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.

Senators Urge House To Pass China Currency Bill

By Andrea Salazar

A day after the China currency bill passed the Senate, a bipartisan coalition of senators urged House Speaker John Boehner (R-Ohio) and the White House to join them against China’s currency manipulation. 

“China has a callous disregard for the rule of law,” Sen. Lindsey Graham (R-S.C.) said. “They cheat at every turn. They steal intellectual property, they counterfeit goods affecting our defense industries and they manipulate their currency. We don’t have this kind of discussion with normal nations. We don’t have this kind of discussion with democracies. You’re having this kind of discussion with a communist dictatorship with a command and control economy that’s acting like the mob.”

Graham echoed those sentiments and dismissed worries about China’s reaction to the currency bill.

“I’m not worried about the Chinese response because at the end of the day they need us as much as we need them, if not more so,” Graham said. “I’m worried about the idea that American politicians are going to let threats coming from China stop what, I think, is a rational approach to dealing with this.”

Sen. Chuck Schumer (D-N.Y.) said he expects the bill to pass, despite opposition from leadership.

“We have tried to keep this as non-political, frankly, as possible,” Schumer said. “That’s because we believe in this. I just believe in my bones that this is one of the five ways… to keep America number one over the next several decades.”

Pelosi: U.S. In Abusive Relationship With China

By Andrea Salazar

House Minority Leader Nancy Pelosi (D-Calif.) Thursday urged Congress to tackle the China currency manipulation bill before dealing with trade agreements.

“I can say flat out, with all the respect that I have for the people of China, with all the importance I place in our relationship and the fun I had digging to China when I was a child on the beach…we are in an abusive relationship with China when it comes to trade,” Pelosi said.

Speaking to reporters at her weekly briefing, Pelosi said Congress should pass the Currency Exchange Rate Oversight bill “not to be protectionist but to be self reliant.”

The minority leader also commented on the supercommittee, asking them to “have as its centerpiece an initiative for growth, for innovation, for entrepreneurship” because “creating jobs through the private sector, through the small business is the way to better the economy.”

As a representative from California, she also spoke about Steve Jobs’ death calling him a “visionary genius” who was able to connect with different generations.

Boehner: Obama Has Given Up Governing

Speaker of the House John Boehner accused President Obama of having “thrown in the towel” on governing to turn his focus to campaigning for reelection at a Washington Ideas Forum Thursday.

“Mr. President, why have you given up on the country and decided to campaign full-time?” Boehner asked.

Disappointed with the summer’s negotiations on the debt ceiling limit, the Speaker said he continues to be willing to “sit down with the President any day, any time to seek common ground” and even put revenues on the table as long as the President agrees to address entitlement reform.

“It takes two to tango, and the President never said ‘yes,’” Boehner said.

A couple topics where Boehner and Obama can agree on, however, are Afghanistan and the Chinese currency manipulation bill.

Boehner reinforced his argument against passing the Currency Exchange Rate Oversight Bill that would punish countries like China for manipulating their currency, something he says the President agrees with.

“For the Congress to pass legislation to force the Chinese to do what is arguably very difficult to do I think is wrong, is dangerous and could start a trade war,” he said.

The Speaker is also supportive of Obama’s decisions in Iraq and Afghanistan saying Obama “has done just fine” in continuing to take on the Taliban and al-Qaeda.

As for the super committee he helped create to find $1.5 trillion in spending cuts, Boehner said he is “firmly committed to ensuring that the [committee] come to an outcome,” emphasizing that no one wants automatic spending cuts to happen.

Boehner also commented on the Republican presidential campaign supporting Sarah Palin’s decision not to run for president in 2012. 

“She made the right decision for herself,” he said, but added that he hopes Palin will campaign for other Republican candidates.

Ohio Democrat Promotes China Currency Measure

By Andrea Salazar

Sen. Sherrod Brown (D-Ohio), described his Chinese currency manipulation bill as the most important jobs bill in Congress this year.

“China manipulates its currency so Chinese companies can make and sell Chinese products cheaper, much cheaper than U.S. companies can,” Brown said during a conference call with reporters on Wednesday.

To change that, Brown introduced the Currency Exchange Rate Oversight Bill with co-sponsors from both parties. Pointing out that U.S. workers are losing their jobs to China, Brown said that “Uncle Sam’s turned into Uncle Sap, and it’s time we fight back.” 

A vote is expected in the Senate within the next week.  

“This bill doesn’t cost tax payer dollars, it actually will help reduce the budget deficit. So other than those who want to stand with companies that outsource jobs to China, I don’t see where any real opposition to this bill should come from,” Brown said. 

However, Speaker of the House John Boehner (R-Ohio) dismissed the need for the bill.

“I think its pretty dangerous to be moving legislation through the United States Congress forcing someone to deal with the value of their currency,” he said earlier this week.