Summary: Pursuant to a congressional request, GAO discussed an institutional mechanism for coordinating Federal steel policy and the need to establish criteria for evaluating the effectiveness of any steel policies initiated. The possible role of the Steel Tripartite Advisory Committee in developing an approach to Federal steel policy was considered. GAO noted that the steel industry is beset with many problems: (1) excess world steelmaking capacity; (2) competition with imported steel; (3) obsolescence of domestic production equipment; (4) the high cost of pollution control and labor; (5) U.S. tax laws affecting capital formation and reinvestment; and (6) failure or inability of industry to reinvest in plant and equipment modernization. GAO concluded in a previous report that prior Federal efforts to aid the steel industry were unsuccessful because: (1) they lacked specific national objectives; (2) there was no meaningful attempt to achieve coordination among plans aimed at aiding the steel industry; and (3) they did not recognize the necessity for concessions from both the steel industry and its labor force. GAO believes that the formation of the Steel Tripartite Advisory Committee represented an important first step in developing a Federal steel policy and that it could be a vehicle for ensuring that the deficiencies in prior Federal efforts to address industry problems are resolved.
