The Byrd Amendment is Finally Gone But With a Twist
February 10, 2006
When considering ways to reduce the federal budget deficit, Congress decided to repeal the Continued Dumping and Subsidy Offset Act, or the Byrd Amendment. In fact, nothing could have been more damaging to the national debt and to consumers than the Byrd Amendment. Essentially, the Act allowed US companies that won trade cases to petition the government to keep the money they claimed damaged their operations. Specifically, antidumping and countervailing duty revenue flowed out of the U.S. Treasury and into the bank accounts of individual companies. It is easy to see that that the Byrd Amendment was an egregious piece of corporate welfare legislation.
While a select few industries benefited, consumers at large were injured. As consumers of imported goods, these trade cases led to high tariffs on those goods subject to the trade remedies. High tariffs lead to abnormally high prices at stores and supermarkets. The Act also encouraged many US companies and industries to bring trade cases against their overseas competitors since they could receive winfall gains if they won their cases. Once again, consumers of imported products loose. Secondly, as tax payers, consumers are injured yet again by actually paying the extra duties flowing out of the US Treasury into the bank accounts of companies. A recent General Accountability Office study stated that consumers helped re-distribute over $1 billion in general revenue to a select few US corporations since the implementation of the Byrd Amendment.
Thankfully, Congress included repeal of the Byrd Amendment in the budget reconciliation bill saving consumers potentially billions of dollars if the amendment was not repealed.
However, there's a hitch. Technically, the repeal will not fully go into effect until 2007 so companies can still receive a big check from the government. One of the largest potential beneficiaries is the US lumber industry. Almost $4 billion is sitting in the bank in collected border taxes - ultimately paid by consumers - from a lingering trade dispute (see earlier article). If the case is settled, US lumber mills could receive this $4 billion in windfall gains from border tax revenue. If this happens, homebuyers and those rebuilding their homes after hurricanes Katrina and Rita will have subsidized US lumber mills for keeping construction prices high. We all hope this doesn't happen.
Despite the hitch, CWT
worked long and hard education members of Congress and the Bush Administration
to repeal one of the worst pieces of corporate welfare legislation.