White House Chief of Staff Denis McDonough visits Iron Range to show support for laid-off workers

VIRGINIA — Laid-off Iron Range miners, company executives and a powerful group of Minnesota politicians lobbied White House Chief of Staff Denis McDonough on Tuesday to have the administration take tough action to resurrect the sagging U.S. steel industry.

"It speaks volumes that this robust and strong Range caucus is here … underscoring the importance and urgency of the situation," said McDonough, a Stillwater native who came to the region to get a firsthand account of the impact of what he called a global "steel dumping crisis."

McDonough's visit to the Mesabi Range College came at a crucial time for an area that has been socked by nearly 2,000 mining layoffs since the spring. The swelling unemployment rolls have pummeled an already fragile local economy.

Highlighting the urgency of the situation, the visit drew a bipartisan coalition of political luminaries, including DFL Gov. Mark Dayton, both Democratic U.S. Senators, U.S. Rep. Rick Nolan, DFL Senate Majority Leader Tom Bakk and GOP House Speaker Kurt Daudt, R-Crown.

Bakk, DFL-Cook, one of the region's most powerful defenders, showed visible emotion after the closed-door meeting with locals.

Bakk related how his son, who works for a mining company, told him, "Dad, I don't know if I'm going to be able to stay." Bakk said the families of laid-off workers had no sense of when or even if the industry might rebound.

Politicians have worked to extend unemployment benefits for the miners, but the community is asking President Obama to take a tougher stand against what they call unfair trade practices around the world, which they say are at the heart of the troubles locally. The glut of low-cost foreign steel is driving down prices and forcing U.S. mining operations to idle plants in record numbers.

More than half the region's 11 major mining operations have shut down, and locals fear that if and when they do reopen, they will employ fewer workers than before.

McDonough made no firm commitments, saying allegations of illegal dumping would have to be settled by independent legal entities, outside White House control.

Companies in some countries are still churning out government subsidized steel as the enormous Chinese economy falters, flooding the market with steel and further dragging down prices.

Minnesota's political leaders are seeking stiff tariffs on foreign steel, which would be a rare and politically fraught step. President George W. Bush imposed steel tariffs in 2002 that protected American steel, which critics derided for raising the price of goods that use steel, from automobiles to construction materials, without fixing the industry's fundamental problems. Many economists argue that tariffs merely redirect money from the country's most competitive industries to those with the most political clout.

Sen. Amy Klobuchar, whose grandfather was an Iron Ranger and who gets a lot of political support from the region, said this situation is different and more grave. She laid out the arguments for tariffs, calling a domestic steel industry necessary for national defense and crucial for the regional economy. She said the government intervention is badly needed to save families now wondering how they'll afford heat as winter descends.

"We've never seen anything like this, and we are concerned that this is a systemic breakdown," Klobuchar said.

If the industry continues to collapse unimpeded, it likely will not return, several officials said. Mining bankruptcies would cause long-lasting reverberations through the local economy due to the likely loss of pension income for retirees, Bakk said.

The Obama administration already appears to be paying more attention to the issue.

The U.S. Department of Commerce imposed preliminary tariffs on Chinese steel imports, after finding those steel products received unfair government subsidies that artificially lowered prices.

McDonough, one of the president's closest advisers, assured the assembled group that his presence was evidence of the issue's importance to Obama.

Dan Hill, of United Steelworkers Local 6860, who has been laid off since August, came bearing gifts for McDonough and his boss. Hill said he tossed two mining T-shirts to him during the private meeting.

"When you go back to Washington, wear that shirt with honor, and give President Obama the other one," he said.

Hill said the most important request he made of McDonough was to ensure that his children can have a future on the Iron Range.

The appearance by Daudt, the only Republican on the dais and an influential one, signaled that were could be some bipartisan consensus on dealing with problems on the Iron Range. "This is an issue that is not partisan," Daudt said. "It's a dire situation that needs to be dealt with almost immediately."

He said he was focused on long-term solutions, which he said would require the federal government to step in and protect American steel.

In a brief interview afterward, Daudt said discussions are ongoing about a possible special legislative session to provide aid for about 600 miners who are losing their unemployment benefits, though it's unclear whether the rest of the GOP caucus will go along.

U.S. Sen. Al Franken said McDonough's visit highlighted that Obama understands the importance of the problem. "I don't know how the chief of staff doesn't come back from this meeting with a powerful message," he said.

Hill, the unemployed miner, said the visit gave the region a jolt of encouragement.

"Before this meeting, there was no light at the end of the tunnel," he said. "The light has been re-lit."

J. Patrick Coolican • 651-925-5042