Obama's chief of staff hears Range woes firsthand
VIRGINIA, Minn. -- White House Chief of Staff Denis McDonough got an earful Tuesday on the economic woes of the Iron Range, and about how the federal government must act fast to rescue the U.S. iron ore and steel industries and the communities th...
VIRGINIA, Minn. -- White House Chief of Staff Denis McDonough got an earful Tuesday on the economic woes of the Iron Range, and about how the federal government must act fast to rescue the U.S. iron ore and steel industries and the communities that depend on them.
More than 50 people packed a meeting room at Mesabi Range Community and Technical College to send McDonough back to President Obama's office with a message of urgency -- that fast, decisive action is needed to stop what officials told him is a national "steel dumping crisis."
"The reason I'm here is because of the urgency the president has in this situation," said McDonough, a Minnesota native.
The chief of staff spent more than two hours with U.S. Sens. Amy Klobuchar and Al Franken, Rep. Rick Nolan, Gov. Mark Dayton and state legislative leaders along with steel industry executives, Iron Range elected officials and laid-off steelworkers.
The meeting was closed to the public and media but several politicians and steelworkers talked to reporters after.
That includes Dan Hill of Hibbing, a millwright and one of 400 steelworkers who have been laid off from United Taconite since May because there is no demand for the plant's taconite pellets. Hill said he wants the industry salvaged not just for him, but for his 7-year-old son, Riley, who told his dad recently that he wants to be a miner when he grows up.
"I told him (McDonough) to make sure our kids have a future up here. That we're not the last generation of miners," said Hill, a member of USW Local 6860.
Hill said he tossed McDonough two of his union-logo shirts and told him to take one of them back for his boss in Washington.
Hill confessed that he hasn't been optimistic about the future of the Iron Range and iron mining, saying he couldn't see any light at the end of the tunnel for lost jobs to come back.
"But, after this meeting, I think the light has been re-lit," Hill said.
The federal government can help Minnesota's Iron Range, supporters say, by supporting the domestic steel industry that gobbles up Mesabi Range taconite iron ore. McDonough heard pleas for faster, tougher actions to keep unfairly traded foreign steel out of the country. Foreign steel is now making up nearly one-third of the steel used in the U.S.
Even veteran Minnesota politicians said they were moved by steelworkers and Iron Range mayors explaining the dire nature of the ongoing downturn.
"This was a moving meeting in so many ways, to hear from the workers and what they are going through," Klobuchar told reporters after the closed-door session. The senator and others said they told McDonough that the president must act not only to save the economic viability of iron ore and steel towns, but to prevent a national economic depression and to retain steelmaking for national defense.
"We've all seen the ups and downs of the mining industry before. But we have never seen anything like this," Klobuchar said. "We are sincerely concerned this is a systemic breakdown."
McDonough said the message was delivered clearly and with impact. And while he declined to discuss policy specifics, he said the issue is clearly on the president's agenda.
McDonough described the session as a "very informative analysis and statistic-based discussion that was also ... quite emotional" and said he would carry the sense of urgency back to the president.
That the Iron Range is hurting isn't in doubt. More than half of the region's major mining operations have shut down, with thousands of mine workers laid off, their families' financial future in doubt and mainstreet businesses pinched.
"This (downturn) is different and that is very frightening," Franken said.
A huge increase in the amount of iron ore mined in recent years has helped fuel a similar increase in steelmaking capacity in China and other nations, especially in Asia. That glut of ore also drastically dropped in price, making it cheaper to make steel overseas. But now China's economy has slowed and doesn't need as much steel.
Instead of shutting down their steel mills, the excess steel is heading to western markets, including the U.S. Critics say the steel is being sold at less than the cost of production, a violation of international trade laws.
"As important as it is for us (on the Iron Range) it goes way beyond. Way beyond," Nolan said.
Lourenco Goncalves, CEO of Cleveland-based Cliffs Natural Resources, said the U.S. Steel industry is in the "emergency room."
The overall U.S. economy "has been fixed. We have demand" for steel for bridges, cars and trucks and appliances. But too often that steel is coming from overseas "because of a crime being perpetrated on American soil by a foreign country ... China."
"We need action and we need action quick," Goncalves said. "We can't afford procrastination."
The Iron Range can survive as long as the domestic steel industry survives, supporters say. But the nation's largest steelmakers "are hemorrhaging cash every day," and won't last long in the face of unfair foreign trade, said state Senate Majority Leader Tom Bakk, DFL-Cook.
If the nation's biggest blast furnaces go cold, Bakk said, the steel industry and the Iron Range may not be able to recover.
Nolan and other lawmakers have called on the federal government to outright ban all steel imports for five years, and Nolan has introduced legislation to that effect. Congress also included increased funding for illegal trade enforcement in its recent 2016 budget and ordered federal agencies to make enforcement a priority. The budget bill also orders the Environmental Protection Agency to use domestic steel only in its water projects nationwide.
"The president can look at banning imports ... but he's got other options. Enforcement is the key," Klobuchar said, noting Congress has given Obama more money and authority to enforce trade laws and tariff decisions. "We need to keep those ships from unloading that steel here."
Minnesota House Speaker Kurt Daudt, R-Crown, said the problem "is not partisan."
"This meeting was incredibly important for the long-term stability and sustainability of this industry here on the Iron Range," said Daudt. "It's a dire situation that has to be dealt with almost immediately."