–Senate Approves Currency Bill on 63 to 35 Vote
–Senate Sends Currency Bill To Hostile House; Bill’s Fate Is Grim
–Senate GOP Derails Revamped Obama Jobs Plan on Procedural Vote

By John Shaw

WASHINGTON (MNI) – In votes that are both symbolic and
consequential, the Senate voted Tuesday to approve a currency bill that
is directed at China while rejecting a revamped version of President
Obama’s jobs package.

The Senate approved the currency bill on a 63 to 35 vote.

The bill now goes to the House where it’s likely to face a very
chilly reception.

House Speaker John Boehner has called the legislation “dangerous”
and has indicated that he is very unlikely to schedule a House vote on
the bill.

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.

After the Senate vote on the China currency bill, Senate
Republicans then blocked a motion to begin debate on Obama’s $447
billion jobs package as modified by Senate Democratic leaders.

The main change that Senate Democrats made to Obama’s plan was to
add a 5.6% surtax on household income above $1 million to pay for the
full cost of Obama’s jobs plan.

Senate Majority Leader Harry Reid called the package a “good jobs
bill.”

Senate Minority Leader Mitch McConnell blasted the president’s jobs
plan as a “second stimulus bill.”

Since 60 votes were needed to officially begin the debate, Senate
Republicans effectively derailed Obama’s plan.

Both Senate Democratic and Republican leaders have said they are
interested in passing jobs bills this fall, but the parties differ
sharply on the specifics of what should be approved.

Both the House and Senate are expected to vote on, and pass,
Wednesday pending bilateral trade agreements between the U.S. and
Panama, Colombia, and South Korea.

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

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