Earlier this year, Political Calculations noted the obscene corporate rent-seeking behavior that was unleashed by an amendment authored by Senator Robert C. Byrd that redirected federal tariff revenues away from the U.S. Treasury to instead go to companies found to be "disadvantaged" by the importing of goods at "unfairly" low prices.

The good news is that the Byrd Amendment, which only benefitted a handful of companies with the lobbyists and connections needed to game the system, is coming to an end. From the December 21, 2005 edition of the Washington Post (via Cafe Hayek):

A festering trade dispute between the United States and several major trading partners appears set to subside after the Senate voted yesterday to repeal an anti-dumping law that was ruled illegal by the World Trade Organization.

The Senate action, which came as part of a broader budget bill that passed with Vice President Cheney's tie-breaking vote, would phase out the Byrd amendment, a five-year-old measure especially popular with lawmakers from industrial states heavily affected by foreign competition. The House has already voted to repeal the amendment, named for Sen. Robert C. Byrd (D-W.Va.), in nearly identical legislation.

That it took a ruling by the World Trade Organization to make the U.S. government stop doing this particular stupid thing that threatened to severely damage U.S. businesses and consumers through retalitory tariffs reflects poorly on our national politicians. Still, the attraction to keep their rent-seeking campaign donors happy was too much to resist:

The repeal would be delayed for two years, giving some U.S. lumber firms and other companies the chance to continue receiving substantial sums under the amendment. That compromise was necessary to secure yesterday's vote.

Companies looking to milk the flow of "free" money to get their "fair" share while the clock is still ticking should note how the companies that have disproportionately benefitted the most from the scheme have done so (from the October 4, 2005 Wall Street Journal via Truth About Trade and Technology):

These companies won the Byrd lottery by figuring out that payouts depend more on how many claims are filed than on whether they are valid. U.S. Customs and Border Protection, which is charged with collecting and disbursing the Byrd duties, has more claims than it can handle so it uses a pro-rata formula for disbursements. This, as GAO drily notes, has created "an incentive for producers to claim as many expenses as possible relative to other producers."

Never mind that it's wrong - it's legal! Besides, if enough "disadvantaged" companies suck up the available funds fast enough, that's that much sooner the Byrd Amendment will hit the scrap heap of really poorly thought out bad legislation. It also has the benefit of having the potential to really irritate the companies that are already exploiting the system, since having more companies come in to claim they are "disadvantaged" would limit their expected revenue from the program. Finally, it would also put us another day closer to when the fed-up and ripped-off masses might finally be free to pull down that stupid statue, just like they did in Iraq....

- posted by Ironman at 6:55 AM | Permalink | |