–Senate Currency Bill Faces Very Uncertain Future In The House
–Sen. Schumer: Failed To Get ‘Agreement’ With Admin on China FX
–Sen. Graham: ‘Very Important’ That House GOP Allows China FX Vote
–Sen. Graham: ‘Confident’ FX Bill Would Get 350 Votes in House

By John Shaw

WASHINGTON (MNI) – Leading Senate supporters of a currency bill
that sailed through the Senate on Tuesday are now urging House
Republican leaders to reconsider their opposition to the bill.

The Senate approved the bill Tuesday on a 63 to 35 vote. But it
faces a very uncertain House fate.

House Speaker John Boehner has called the measure “dangerous” on
several occasions and has indicated that it will not be considered by
the House. He said Wednesday the bill would cause the “severe risk” of a
trade war with China.

At a Wednesday briefing, Democratic senator Chuck Schumer and
Republican senator Lindsey Graham took turns hammering the Chinese
government for “manipulating” its currency.

Both urged Boehner to reconsider his opposition to bringing up
currency legislation in the House.

“This is good, solid legislation,” Graham said, adding that it is
“very important” for House Republican leaders to bring up the currency
bill this year.

Graham said he is “confident” that the bill would get 350 votes if
it is voted on by the House.

He also said that American policymakers should not pay attention to
threats from China. “They need us just as much as we need them, if not
more so,” Graham said.

“China only moves when you push,” Graham said.

Schumer said that Boehner is “behind the times” in his opposition
for the China currency bill. “The votes are there in the House” to pass
the bill, Schumer said.

He said that he tried to reach an agreement on currency legislation
with the Obama administration, but the administration wanted a much more
flexible bill than he could accept.

“It has to be a bill with teeth,” Schumer said.

At the briefing, lawmakers dispensed with diplomacy and at times
even civility.

Graham savaged Chinese leaders as “Communist dictators.”

In a complex metaphor, Democratic senator Sherrod Brown appeared to
liken the Chinese leadership to a “pack of dogs” that would only respond
when hit with a hard object.

Opponents of the currency bill in the Senate derisively referred to
the China currency bill as the “China Trade War Act of 2011.”

The White House has not yet taken a clear position on the Senate
currency bill, but President Obama has said any currency legislation
must be WTO compliant.

The Senate legislation requires Treasury to develop a biannual
report to Congress that identifies two categories of currencies: a
general category of “fundamentally misaligned currencies” based on
objective criteria and a smaller group of “fundamentally misaligned
currencies for priority action” that reflect misaligned currencies
caused by clear policy actions by the relevant government.

The bill would automatically threaten economic sanctions if the
Treasury Department finds that a trading partner’s currency is
“misaligned” due to intentional policy actions of a government. In the
past, Treasury has steadfastly declined to label China a currency
manipulator.

Under the Senate legislation, countervailing duties would be
available to any U.S. industry that could demonstrate it has been
“materially injured” by imports from the country with the undervalued
currency.

** Market News International Washington Bureau: (202) 371-2121 **

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