More of our money down the drain

In 2000 Congress passed the Continued Dumping and Subsidy Offset Act. That's a wonderfully meaningless name for an act half of whose benefits have gone to five companies. And, the benefits have not been small: $1 billion between FY2001 and FY2004. The GAO has just issued a report on the effectiveness of this law, which is known as the Byrd Amendment.

From the formal name of the act you can conclude that it somehow helps those hurt in some way by foreign competitors who 'dump' their goods here at a low price. But, rather than cover all industries that might be affected by dumping, just about all of the money goes to only three industries: ball bearings, steel or candles.

Furthermore, rather than cover all companies in a particular industry, only those companies that filed a petition for relief or that publicly supported the petition during a givernment investigation to determine whether injury had occurred are eligible. So, unless you screamed that you were getting hurt and filed the appropriate paperwork, you were ineligible for any cash.

The paperwork for this act is handled by Customs and Border Protection (sidebar: shoudn't they be watching our borders?). They have a very hard time meeting the requirements of the act to pay everybody within 60 days after a new fiscal year starts. Part of the problem is a lack of standardization and use of automation.

Because Customs is not very efficient in implementing this law, most companies do not have to support their claims. What this has led to is a situation where, because the claims cannot be handled, your chances of getting money under this law is a function of how many claims you file. The more claims you file, the more money you collect. That's right, Customs pays claims on a pro-rata basis. Which is why claims have just about doubled from $1 trillion in 2001 to almost $2 trillion in 2004.

As a capstone to this inefficiency, Customs has a major problem in collecting the duties from which the claims are to be paid. About half of the funds due are still not collected.

And, you may remember, that the World Trade Organization found that this act violated agreements we had made under the auspices of that organization. This will lead to our paying more tariffs on our exports.

This sounds like a really stupid bill, right? Here's one place we could find some money to fund the hurricane disaster relief effort. Well, 70 of our Senators have signed a letter in support of this act.

Go figure.