous about campaign finance reform.
As Bush surely knows, American farmers were prodigiously productive and
Americans ate well even before the New Deal invented agriculture subsidies. But with control of both houses of Congress at issue, and a number of farm-state Senate races looking close, there is scant resistance to new farm legislation that will spend about $17 billion a year on farm programs--a coerced campaign contribution from taxpayers.
While Congress prepares to spend, every two years, a total of $34 billion of other people's money to cultivate the votes of just this one constituency, Congress wants to limit what Americans voluntarily can contribute to political causes. Congress says it is a scandal that campaign finance laws permitted Americans voluntarily to contribute the comparatively trivial total of $2.7 billion to support all federal primary and general election campaigns in the 1999-2000 election cycle.
Bush, who says peanut subsidies are national security measures, must soon announce his remedy for the plight of the steel industry. The less than 150,000 steelworkers, and the four times that many retired steelworkers whose retirement benefits are jeopardized by the industry's crisis, are watching Congress' solicitude for farmers, and will be incensed by anything less generous. There are steelworkers in 16 states, but many workers and retirees are in West Virginia, which Bush barely carried, in Ohio, which he must carry again, and in Pennsylvania, which he wants to carry next time.
Largely because of the mistaken policies of foreign governments, there is a worldwide glut of steel production capacity. It has been duly established that there has been injurious ``dumping'' of foreign steel in the U.S. market. That is one--but just one--reason why 30 U.S. steel companies have filed for bankruptcy in the last four years. In December, 39 nations, including the United States, agreed to cut production capacity, but only by 97.5 million tons per year--just one-third of existing overcapacity--and to take until 2010 to do so.
The U.S. steel industry's wish list includes additional import quotas and a tariff of at least 40 percent. Both would be, in effect, taxes on manufacturers who use steel, and their consumers. The wish list also includes government assumption of $12 billion of steel companies' ``legacy costs''--extremely generous retirement benefits. These cannot be blamed on foreigners, having been improvidently negotiated with the steelworkers union in balmier days.
Because these benefits include medical coverage far superior to what most Americans enjoy, government would, in effect, be ratifying a two-track Medicare system. This would be a hard sell even if some retirees were not still in their 50s; even if many did not have medical plans with no deductibles, few co-payments and prescription drug benefits unavailable under Medicare; even if the federal budget were not slipping into deficit; and even if Enron had not heightened sensitivities about government entanglements with corporations.
On the other hand, there would be huge costs in simply allowing economic Darwinism to work. There would be costs in government benefits for devastated communities. And there would be the suffering of 600,000 retired steelworkers--30 times more numerous than Enron employees--whose retirement benefits could become nothing but billions of dollars of unfunded liabilities of bankrupt corporations.
Besides, last year, 16 days before Sept. 11, Bush told a Pittsburgh audience of steelworkers that steel is a national security matter. Like agriculture subsidies.
Because this is campaign finance reform week in Congress, herewith a question for reformers:
Steel tariffs and quotas would cost domestic steel users many billions of dollars--perhaps hundreds of thousands of dollars for every steelworker's job saved. Suppose electoral considerations are, say, one-third of the motive for imposing any new tariffs and quotas. Then one-third of the cost of tariffs and quotas would be, in effect, a campaign contribution of billions of taxpayers' involuntary dollars, coerced by the recipients--politicians. Is this kind of political contribution going to be regulated? Or will regulations only limit the much smaller and voluntary contributions by individuals?