Rep. Doyle Serves as Ranking Member at Congressional Hearing
Examining Retired Steelworkers Benefits

Tuesday, September 10, 2002 - Washington, D.C. - U.S. Representative Mike Doyle (PA-18) helped to bring much-needed attention to the issue of steel legacy costs during a hearing held today by the House Energy and Commerce Committee's Subcommittee on Commerce, Trade and Consumer Protection, of which Rep. Doyle is a member. The hearing, at which Rep. Doyle served as ranking member, focused on the Steel Industry Legacy Relief Act, H.R. 4646.

"Our nation's steelworkers have dedicated years of hard work and service to the success of our nation's steel industry under the premise that they would receive health care benefits and a pension upon their retirement," stated Rep. Doyle. "This legislation would provide the necessary measures to allow the steel industry to meet their commitments to the retired steelworkers of this country as well as encourage consolidation which will help to create a stronger, more cost-effective steel industry."

The primary aim of the Steel Industry Legacy Relief Act is to secure health insurance for several hundred thousand retirees who have or soon will lose all retiree benefits. Secondly, the bill seeks to strengthen the American steel industry by not only removing the weight of "legacy costs" as a barrier to their merging, but does so in ways to encourage American firms to create the kinds of larger companies now operating in Europe and Asia. Lastly, this legislation seeks a preference for American steel companies. This is provided by a "right of refusal" on the purchase of other American steel companies to other existing steel companies.

The program established under the Steel Industry Legacy Relief Act will be administered by the Department of Commerce by a seven-person Board consisting of two representatives of the steel industry, two representatives of the United Steelworkers of America, and three designated jointly by the industry and union representatives.

"Unfair trade and illegal steel dumping in this country have victimized the American steelworker as well as caused our nation's steel industry to suffer deeply," stated Rep. Doyle, who has been a member of the House Steel Caucus since first coming to Congress in 1995. "Falling profits, coupled with rising healthcare costs, have put a tremendous financial strain on the American steel industry in meeting their obligations to their retirees of a guaranteed pension with healthcare benefits. This legislation will ensure that steelworkers and their spouses receive the benefits for which they are entitled."

The program directs the Board to provide health coverage similar to a Medicare level of coverage and a prescription drug benefit similar to the benefits in the federal plan, "The Blue Cross/Blue Shield Standard Plan."

The program will be funded through the establishment of a Trust Fund, which will obligate steel companies, their retirees, and/or the federal government, as the case may be, to pay for the following amounts into the Trust Fund for the payment of program benefits:

1)  From the three years of tariffs on steel imports announced by President Bush in the steel Section 201 proceeding;
2)  From companies whose retirees are enrolled in the program through Voluntary Employee Benefit Association (VEBA) trust funds from bankrupt companies;
3)  From owners of the acquiring steel companies, a surcharge of $5 per ton of products shipped that are produced with acquired steel-making assets paid by companies that acquire assets whose retirees are included in the program; and
4)  Such additional amounts from the general treasury of the United States as necessary for the program.

To obtain Program benefits, a retiree must meet certain eligibility conditions, and his or her former employer must undergo a "qualifying event." The retiree, who may have been union or non-union, hourly or salaried, must have met the years of service requirement of the retiree health plan maintained by the company from which he or she retired. In addition, the company must have been operating as of January 1, 2000, and have experienced any one of the following qualifying events:

1)  A permanent closing occurring any time after January 1, 2000, and before January 1, 2004;
2)  An American steel company acquired their company;
3)  The steel company is bought after a U.S. company passed on acquisition;
4)  A bankrupt company sells off at least 50% of steel making; and
5)  The Secretary of Commerce acknowledges the bankrupt company has made a "good faith" effort to be sold.

After 200,000 steel retirees and beneficiaries have been enrolled in the program, all steel companies that have not previously qualified may enroll their retirees into the program. This provision will prevent competitive disadvantage.

Testimony was provided at the hearing by Bill Klinefelter, Assistant to the President of the United Steelworkers of America; Thomas Roderick, Manager, Total Health Benefits, Bethlehem Steel; and James Collins, Senior Advisor and former President of the Steel Manufacturers Association.

The Steel Industry Legacy Relief Act, has 171 cosponsors as well as broad industry and union support.

To obtain copies of the testimony from the hearing, please contact Tina Maggio at 202-225-2135.

###