China Currency Bill Invades Armed Services Committee Hearing

A House Armed Services hearing that was supposed to focus on the economic effects of a trimmed Defense budget turned into a debate over a China currency bill that was recently approved in the Senate.

While the other economists on the panel focused on how further cuts to defense will impact the U.S economy regionally and nationally, Peter Morici, a University of Maryland economist, turned his attention toward what he referred to as China’s mercantilism and currency manipulation.

“China abuses the WTO system and flaunts free-market principles with high tariffs and domestic institutions that systematically block U.S. and EU exports,” Morici said. “All of this has imposed a large and growing bilateral trade imbalance that destroys millions of U.S. manufacturing jobs…and makes the United States less capable of maintaining defense capabilities necessary to meeting its security obligations and accomplish its legitimate security goals.”

When challenged by committee member Rep. Roscoe Bartlett (R-Md.) as to what his opinion on the China currency bill has to do with the focus of the hearing on the economic effects of military cuts, Morici responded that America will not be able to afford defense, in any regard, if China’s mercantilism continues to threaten a struggling U.S. economy.

“If we don’t address the China currency problem, we’re making the defense problem impossible,” Morici said.

“China’s mercantilism, anti-democratic values and soft approach to civil and human rights making will be seen an attractive comprehensive package, necessary for ensuring economic prosperity and personal security,” Morici said. “Americans and their values and institutions will become isolated and unable to compete. America will be more isolated and dramatically weakened.”

The China currency bill passed the Senate Tuesday on a bipartisan 63-35 vote and is currently awaiting . The White House has yet to take a formal position on the matter.

Armed Services Chair: No Defense Cuts And No Tax Increases

By Adrianna McGinley

In a press conference Thursday, Republican members of the House Armed Services Committee announced the recommendations they’ll make to the Congressional supercommittee, primarily their desire to see no further defense cuts.

Armed Services Committee Chairman, Rep. Buck McKeon (R-Calif.), said defense has already taken more than enough cuts and no more will be accepted.

“One of the things we heard was that everything should be on the table, and while many of us on the Armed Services Committee didn’t agree with that, we understood where the American people were,” McKeon said. “I personally, and I think many members of the committee, feel that we have gone overboard on the cuts…defense was on the table, and in the first round, it took up half of the table.”

Rep. Duncan Hunter (R-Calif.) said more cuts would put the military in a position of having to choose where to engage and where not, putting national security at risk.

“I don’t think the American people understand, and they need to, what these defense cuts mean,” Hunter said. 

Rep. J. Randy Forbes (R-Va.) pointed out the effect cuts would have on the average American, saying if more cuts are implemented, using conservative estimates, there would be job losses exceeding the number of unemployed people in 13 different states combined.

When asked if tax increases would be accepted in place of defense cuts, McKeon said, “there is no one here who would vote for tax increases.” He added, “I don’t think it’s our job on this committee to do the super committee’s work of solving their problem … I don’t need to help them and try to give them ideas.”

Standing committees are set to formally present recommendations to the super committee tomorrow.