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.