–House Tax Chief Levin Says Geithner Determined To Work With China
–If Adm Fails In Yuan Reform, Admin and Hill May Act
–Financial Transaction Tax Not ‘Likely’
–Sees ‘Comprehensive’ Tax Reform Effort Next Year
–Idea of VAT Mostly Floated By GOP To Stir Contrversey

By John Shaw

WASHINGTON (MNI) – The acting chairman of the House Ways and Means
Committee Rep. Sander Levin said Monday that Treasury Secretary Tim
Geithner has told him the administration wants to press for reform of
China’s currency through a multilateral process.

In a speech at the National Press Club, Levin said that in a recent
meeting with Geithner, the Treasury secretary said he wants to work
through the G-20 to encourage China to reform its currency.

“He made clear that was how they were going to go,” Levin said,
referring to Geithner.

“They are going to try a multilateral process to help bring about”
a changed value to the yuan, Levin said.

But Levin said that he is convinced that if this multilateral
process does not yield results, the administration and Congress will
take other steps.

“If it (the multilateral process) doesn’t work, the U.S. will act.
I have no doubt about it. I think the administration will act and I
think the Congress will act,” he said.

He did not elaborate about what kind of action might occur.

Levin said he believes congressional criticism of China’s currency
policy “perhaps helps the Chinese understand the status quo is
unacceptable.”

Levin said that while analysts differ on the extent that the yuan
is undervalued, the fact that it is significantly undervalued is not in
dispute.

“China has rigged its currency … . The currency is a major tool
for them to get an advantage essentially over us,” Levin said.

On other issues, Levin said that he would like to see a serious
effort next year on “comprehensive” tax reform. He said that an effort
to pass a financial transaction tax is not likely to be mounted this
year.

Levin brushed aside suggestions that there is growing interest in
instituting a value-added-tax among congressional Democrats.

He said almost no one in the Democratic caucus has expressed any
interest in the VAT.

“I think its mostly being raised by Republicans for political
gain,” he said, adding that he believes discussion of the VAT will fade.

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

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