[Congressional Record Volume 157, Number 146 (Monday, October 3, 2011)]
[Senate]
[Pages S6020-S6027]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CURRENCY EXCHANGE RATE OVERSIGHT REFORM ACT OF 2011--MOTION TO PROCEED
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of the motion to proceed to S. 1619,
which the clerk will report.
The assistant legislative clerk read as follows:
Motion to proceed to the consideration of S. 1619, a bill
to provide for identification of
[[Page S6021]]
misaligned currency, require action to correct the
misalignment, and for other purposes.
The ACTING PRESIDENT pro tempore. Under the previous order, the time
until 4:30 p.m. will be equally divided and controlled between the two
leaders or their designees.
The ACTING PRESIDENT pro tempore. The Senator from New York.
Mr. SCHUMER. Mr. President, I rise today in strong support of S.
1619, the Currency Exchange Rate Oversight Reform Act. First, I want to
say this bill is the culmination of years of hard work and
collaboration between Democrats and Republicans. I thank Senator
Lindsey Graham of South Carolina. He and I have been partners in this
endeavor for over 5 years. We have traveled to China together. We have
worked long and hard to try to gain some fairness in the way China
treats American industry, particularly in regards to currency.
I thank Senator Sherrod Brown and Senator Debbie Stabenow. Both made
very valuable additions to the proposal on the Senate floor today. In
fact, Senator Brown is the lead sponsor of this legislation because of
the strong and good work he has done. They both have worked long and
hard, realizing the industries in their States are at such a
competitive disadvantage.
I thank my colleague, Jeff Sessions, as well, who has been one of our
partners and leaders on this legislation over the last several months,
and lead sponsors in addition: Bob Casey, Olympia Snowe, Jeff Sessions,
Kay Hagan, and Richard Burr, as well as dozens of other cosponsors on
this bill for their work on this issue for many years.
I also want to particularly express my appreciation to Chairman Max
Baucus and former ranking member of the Finance Committee Chuck
Grassley for their leadership and work on currency manipulation. We
believe our bill is WTO compliant, and it is in part because Senators
Baucus and Grassley looked at our original bill and worked with us on
suggestions as to how to change it to make it just as effective but
within the rules of WTO.
Today we have an opportunity to help put middle-class Americans back
to work and, amazingly enough, in a bipartisan way. Today we stand
together to defend American jobs against market-distorting, job-killing
exchange rate policies that subsidize foreign manufacturers at the
expense of American manufacturers. These currency policies artificially
raise the price of U.S. exports and suppress the price of Chinese
imports into the United States, undermining the economic health of
American manufacturers and their ability to compete at home and around
the globe.
China is by far the biggest exploiter of predatory currency
practices, but our bill does not target China or any one country. Our
bill, rather, says there will be consequences for any country that
engages in currency manipulation to gain an unfair advantage over
American businesses.
It has been 10 years since China joined the WTO. In those 10 years
the Economic Policy Institute estimates that 2.8 million American jobs
were lost or displaced in manufacturing or other trade-related
industries as a result of increased trade with China and the Chinese
Government's manipulation of its currency. My State of New York has
suffered some of the biggest losses, with over 161,000 jobs lost or
workers displaced since 2001. Accession to the WTO was supposed to
bring China's policies in line with global trade rules meant to ensure
free but fair trade. Instead, China has single-mindedly flouted those
rules to spur its own economy and export-oriented growth at the expense
of its trading partners, most of all the United States.
Our economic relationship with China needs a fundamental change. It
is not just in currency, although that is the No. 1 issue. On issue
after issue, whether it is poaching intellectual property, unfairly and
illegally subsidizing Chinese businesses, monopolizing rare earths, not
allowing American companies to compete in China--on issue after issue
China is mercantilist, plain and simple. They use the rules of free
trade when it benefits them and spurn the rules of free trade when it
benefits them. For years Americans have grimaced, shrugged their
shoulders, but never done anything effective to in large measure stop
the Chinese pursuit of unfair mercantilism.
Six years ago I was in upstate New York and a steel manufacturer told
me they could compete against Chinese steel just fine, even with labor
costs being lower in China, except for the fact that China manipulated
its currency and gave Chinese steel imports a 30- to 40-percent
advantage. The owner of the company, providing 300 good-paying jobs,
pleaded with me to do something. I happened to speak with Senator
Graham, and he was finding the same situation with industries in his
State of South Carolina.
We began our crusade to get China to behave fairly. At first, people
did not even accept the fact that currency manipulation was wrong and
harmful to America. I remember at one point, within a short period of
time, both the New York Times editorial page--a decidedly liberal
editorial page--and the Wall Street Journal editorial page--a decidedly
conservative editorial page--said China should not have to let its
currency float, even though it is a tenet of free trade since Bretton
Woods that said the way to correct large imbalances in trade is to let
a currency readjust by floating.
We spent years convincing America, convincing our colleagues that
this manipulation of currency dramatically hurt America and was unfair
and against all tenets of free trade. We have achieved that goal. Now
the editorials may pick reasons they do not like our particular bill,
but they say: Oh, yes, we have to deal with Chinese currency
manipulation.
But when we ask people who say: Don't do your bill, deal with it a
different way, we say how? No one has another answer. It was true that
our initial bill introduced 5 years ago was a blunt instrument to bring
attention to the issue. It was our hope then not to pass the
legislation--in fact, we allowed cooling off period after cooling off
period in the legislation--but, rather, simply to get the Chinese to
act. But about after 3 or 4 years, Senator Graham and I became
convinced that China would not act. When there was real pressure they
might move the currency a little bit, but then they would back off.
The same proved true in other areas where China unfairly treats
American industry, so we came to the conclusion that legislation was
the only answer, no one having a preferred or even seemingly possibly
effective alternative. So we worked, as I said, with Senator Baucus and
Senator Grassley and came up with a proposal we believe meets WTO
rules.
Then, because Senator Stabenow had worked long and hard on this issue
along with Senator Collins, we combined her proposal and our proposal.
Hers was mainly focused on the Banking Committee, Commerce Department,
ours on Treasury. Then a year or two ago, Senator Brown and Senator
Snowe had an additional proposal, and we have combined all of these
proposals into one workable bill that will finally get fairness for
American companies.
Over the past 6 years we have been sending a message to the Chinese
Government about their exchange rate policies. Every Treasury Secretary
since we began this crusade said: You know what. Let me just talk to
the Chinese. I can bring reason to them.
They did it with the best of intentions and the best of hopes, every
Treasury Secretary--casting no aspersions on any of them because the
fault was China's, not ours--and could not get progress at all.
So it is down to this. If we want American companies to have a fair
chance of competing, this is the solution. Not everyone will agree with
every jot and tittle in this bill, but I think the vast majority of my
colleagues will agree with its thrust and the need to do more than we
have been doing. For that reason I am hopeful that large numbers on
both sides of the aisle will vote for this motion to proceed so we can
begin debating this measure and listen to some amendments if people
have ideas as to how to change it.
Let me go over our bill. Our bill is intended to give the
administration additional tools--this administration or any--to use if
countries fail to take steps to eliminate currency misalignment. The
bill would prohibit Federal procurement of products or services
[[Page S6022]]
from a country that fails to adopt appropriate policies or to take
identifiable action to eliminate currency misalignment.
Our bill also uses U.S. trade law to counter the economic harm to
U.S. manufacturers caused by currency manipulation. The artificially
low value of the yuan--economists estimate it is anywhere from 20 to 40
percent less than what it should be--amounts, as is well known now, to
a subsidy on Chinese exports and a tariff on imports from the United
States and other countries to China.
Under existing trade laws, if the Commerce Department and the
International Trade Commission find that subsidized imports are causing
economic harm to American manufacturers and workers, the administration
must impose duties on those imports to offset or countervail the
benefit conferred on foreign producers and exporters by government
subsidies. Commerce already has the authority under U.S. law to
investigate whether currency undervaluation by a government provides a
countervailable subsidy, although it has failed to do so despite
repeated requests by industry after industry to investigate.
Our bill specifies the applicable investigation initiation standard
so Commerce can't just turn its back on these companies, and it will
require Commerce to investigate whether currency undervaluation by a
government provides a countervailable subsidy if the U.S. industry
requests the investigation and provides the proper documentation.
Our bill also clarifies that Commerce may not refuse to investigate a
subsidy allegation based on the single fact that a subsidy is available
in circumstances in addition to export.
Our bill also uses the term ``currency misalignment,'' but it is not
just a term. Administrations, both the Bush administration and the
Obama administration, have, to the amazement of many Americans, refused
to label China a currency manipulator. But manipulation is a subjective
standard involving intent. What we do is refine that concept and go for
misalignment. We believe misalignment is the appropriate standard. That
is not subjective. It is not saying why the currency is misaligned or
how or who did it. It is simply saying that it is. It is a narrower
standard. It is a standard that is harder to wriggle out from under if
anybody, any government official is intent on not enforcing the rules
we think necessary to get the Chinese to act. So the bill is carefully
thought out. The decimation of our middle class, our manufacturing
sector, and the American economy as a whole is due in part to
developing countries such as China employing currency manipulation and
other aggressive mercantilist tactics to tilt the field in their favor.
In the absence of action by the administration, we have a
responsibility to protect the interests of American workers and
companies.
One of the questions that is raised is, Is our bill WTO compliant? We
believe it is. We have worked hard to ensure this. The bill provides
the President with flexibility to waive any consequences that might
have an adverse impact on the U.S. economy. The bill also continues to
allow the U.S. Government trade officials to do their job and make the
decisions on the basis of facts argued before them. We have talked to
many experts in the field. They too believe our bill is WTO compliant.
What do the critics say? No one criticizes the idea that China has
manipulated its currency. No one criticizes the thought, the actuality
that China manipulates its currency. Almost everybody thinks not enough
is being done. The main argument against our bill is not the bill
itself, but critics of the bill worry that maybe this could start a
trade war with China. Well, I have news for them: We are already in a
trade war with China, and we are losing. China, by its mercantilist
policies on currency above all but on rare earth and intellectual
property, unsubsidization of homegrown industry, on exclusion of
American exports where we might have advantage, is already engaged in a
trade war, and the result is that millions of Americans do not have
jobs who should. The result is that hundreds of billions of dollars
flow out of America and into China. If we do not do anything about
this, our country will be hurt badly, perhaps irreparably.
Some argue, as did the Washington Post today, that it will not have
much of an effect because the industry of China has to revalue its
currency; these industries will go to places such as Bangladesh. They
are making an argument that is 5 and 10 years old and stale. We are not
arguing about labor-intensive industries such as clothing or shoes or
toys. Those are going to Bangladesh already, with the cost of Chinese
labor going up. China uses its currency manipulation against our top-
notch manufacturers. The large companies say nothing because most of
them have plants in China, so they can get around it, but middle- and
small-sized manufacturers are up against this wall and are desperate
for our help.
One manufacturer in upstate New York makes a very advanced product
that deals with cleaning pollutants as they go through a power system.
It is a top-notch product. This manufacturer, who employs a couple
hundred people in upstate New York, said to me: China's stealing my
stuff even though I have patents and other things on it. They are
stealing the method by which we do this. He said: I could live with
that if they just sold the stuff in China. We are not big enough to
export all around the world. Instead, what they do is steal our
intellectual property on this, and then they come back and sell it in
America at a 30-percent discount because of currency manipulation. How
am I going to compete with that?
There is story after story just like that. When American companies
are fighting for their survival and battling subsidized Chinese
exports, including high-end exports, this is no longer an argument
about labor-intensive industries alone.
I, for one, am not prepared to raise the white flag on American
manufacturing and on American jobs, and neither should anybody else. I
know American manufacturing can compete successfully against Chinese
competition at home, in China, and around the world but only if the
playing field is level, and our bill helps to level that playing field.
Critics of our bill say that while currency manipulation is an
important issue, legislation to address it would ignore the many and
growing challenges we face in China. The critics are wrong. We have no
intention of ignoring the range of China's market-distorting practices,
the ones I mentioned before. In fact, because China was emboldened on
currency, which the whole world--Brazil, just a week or two ago, asked
China to stop manipulating its currency. The European Union feels the
same way we do. Nobody does anything, so China is emboldened to pursue
mercantilist policies in other areas. Just recently, they have become
involved in rare earths. They tell American manufacturers: If you want
rare earths, you would be a lot better off sending your plant to China.
It is just unheard of.
Critics of our bill say it is unlikely to create any incentive for
China to modify its exchange policies. The experience Senator Graham
and I have had is that when China thinks something might be done, they
begin to let their currency rise. Because nothing permanent is done,
they go right back to their old habits as soon as the pressure is off.
This idea that if we pressure the Chinese, they won't do it makes no
sense. If we pressure them, they do nothing, and if we don't pressure
them, they do nothing. The only answer is concrete legislation.
What would those who oppose this bill have us do? What is their
suggestion? They do not really have one. Should we continue to sit back
and watch while American jobs and American manufacturers and even large
chunks of American wealth just drift away? Should we continue to, as
one of my constituents put it, be not Uncle Sam but Uncle Sap? Well,
there are too many of us in this Chamber on both sides of the aisle who
will not sit back and continue to let mercantilist trade practices
continue to decimate American manufacturing and American jobs--middle,
low, and high--nor will my colleagues here in the Senate. Democrats and
Republicans are united on this issue. We must take decisive action
against China's currency manipulation and other economically injurious
behavior. The fact that they manipulate their currency imbalances the
whole world trading system. Many
[[Page S6023]]
economists list it as one of the reasons we had the decline in global
trade in the worldwide recession. We simply have no choice but to right
the wrong China is committing.
Any retaliation by China would be further evidence of their
unwillingness to meet their obligations under the WTO and the global
trade community. By the way, China has a lot more to lose with
retaliation than we do. If there is one country that gains the most by
exporting to the United States by international trade, it is China.
They are very smart, and they are not going to cut their nose to spite
their face.
I wholeheartedly support the President's goal of doubling U.S.
exports over the next 5 years, but that cannot be done if we do not
take concrete action to address the protectionist practices of foreign
governments that concede tariff reductions only to replace tariffs with
massive currency manipulation, border taxes, and a variety of state
subsidies. We will not do it unless we get to the root cause.
China's currency manipulation would be unacceptable even in good
economic times. At times of high unemployment, we can no longer stand
for it. There is no bigger step to create American jobs that we can
take than to confront China's currency manipulation. It is not a
Democratic or Republican issue. Every one of us has manufacturers,
companies that are struggling to compete at home and abroad with
Chinese exports with a built-in price advantage. It is not China
bashing. It is about fairness and defending American jobs.
Many of us and most Americans are worried about how things will be in
10, 20 years from now. Will America stay the leading economic power of
the world? Will our children have a better life than we do? The No. 1
thing we have to do is change things at home to make that better, there
is no question about it. Very high on the list as well is making sure
China no longer unfairly sucks millions of jobs and hundreds of
billions of dollars of American wealth to its shores. What China does
will make our job of keeping America strong, of having the next
generation live a better life than this generation far more difficult
unless we force them to change. They will not change on their own.
Passage of this legislation will lead to real consequences for
countries that unfairly manipulate their currency. We have waited a
long time. We have declined to move the legislation at the request of
two administrations. Patience--not of us but of the American people--
has worn out. I ask my colleagues to stand with us on S. 1619. Stand up
for American manufacturing, for American jobs, for American wealth.
Stand up so our children can have an even brighter future than we have.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Utah.
Mr. HATCH. I have enjoyed the remarks of my distinguished friend from
New York.
As we begin the debate today on the important issue of exchange rate
misalignment, although it is an important debate, I seriously question
its timing.
Let's step back for a moment. At the end of last month, the Senate
approved legislation renewing and expanding trade adjustment
assistance. We need to be clear about what this program is--a big
government spending program of dubious value but one that is important
to President Obama's union allies. Not surprisingly, given the heft
labor unions wield in the liberal political coalition, this spending
program is President Obama's top trade priority, so much so that he was
even willing to abandon our allies in Colombia, Panama, and South Korea
unless he secured this additional spending. To get more government
spending for big labor, the President was willing to hold up the three
free-trade agreements with Colombia, Panama, and South Korea that
everyone knows will grow this economy and create jobs.
I was happy to chat with the Trade Representative a few minutes ago,
and he told me he was going to send those three trade agreements up
today, and they should be here between 4 p.m. and 5 p.m. I am really
happy about that because it is way beyond time to get them here.
Americans need to remember this episode when they hear the President
talk about his commitment to job creation. Put aside all the talk, and
it is clear where the rubber hits the road. The President will
prioritize government spending over private sector job growth.
Still, because of the President's insistence on this spending
program, the TAA bill is likely to pass the House and become law. So
here is my question: Given that we just debated a trade bill that we
knew would likely become law, why was this currency bill not considered
in that context? I can only conclude either that the administration
opposes the currency bill and therefore asked that it not become part
of TAA or that the consideration of this bill is merely a political
exercise with little expectation that it ever will become law. With
millions of Americans out of work and the economy stagnant, the people
of Utah and all American citizens deserve more than political
grandstanding.
Regarding the substance of the issue, the manipulation of currency
values by major trading partners in order to gain unfair trade
advantage represents a genuine threat to U.S. jobs and to rebalancing
of the global financial and economic system. For many years and
continuing into the present, that threat is a reality. There is
virtually unanimous agreement among international analysts that there
exists large-scale, prolonged, one-way intervention in exchange markets
by some of our important trading partners in order to limit or preclude
currency appreciation, primarily in China but also in some of the other
economies as well. There also seems to be little question that China
manipulates its currency in order to subsidize its exports.
The bill before us seeks to address exchange rate misalignment
specifically and global imbalances generally by sharpening the tools
available to counter currency manipulation by a trading partner. Of
course, any additional tools we can construct must be carefully crafted
to align with all of our international trade agreements and global
rules of trade.
The issue of China's currency has been with us for far too many
years.
The issue of China's currency has been with us for far too many
years. We have repeated discussions about how to address lack of
appreciation of China's currency, followed by diplomatic bilateral
discussions assurances of moves from China to allow appreciation some
modest subsequent appreciation while the political heat is on, and
little change thereafter once the heat subsides.
This approach does not seem to be working. We have had large and
persistent bilateral trade deficits with China, and those deficits
continue. We have relied on China's massive excess savings to finance
our growing debt, and we have worsened that reliance given the debt-
fueled spending spree of the current President. China's dollar-
denominated reserve holdings, which have grown for many years, have
ballooned from around $1.9 trillion when President Obama took office to
over $3 trillion, according to some recent estimates--a 50-percent
increase.
But currency misalignment by China is not the only source of global
financial and economic imbalances. If the President looked in the
mirror, he would see his own responsibility for global economic
uncertainty. Our budget deficits have far exceeded $1 trillion for the
past 3 fiscal years. For 2011, the deficit is expected to be around
$1.3 trillion, which is an unsustainable 8.5 percent of GDP and the
third-largest deficit in the past 65 years, exceeded only by the
deficits in 2009 and 2010. Deficits of this magnitude have not been
seen since the years surrounding World War II, when virtually the
entire economy was being directed by the Federal government. Given our
budget deficits and the China currency issue, the important question
is: What is being done?
Let's look at what is being done with a bit of recent history for
context. Back in 2008, then-candidate Obama wrote the following to
textile organizations:
The massive current account surpluses accumulated by China
are directly related to its manipulation of its currency's
value. The result is not good for the United States, not good
for the global economy, and likely to create problems in
China itself.
He went went on to promise that, if elected, he would use all
diplomatic
[[Page S6024]]
means at his disposal to induce China to change its foreign exchange
policies. He promised to beef up U.S. enforcement efforts against
unfair trade practices.
Also, back in 2009, during the Treasury Secretary's confirmation
hearing before the Senate Finance Committee, now-Secretary Geithner
stated that:
President Obama--backed by the conclusions of a broad range
of economists--believes that China is manipulating its
currency.
Those are strong words. Yet once in office, the President and
Secretary Geithner failed to follow up on those words with action. The
Administration promised to usher in an era of change but failed to
change the way the U.S. deals with the China currency issue.
The Omnibus Trade and Competitiveness Act of 1988 requires that the
Treasury Secretary report on exchange rate policies of major U.S.
trading partners. Under the act, Treasury must consider
whether countries manipulate exchange rates for purposes of preventing
balance of payments adjustments or gaining unfair trade advantage.
The evidence clearly seems to show that China's currency policies
amount to manipulation leading to an unfair advantage in international
trade.
Candidate Obama agreed during his campaign.
Treasury Secretary Geithner agreed during his confirmation testimony.
Yet, as Treasury Secretary and as President, the two have refused to
act.
Secretary Geithner has issued five foreign exchange reports, but has
refused to label China as a country that manipulates its exchange rate
for the purpose of gaining unfair competitive advantage in
international trade. Let me repeat that, despite many bold claims about
using all the tools at their disposal to counteract China's trade
policies, the administration refuses to designate China's policies as
being consistent with currency manipulation for trade advantage. The
question that I and most of my colleagues from both sides of the aisle
have is: Why?
Clearly, the administration must recognize the consequences of
China's manipulation for American workers and manufacturers and for the
stability of the global financial and economic system. Why, then, is
the administration protecting China by refusing to designate it as a
currency manipulator?
Under the Omnibus Trade and Competitiveness Act, once a country is so
designated, there are no draconian actions required. The immediate
repercussions are merely stepped-up monitoring and greater vigilance in
dialogue. Those don't seem to be things that would lead to currency or
trade wars.
So, why doesn't the administration act?
After all, American jobs are at stake. American workers can compete
with any workers in the world, but our workers should not have to
compete against foreign firms that receive massive subsidies. If the
President is as intent on focusing on job creation in America as his
campaigning suggests, then why has he refused to take such a simple
step as designating known, existing currency manipulation?
There is a severe mismatch here between political rhetoric and
action.
My fear is that the administration's overreliance on overseas
funding--in particular from China--to finance their exploding deficits
is preventing the President and his officers from acting on behalf of
the competitive, but struggling, American workforce.
It is well past time for the administration to recognize the negative
consequences of China's manipulation for American workers and
manufacturers, and for global stability.
Even though there has been only tepid support, even on the Democratic
side of the aisle, for the President's much touted jobs plan, there is
bipartisan agreement that Congress needs to take significant actions to
address the massive jobs deficit this Nation is facing. We face a
national crisis in having unemployment persisting at over 9 percent,
with elevated numbers of the unemployed suffering from long-term bouts
of joblessness and with many American workers having become so
discouraged that they have simply dropped out of the labor force.
According to statements by the majority leader of the Senate, a
focus on jobs is precisely why we are considering the bill before us.
According to one of those statements, the majority leader is reported
as having said that ``I don't think there's anything more important for
a jobs measure than China trade.''
I am starting to think my friends on the other side of the aisle are
like the gang that couldn't shoot straight. The majority leader thinks
that addressing China trade is essential to job creation. But based on
its failure to use existing tools available to designate China as a
currency manipulator, the administration apparently disagrees or it
would have long ago used its authority to make such a designation under
the Omnibus Trade and Competitiveness Act and then acted on the
problem.
The President's focus seems to be elsewhere. He seems to think that
at least as important for jobs as the issue of China trade identified
by the majority leader is his so-called American Jobs Act.
Advertisements by the Democratic National Committee and campaign
speeches by the President since he announced it in a joint session of
Congress early last month tell us quite clearly that we should ``meet
our responsibilities'' and consider that Act ``right away.''
Yet my friends on the other side of the aisle apparently believe that
a political debate over China and its currency policies are more
important for job creation than the President's American Jobs Act.
If the President's act is, as advertised, so crucial for job creation
in the face of our national unemployment crisis, why is Senate
Democratic leadership delaying its consideration? Why not consider the
legislation right away, as demanded by the President in his
campaign speeches and Democratic National Committee advertisements?
We are told by the President that Americans who are out of work
cannot wait until the next election for us to act boldly for job
creation. So why are we not considering his American Jobs Act, unless
my Democrat friends disagree with the President that the act would be
the most important job creator available to us today?
I suspect they know that the $447 billion in new stimulus spending
included in the President's jobs bill, and the accompanying proposals
to impose $1.5 trillion in new taxes on a sluggish economy, is
economically counterproductive and a sure-fire political loser.
I must say that the President's Jobs Act looks like more of the same
debt-fueled stimulus spending, cloaked under the guise of
``investment,'' along with higher taxes, cloaked under the label ``tax
reform.''
While I may disagree on the particulars of the President's proposal,
I do not disagree with his premise that we face a national crisis in
our labor markets and that we should be debating measures that will
promote American job creation now, without delay.
We are also told by the President that we must pass our pending trade
agreements with Colombia, Panama, and South Korea. Jobs are at stake,
he says. As with the political campaign rhetoric exhorting Congress to
pass the President's American Jobs Act, which the majority leader has
opted to shelve until some unspecified future date, the President
delayed the action required to get these agreements passed for much too
long.
Pass the American Jobs Act, the President scolds.
But we can't because the Democrat's majority leader has not brought
the Act to the Senate floor. The currency bill, which is unlikely to
lead to much, if any, job creation before the next election, has come
first, perhaps to allow more time for campaign speeches and ads by the
Democratic National Committee.
Pass the free trade agreements, the President lectures. But they were
delayed, as they sit idle on his desk.
I am pleased, since the trade leader in the administration called me
a few minutes ago to tell me they are on their way up here today.
This currency bill is coming first. But what needs to come first is
job creation, not electioneering and politics.
Our jobs deficit is a full-blown national crisis. The unemployment
rate has been persistently above 9 percent since April of this year. It
has averaged 9.4 percent since the President took office. It has been
above 9 percent in 26
[[Page S6025]]
out of the 31 months since the President took office, despite promises
by administration economists that the massive debt-fueled stimulus,
which will cost over $1 trillion when all costs are included, would
keep unemployment contained below 8 percent. And the unemployment rate
is even higher, at over 16 percent, once we include, for example,
people who want to work but have become so discouraged that they no
longer look for work.
Nearly 14 million workers are unemployed, and the number grows when
we include discouraged workers. The number of long-term unemployed
workers has been at record highs. According to Census data released
last month, those in their twenties and thirties are suffering from the
highest unemployment rate since World War II. The enthusiasm of young
citizens in 2008 long ago gave way to disappointment and disaffection.
Our joblessness crisis is nothing short of a crisis for liberty. When
American men and women do not have jobs and opportunity, their freedom
to make lives for themselves is eroded. Yet we are to understand that
in the face of this historic crisis, there is no more important issue
regarding jobs than our bilateral trade with China.
Again, I agree we need to address the issue of currency manipulation
and our sustained and large trade deficits with China. However, let us
be clear that dealing with issues related to China involves only one
bilateral trade relationship. The trade and current account problems
facing the United States, and the global financial, trade, and economic
imbalances that everyone faces are not solved by addressing this one
trading relationship. That is one reason I will be offering an
amendment to this bill calling for multilateral and plurilateral
negotiations to address currency misalignment. If we are going to
succeed, we need to look at the big picture and work with our allies to
counter China's current practices. I will discuss my amendment in more
detail soon, but hope it will receive strong bipartisan support.
Our trade imbalances are not with China alone. Rather, as part of the
problem of saving too little, the United States has multilateral trades
imbalances which require more action than focusing solely on one
bilateral relationship.
According to recent data from the U.S. International Trade
Commission, the United States has trade deficits with nearly 100
countries. The United States saves too little, and that problem will
not be solved solely by passing the bill before us.
Make no mistake, the legislation we are considering can provide
useful tools for addressing concerns about China, if the administration
actually uses the tools. But those tools alone are not sufficient. If
we try to address our multilateral problems by putting pressure on
China alone, without also attending to our lack of saving and our own
role in generating trade deficits with nearly 100 other countries, the
Chinese piece of the U.S. imbalance will migrate somewhere else. This
bill is not a magic bullet to solve our problems or the problems
arising from global imbalances. And it almost surely is not the highest
priority piece of legislation if job creation is truly our focus.
The United States, for its part, contributes to global imbalances by
persistently saving too little. Following the financial crisis, which
was precipitated partly by large runups in household indebtedness,
American families have tightened their belts to save more and repair
their own balance sheets. It is the U.S. Federal Government that has
been missing in action to restore national savings, reduce our Federal
debt, and promote global balance.
Rather than repair the Federal balance sheet, the administration has
chosen to run trillions of dollars of debt-fueled deficits and borrow
ever-increasing sums from abroad, including China. And rather than
facing the fact that the Federal Government has a spending problem, the
President is advertising and campaigning on a new American Jobs Act
stimulus and tax hike platform containing even more spending and short-
term debt accumulation.
We are told that it will be in the interest of the American people to
borrow more today in order to spend more on infrastructure, for
example. The stimulus proponents say: Interest rates are low, so let's
ramp up borrowing right now. That is the same approach the Senate took
when it voted to extend and expand trade adjustment assistance. They
ignore, however, that piling trillions more onto our national credit
card issued by China and our other creditors moves us that much faster
into the company of the eurozone countries who now face default and
elevated interest costs.
While Federal borrowing rates are low today, what happens when global
markets tire of our profligacy and debt-financed spending and begin to
demand higher interest compensation? As Spain and Italy have seen
recently, low interest rates are not guaranteed and the interest rate
environment that you face can pivot on a dime and escalate rapidly.
Borrowing at low rates today sounds great, until you wake up tomorrow
and are forced to refinance at more punitive rates. More debt-fueled
government spending beyond our means is sure to drive us rapidly down
the road to the stagnation and debt crisis we are seeing today in
Europe.
Of course, the President claims his new stimulus and tax hike
proposals are all paid for, but the payments are largely promises of
future austerity. Anyone who has paid attention knows that when the
Federal Government promises to go on a spending diet later it never
leads to fiscal weight loss because future Congresses are not bound by
today's promises.
It is interesting to hear the President's persistent calls for more
debt-fueled infrastructure spending. Presumably, given his interest in
job creation ``right now,'' the projects he has in mind will be more
shovel-ready than the readiness of the previous stimulus projects,
which turned into something the President found so funny that he joked
about it. Of course, it is no joke to jobless Americans who are stuck
with the stimulus debt bill.
We heard in early September from the chairman of the President's
Council on Jobs and Competitiveness that the council identified ``ten
high-priority infrastructure projects based on their potential to put
Americans to work right away--projects that have already been funded,
but are being held up by regulations.''
The jobs council says it will work with the administration to try to
get the projects moving. Let me repeat that: the projects ``are being
held up by regulations.'' This comes from the chairman of the
President's own jobs council.
Yet when some on the other side of the aisle are reminded that
regulations are holding back job creation, they recoil in disbelief. If
there are 10 large-scale infrastructure spending projects ready to go
and already fully funded and are only being held up by regulatory
review lag, I urge the President to act ``right now'' to get those
projects underway in the interest of job creation. Make one fewer
campaign appearance and use that time to expedite regulatory review and
get those projects going if, as should be the case, he believes job
creation is more important than politics and wishes to act on that
belief.
We have also heard the President remarking on how, from a global
competitiveness perspective, the United States should borrow more today
and spend on what he generically calls ``infrastructure,'' which, as it
turns out, can be anything from paving a road to doling out money to
solar panel makers.
The President cited in his infrastructure advocacy a set of global
rankings on infrastructure from the World Economic Forum's Global
Competitiveness Report. The President seemed to read the report and its
ranking of the United States as 23rd out of 139 countries for
transportation infrastructure competitiveness as a call for more
spending on whatever it is he thinks of as infrastructure.
It appears, however, that he did not read the report in its entirety.
If he did, he would have noticed that the ranking is for only one of
nine factors in the report's overall infrastructure assessment. More
importantly, if he had read the report, he would have noticed the
overriding area identified as the weakest one for the United States in
terms of eroding our global competitiveness. To quote the report
directly:
A lack of macroeconomic stability continues to be the
United States' greatest area of weakness (ranked 87th). Prior
to the crisis, the United States had been building up
[[Page S6026]]
large macroeconomic imbalances, with repeated fiscal deficits
leading to burgeoning levels of public indebtedness; this has
been exacerbated by significant stimulus spending. In this
context, it is clear that mapping out a clear exit strategy
will be an important step in reinforcing the country's
competitiveness going into the future.
There you have it. The report the President data-mined to find a
number to use to support more stimulus quite clearly says that
declining U.S. global competitiveness has come from fiscal deficits,
exacerbated by stimulus spending. It clearly says the solution is to
exit from our unsustainable fiscal path. That means reining in the
runaway debt-fueled spending, not more spending.
Before turning to the legislative process on the bill before us, let
me post a trail marker for our deliberations. The currency bill we are
considering includes reliance on exchange rate models used by the
International Monetary Fund. Those models allow for the macroeconomic
effects on currency valuations of fundamental changes in policies of
trade partner countries. For example, if the United States engages in
fundamental tax reform that would lead to improved growth and reduced
deficits and debt, the models considered in the legislation before us
have the ability to capture those effects.
The marker I wish to set here is a reminder that we should be
similarly so inclined to use economic models that allow for
macroeconomic effects of policy changes when we choose to make
fundamental changes to tax and spending policies. We should be as
willing to have our budget score keepers use economic models that allow
for long-run growth and macroeconomic effects of fundamental tax and
spending reform policies as we seem to be here in this legislation to
use models that incorporate such effects when evaluating currency
alignments. If it is good to use economic models that allow for an
accounting of growth effects here, then it should be good elsewhere.
I also need to address the process we will follow in our
consideration of the currency bill before us. The bill has garnered
bipartisan support. In the interest of promoting a truly bipartisan
effort, which the American people would love to see, it is my hope
there will be balance in amendments that are allowed to be considered.
This bill has sound objectives, but it is not perfect. I believe
amendments from both sides of the aisle can improve the final product.
And, as I mentioned earlier, I have an amendment that I believe will
improve this bill significantly and help us devise a long-term approach
to dealing with currency misalignment. I hope there will be an
opportunity for it, and others, to be considered. I hope they are not
going to lock up the tree again, which is the standard practice around
here by the majority. This bill is an important bill, and we ought to
be able to amend it with important amendments.
The overriding objective of the legislation--job creation--is shared
by Republicans and Democrats alike. Therefore, it is my hope that
amendments from my side of the aisle, designed to promote job growth
today and in the future, will be duly considered, allowed, and duly
debated.
I look forward to consideration of the currency bill before us and a
robust, bipartisan process, which includes consideration of amendments
from both sides to promote job creation.
As I have said, our Nation faces a crisis of unemployment and
joblessness that is filled with pain today and threatens erosion of
human capital and skills, which will negatively impact families and the
overall economy for years and years to follow. Let us not have politics
and special interests dictate what we consider to promote job creation
and economic growth. American workers and families, many of them
struggling and in pain, cannot wait until the next Presidential
election is resolved for the Federal Government to act to promote job
creation.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Coons). The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. SCHUMER. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SCHUMER. Mr. President, I know our time expires shortly. Senator
Hatch has concluded his remarks, so I wish to speak on two other
subjects until Senator Leahy arrives.
SSI Extension
Mr. President, I rise in support of a bill to be introduced along
with Senators Leahy, Gillibrand, Menendez, Franken, and Klobuchar,
called the SSI Extension for Elderly and Disabled Refugees Act of 2011.
This bill, which the Senate is considering passing today by unanimous
consent, is truly unique because it accomplishes three incredibly
important objectives at the same time.
First, it ensures that approximately 5,600 disabled refugees will not
lose critical life-sustaining benefits that are their only safety net,
protecting them from homelessness, illness, and other effects of
extreme poverty.
Some of the disabled refugees this bill helps are people who have
aided American troops overseas in Iraq or Afghanistan--and risked their
lives for America's cause. Others are victims of torture or human
trafficking, whose injuries are so severe that they are now unable to
sustain themselves without these benefits. The bill continues the Bush
administration policy of making sure this vulnerable group does not
lose its benefits.
But, unlike past bills, the second key fact about this bill is that
it is fully paid for. It is paid for by imposing a $30 fee on
individuals applying to enter the country through the diversity visa
lottery program. Each year, hundreds of thousands of people apply to be
one of the 50,000 individuals allowed to emigrate to the United States.
The program has had great success. I have been very supportive of it.
It has also enriched the American fabric with immigrants from countries
that are not traditionally represented in the immigrant pool.
But, unfortunately, because applying for a ``lottery ticket'' has
been traditionally free, the program has recently been compromised by
third parties filing applications on behalf of unknowing foreign
nationals, who then turn around and try to extort money from these
foreign nationals if the ticket turns out to be a ``winning ticket.''
That is wrong and unfair. The State Department has told us that by
charging this $30 fee, we can eliminate this misconduct. So it is a
win-win. We get some money to pay for these refugees who we all agree
should be admitted here. As I said, many helped us in Iraq and
Afghanistan and, at the same time, it does not cost us a nickel and
eliminates a scam that involves a very worthy program, the diversity
visas.
Finally, the third great thing about this bill is, by setting the fee
at $30, the CBO projects we will actually reduce our deficit by $24
million. So it will help, in a small way, reduce the deficit. So the
bill hits the trifecta: It helps a very small, targeted group of the
most vulnerable and needy disabled individuals whom we traditionally
have not abandoned, it virtually eliminates misconduct in the diversity
visa program, and it reduces the Federal deficit. Because it is a win-
win-win for all sides, I ask that my colleagues in the House take up
and pass this bill immediately.
The benefits for these folks already expired on October 1. If we do
not act soon, we will not be able to repair the irreparable harm that
will be done to those most vulnerable individuals. I wish to thank my
cosponsors and chairmen and ranking members of the relevant committees
governing this bill: Senators Leahy, Grassley, Baucus, Hatch, Conrad,
Sessions, and Cornyn. I would also like to thank Senator Coburn for
working with me to have this bill pass and address his concerns to make
the bill better.
We have done something very good. I thank all my colleagues who have
joined in the work on this bill.
Nomination of William F. Kuntz, II
Mr. President, William F. Kuntz, II, is the nominee to the U.S.
District Court for the Eastern District of New York. I wish to describe
to my colleagues the extraordinary qualifications of Dr. Kuntz, the
nominee to the bench of the Eastern District, whom hopefully we will
confirm later today.
Dr. Kuntz has exactly the skills, temperament, and experience to be a
perfect addition to one of the busiest U.S. district courts in the
country. Dr. Kuntz, currently a partner in the New
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York office of Baker Hostetler, is a native of Harlem. He grew up in
what was then called the Polo Grounds projects and went to high school
at Fordham Prep in the South Bronx.
He earned his undergraduate degree from Harvard University, followed
by a master's degree in history, a law degree, and a Ph.D. in American
legal history, all from Harvard--I hope no one will hold that against
him--and all within 11 years of arriving in Cambridge, from Harlem.
What an amazing man. What an American dream story. I would venture
that throughout this country, Dr. Kuntz has few peers, in terms of
education and training. But he did not use his degrees to go on to
teach and write, a valuable career path, to be sure, but possibly not
one that would have put his skills as an advocate and his commitment to
the people of New York to their highest and best use.
Instead, Dr. Kuntz went on to log 33 years of litigation experience
in some of New York City's finest law firms. Most impressive to me, he
served for 23 years as commissioner on the City Civilian Complaint
Review Board. This independent agency oversees the investigation of
citizens' claims of misconduct by New York City police officers. By all
accounts, Dr. Kuntz staked out an admirable middle ground, informed by
hard investigative work and careful consideration of all the 5,000
cases that came before the board every year.
When my legal committee looked into his work there, he was praised by
both the police side and those who brought cases before the board. In
that kind of tempestuous situation, that is rare indeed. Dr. Kuntz's
commitment to public service is long and impressive. He served in
leadership positions on the Lawyers' Committee for Civil Rights Under
Law, the Legal Aid Society, the New York Bar, and PLI, among others.
I will note that Dr. Kuntz will be filling a judicial emergency
vacancy in the Eastern District of New York, a court that adjudicates a
large share of critical cases, such as terrorism and terrorism
financing, organized crime and mortgage fraud.
Dr. Kuntz is sorely needed and more than up for the task. I look
forward to Dr. Kuntz's service on the bench. I congratulate him and his
family.
I yield the floor and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. LEAHY. I ask unanimous consent that the order for the quorum call
be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________