[Congressional Record Volume 157, Number 146 (Monday, October 3, 2011)]
[Senate]
[Pages S6034-S6039]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CURRENCY EXCHANGE RATE OVERSIGHT REFORM ACT OF 2011--MOTION TO
PROCEED--Continued
Cloture Motion
The PRESIDING OFFICER. Under the previous order, the cloture motion
having been presented under rule XXII, the Chair directs the clerk to
read the motion.
The assistant bill clerk read as follows:
Cloture Motion
We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on the motion to
proceed to Calendar No. 183, S. 1619, a bill to provide for
identification of misaligned currency, require action to
correct the misalignment, and for other purposes.
Harry Reid, Sherrod Brown, Charles E. Schumer, Tom Udall,
Richard J. Durbin, Richard Blumenthal, Benjamin L.
Cardin, Daniel K. Akaka, Jack Reed, Joe Manchin III,
Debbie Stabenow, Sheldon Whitehouse, Kay R. Hagan,
Robert P. Casey, Jr., Kent Conrad, Kirsten E.
Gillibrand, Robert Menendez.
The PRESIDING OFFICER. By unanimous consent, the mandatory quorum
call has been waived.
The question is, Is it the sense of the Senate that debate on the
motion to proceed to Calendar No. 183, S. 1619, shall be brought to a
close?
The yeas and nays are mandatory under the rule.
The clerk will call the roll.
The assistant bill clerk called the roll.
Mr. DURBIN. I announce that the Senator from Hawaii (Mr. Inouye) and
the Senator from Connecticut (Mr. Lieberman) are necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The yeas and nays resulted--yeas 79, nays 19, as follows:
[[Page S6035]]
[Rollcall Vote No. 155 Leg.]
YEAS--79
Akaka
Alexander
Ayotte
Barrasso
Baucus
Begich
Bennet
Bingaman
Blumenthal
Boozman
Boxer
Brown (MA)
Brown (OH)
Burr
Cardin
Carper
Casey
Chambliss
Cochran
Collins
Conrad
Coons
Cornyn
Crapo
Durbin
Enzi
Feinstein
Franken
Gillibrand
Graham
Grassley
Hagan
Harkin
Hatch
Hoeven
Hutchison
Isakson
Johanns
Johnson (SD)
Kerry
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Manchin
McCain
McConnell
Menendez
Merkley
Mikulski
Moran
Nelson (NE)
Nelson (FL)
Portman
Pryor
Reed
Reid
Risch
Roberts
Rockefeller
Sanders
Schumer
Sessions
Shaheen
Shelby
Snowe
Stabenow
Tester
Thune
Udall (CO)
Udall (NM)
Vitter
Warner
Webb
Whitehouse
Wicker
Wyden
NAYS--19
Blunt
Cantwell
Coats
Coburn
Corker
DeMint
Heller
Inhofe
Johnson (WI)
Kirk
Kyl
Lee
Lugar
McCaskill
Murkowski
Murray
Paul
Rubio
Toomey
NOT VOTING--2
Inouye
Lieberman
The PRESIDING OFFICER. On this vote, the yeas are 79, the nays are
19. Three-fifths of the Senators duly chosen and sworn having voted in
the affirmative, the motion is agreed to.
Mr. DURBIN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. WICKER. 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. WICKER. Mr. President, I ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Crisis in Sudan
Mr. WICKER. Mr. President, I rise this evening to call attention to
the disturbing developments in Sudan and the newly created nation of
South Sudan. I fear the ongoing violence there risks undermining the
progress that has been made for lasting peace after decades of civil
war and bloodshed.
It has been indeed a historic year for the people of South Sudan.
Almost 3 months ago, on July 9, South Sudan was formally recognized as
a sovereign nation, becoming Africa's 54th state. An overwhelming 98.8
percent of South Sudanese voters chose independence from the central
government of Sudan in the referendum held this January. For the
millions of people whose lifetimes have known only war, the hope of a
better future was finally on the horizon.
Like many, I was cautiously encouraged by the news that the South
Sudanese decided to take a path toward democracy and toward justice.
Like many, I realized this path would be a difficult one as conflict
persists in Darfur and other areas around the border, such as Abyei,
Blue Nile, and Southern Kordofan.
Unfortunately, recent reports of violence confirm the tenuous
relationship between north and south that exists in the wake of
independence. Escalating unrest points to the abandonment of peaceful
negotiations by the north and a return to military intimidation and
fighting. Tragically, civilians have been caught in the crossfire.
According to a post from CNN in late July, hospitals in the Nuba
Mountains are overflowing with civilians who have been hurt in attacks
by the northern army. This is how the report describes the scene:
In one hospital room a nurse tried to clean the blown apart
face of a young boy. In another, a 12-year-old girl suffered
from advanced tetanus after her arm was cut off by shrapnel.
Doctors said she had little chance of surviving.
This violence, affecting innocent children, is unacceptable. Attacks
against civilians are among a number of violations that have been cited
by the United Nations against Sudanese President Omar al-Bashir's
government, which denies the allegations and insists it is only
fighting rebels loyal to South Sudan.
In a report this summer, the United Nations suggests the attacks by
Sudanese Armed Forces in the border state of Southern Kordofan have
amounted to human rights violations and war crimes. Most of the
violence there is affecting the Nuba people, a mostly Christian
minority aligned with South Sudan but left on the opposite side of the
border. Thousands have been forced to flee to caves for refuge in the
Nuba Mountains. Even more worrisome is that the violence is spreading.
In May, the Sudanese Armed Forces invaded the disputed area of Abyei
and displaced an estimated 100,000, among them nearly 4,000 children.
Just last month, the Sudanese Parliament authorized military action in
nearby Blue Nile.
We should not forget the legacy of President Bashir's dictatorial
regime as these atrocities continue to mount. Mr. Bashir has already
been indicted by the International Criminal Court for crimes against
humanity and war crimes over the conflict in Darfur, and the United
States continues to impose sanctions on the northern government.
The full extent of the violence in the border areas between Sudan and
South Sudan is hard to determine because U.N. agencies and humanitarian
groups have been denied access. But this is no excuse for ignoring the
warning signs of a dangerous predicament. All too often, we recognize
crises after far too many lives have been lost.
What we do know about the current situation is ominous. The African
Center For Justice and Peace Studies says supporters of the Sudan
People's Liberation Army-North are being arbitrarily arrested on the
basis of their perceived political affiliation and subject to
extrajudicial killings. Refugees have described execution-style
murders. International calls for the northern government to cease its
aerial bombings have been blatantly ignored. The U.N. Office for the
Coordination of Humanitarian Affairs, OCHA, reports that more than
100,000 people are thought to be displaced by fighting in Blue Nile
alone. The U.N. estimates for South Kordofan top 200,000 displaced
persons. Just last month, an article in the New York Times reported
that a satellite imagery project monitoring parts of Sudan had captured
images of mass graves.
We have always known South Sudan would face serious challenges this
year and in the coming years as a free independent nation. What we
cannot allow is its democratic future to hang in the balance as old
scores are reignited and innocent lives are lost. Let's not forget the
horrors of the civil war that ensued for 22 years before President
George W. Bush engineered the comprehensive peace agreement in 2005.
During that civil war, more than 2 million died, more than 4 million
were displaced, and 600,000 fled the country as refugees.
I urge my colleagues not to lose focus on the hundreds of thousands
of people who have been unfairly hurt by this violence. They have
already endured far too much suffering. I join the U.S. State
Department in its call for the hostilities to stop and for responsible
dialog to resume. The longer the violence continues, the harder it will
be to move forward toward lasting peace.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Ms. SNOWE. I ask unanimous consent that the order for the quorum call
be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. SNOWE. Mr. President, I rise today in strong support of the
bipartisan legislation we will be considering this week regarding the
Currency Exchange Rate Oversight Reform Act of 2011. I am very pleased
it received overwhelming support for us to proceed to consideration of
this most critical legislation.
This day has been a long time in the making, if you ask those of us
who have been calling on our government, under the leadership of both
Democrats and Republicans, to hold our foreign competitors accountable
when they violate our trade laws. In that respect I want to express my
gratitude to my colleague from Ohio, Senator Sherrod Brown, with whom I
have partnered in repeatedly calling for a vote on this crucial
legislation, as well as the Senator from New York, Senator Schumer, and
the Senator from South Carolina, Senator Graham, for also being with us
[[Page S6036]]
and working on this legislation to address all of the facets of this
issue that have been long overdue in consideration by the Congress.
This day has been far too long in coming for the millions of American
workers who are out of work and whose wages have been decimated as a
result of our inability to compete with unfairly subsidized Chinese
imports. Since Congress first began requiring the Treasury to analyze
the exchange rate policies of foreign countries in 1988, China has been
cited as a currency manipulator five times, all occurring between 1992
and 1994.
Since then, despite China's continued and in many ways
intensification of these practices, our government, under both
Democratic and Republican administrations, has failed to cite China
even once for its policy of fixing its currency to the dollar. This is
also despite Congress's repeated efforts to make currency manipulation
a top priority in our Nation's trade agenda.
In fact, in April 2005 I joined my Senate colleagues in decisively
supporting an amendment calling on China to reform its currency
practices. This action is largely viewed as helping to prompt China to
allow its currency to gradually appreciate between 2005 and 2008. In
July 2007 I joined a majority of colleagues on the Senate Finance
Committee in favor of reporting the Currency Exchange Rate Oversight
Reform Act of 2007 by a vote of 20 to 1. That was 4 years ago. We
started 6 years ago, and yet we still had not had any concrete,
substantive action on this fundamental issue. None of these bills were
brought up for a vote by the full Senate.
From 2008 to mid-2010, China again froze its exchange rate constant
in an effort to maintain its production edge during the financial
crisis. It was only last June that China showed signs that it might
allow the RMB to gradually appreciate. But according to the
Congressional Research Service, it gained only 6 or 7 percent on the
dollar over the last year.
Faced with these blatantly inequitable trade distortions, I have
witnessed Maine's manufacturers and their employees going to great
lengths to improve their competitiveness. According to the
Manufacturers Association of Maine, workers in our State have increased
output per employee by 6 percent over a period of 8 years--from 60,000
in 2001 to 89,000 in 2009. Yet the dramatic job losses we have
witnessed in the American manufacturing sector over the last decade
tell a very different story.
According to recent reports, between 2001, when China joined the WTO
and 2010, 4.1 million manufacturing jobs were lost in this country, and
1.9 million of those jobs or 47 percent can be directly linked to our
growing trade deficit with China.
In Maine, this withering of our manufacturing base has contributed to
wage and salary employment levels falling precipitously through
December 2010, with job losses of 26,900, a 4.4-percent drop. Overall,
employment numbers in my State have returned to 1999 levels--1999
levels--erasing any economic gains of the previous 10 years.
U.S. manufacturing employees, including thousands who live in small
towns throughout my State, are recognized as the most productive
workers in the world. These are the types of jobs that should be
thriving in a global economy, but they cannot if foreign producers,
such as those in China, are playing with a proverbial stacked deck.
For this reason I rise today to urge my colleagues to join us in
supporting the Currency Exchange Rate Oversight Reform Act, legislation
that I have authored with the Senator from Ohio to enforce the rules
and address a paramount contributing factor in the decimation of our
Nation's once unparalleled manufacturing base--currency exchange rate
manipulation.
For over a decade China has manipulated its exchange rate by pegging
the Chinese renminbi to the dollar. As a result, China's currency is
estimated to be undervalued by anywhere from 12 to 50 percent according
to the Congressional Research Service. In fact, despite the Chinese
Government's announcement last year that it would begin allowing its
currency to gradually appreciate, the Treasury Department's exchange
rate report, released May 27, noted that ``the real exchange rate of
the renminbi remains substantially undervalued.''
Some of my colleagues will no doubt argue that mill closings and
layoffs in States such as Maine have little to do with the value of the
Chinese currency, and that legislation to hold countries such as China
accountable when they intervene in currency markets will not create
jobs or grow our economy.
For that matter, proponents of China's entry into the World Trade
Organization 10 years ago also claimed that liberalizing trade with
China would improve our trade deficit. At the time of its entry into
the WTO in December 2001, China agreed to provide greater transparency
when it comes to trade policies, to enforce intellectual property
rights, and to end discriminatory and unpredictable rules impeding
market access for American products.
In fact, as the agreement to allow China into the WTO was being
negotiated in 2000, President Clinton argued it would create, in his
words, ``a win-win result for both countries.''
However, as President John Adams once said, ``facts are stubborn
things.'' Let's examine some of the evidence.
For one, in January, I met with Microsoft CEO Steve Ballmer a few
hours before he attended a private meeting at the White House. Mr.
Ballmer told me that in fiscal year 2010 over 30 million PCs were sold
in China that ran illegal copies of Windows. Rather telling, he noted
that while China is their second largest personal computer market in
the world, it is 70th in terms of Microsoft revenue per personal
computer.
If one of the largest and most integrated companies in the world is
being hamstrung by China's piracy and blatant infringement of
intellectual property rights, how can we expect smaller U.S. companies
to stand a chance when it comes to entering the Chinese market? On top
of its failure to police intellectual property rights infringement,
unlike most other countries where exchange rates are determined by
market forces, the Chinese Government does not allow the renminbi to
fluctuate freely and instead pegs it tightly to the U.S. dollar at a
rate that makes it significantly undervalued vis-a-vis the dollar.
As a result, Chinese exports to the United States are artificially
made less expensive, as we well know, and the cost of U.S. exports to
China and the rest of the world are made more expensive by a similar or
equivalent amount.
According to a new report featured last week in the Wall Street
Journal, one significant consequence of China's trade practices is that
over the last two decades it has surged as an exporter at a ``break-
neck pace,'' while the growth of U.S. spending on imports from China
has climbed steadily. As indicated by this chart to my right, according
to the report, imports from China as a share of U.S. spending climbed
from below 1 percent throughout much of the 1990s, to over 5 percent
today. There is no question that this trajectory reflects it in this
chart, seeing China as a total of U.S. spending, and what has occurred
is a dramatic rise--without abatement, without any intervention
whatsoever--and we have seen a steady major rise in terms of the amount
of imports and spending by Americans on Chinese imports.
Due in large part to China's currency manipulation and other trade-
distorting practices, manufacturers in Maine and places like Maine have
not been able to compete against this surge in artificially cheap
Chinese imports. As Americans spend increasingly more on Chinese
products, as illustrated in the chart, these imports displace goods
made in the USA.
Consequently, China's currency undervaluation has contributed
directly to our soaring trade deficit with China, which has ballooned
from $83 billion, when China joined the WTO in 2001, to $273 billion in
2010. Those numbers are worth repeating--when you are speaking about
$83 billion, which our trade deficit was in 2001, and now in 2010 it
has skyrocketed to $273 billion.
This ever-expanding, explosive trade deficit, unprecedented, of
course, in our history, which grew 20 percent between 2009 and 2010,
destroys existing jobs, prevents new job creation and, as economists
from the Economic Policy Institute have indicated, increases the global
``race to the bottom,'' in their words, when it comes to middle-class
wages.
[[Page S6037]]
For example, the Economic Policy Institute recently released a report
noting that as plants have closed, workers displaced by trade from the
manufacturing sector have had particular difficulty in securing
comparable employment, and average wages of those who found new jobs
fell by 11 to 13 percent.
As we see on the chart, reflected and demonstrated here, most
graphically, the Economic Policy Institute report discovered that since
China's entry into the World Trade Organization in 2001 and through
2010, when we saw that explosive growth of the trade deficit from $83
billion to $273 billion between 2001 and 2010, the increase in the
U.S.-China trade deficit eliminated or displaced 2.8 million American
jobs or 310,000 jobs per year.
As we can see illustrated on the chart, virtually every State in
America has been affected by the trade deficits with China, with
displaced thousands and thousands of jobs, and in less than a decade
2.8 million American jobs.
In my State of Maine this means the trade deficit has displaced
nearly 10,000 workers or nearly 2 percent of State employment. As the
chart depicts, the pain of job losses is not unique to one individual
State or region of the country. Workers in all 50 States, from
California to South Carolina, from Michigan to Texas, have been harmed
and unable to compete against artificially cheap Chinese imports.
While these charts and reports may paint a picture of doom and gloom,
there is recourse available to American workers injured by unfair
trade. Under the U.S. countervailing duty law, tariffs can be imposed
on imports benefiting from foreign government subsidies if it
demonstrates that the subsidies cause or threaten injury to a U.S.
industry producing the same or similar product.
But while numerous U.S. industries have attempted to bring
allegations of currency manipulation as an export subsidy under our
trade laws, in each instance the Department of Commerce has refused to
investigate.
For example, it is a little known fact that the U.S. pulp and paper
industry employs 900,000 workers--roughly the equivalent number
employed by the U.S. auto industry--making it an indispensable economic
pillar in rural communities in Maine and across the country.
Last year, several U.S. paper manufacturers with mills in Maine
brought forward allegations that China was violating trade rules by
illegally subsidizing their products in the U.S. market. Just over a
year ago, in 2010, I testified before the International Trade
Commission and made the case--and we were ultimately successful on
these points--that foreign paper manufacturers in China and Indonesia
were illegally selling their products in the United States at unfairly
subsidized and underpriced rates.
Amazingly, however, the Commerce Department refused to investigate
whether China's currency practices constituted an illegal--and
therefore countervailable--export subsidy.
Simply put, this failure to take action is unacceptable. In response,
in November of last year, the Senator from Ohio, Senator Brown, and I
sent a letter to the Senate's leadership asking that a vote be
scheduled on legislation directing the Commerce Department to
investigate allegations that currency undervaluation provides a
countervailable subsidy at the expense of American jobs. When the
Senate failed to take action, Senator Brown and I filed the House-
passed currency reform bill as an amendment to the tax extender package
in December of 2010.
In January 2011, during Chinese President Hu's visit to the United
States, we sent a letter to Secretary Geithner underscoring the need to
enforce trade remedy laws to provide U.S. industries affected by
China's currency practices with a lifeline to compete. And, finally, in
response to our government's failure to investigate these unfair trade
practices, on February 10 of this year, Senator Brown and I introduced
our legislation, the Currency Reform for Fair Trade Act.
Simply put, the Department of Commerce has failed to use its
authority to respond to currency manipulation by investigating these
allegations brought by U.S. industry and placing countervailing duties
on foreign imports benefiting from these unfair trade practices. The
purpose of our bill is to make clear that Commerce has the ability to
investigate--regardless of whether the subsidy is provided to all
foreign businesses in a given country or just to those that are
exporting.
That is an important point, because if we wait to make that
demonstration, they can continue to export their goods to the United
States before we could ever reach the point of being able to make that
determination on imposing that countervailing subsidy or determining
which companies in China are actually doing the exporting. So it is
important to eliminate that distinction, because that has been a
barrier.
In fact, it certainly prevented the Department of Commerce, in their
words, from being able to impose any kind of subsidies or to
investigate the case before they could impose a countervailing duty. So
this way we eliminate the distinction, irrespective of whether a
business is exporting within China their goods. The point is, we don't
want to wait for the Department of Commerce to make that determination.
Those industries that do export--and once they do export--have already
done the damage. So it is clearly important to be able to have the
Department of Commerce in a position of being able at the outset to
initiate this investigation on those companies that actually export
goods to the United States from China at an unfair price.
Notably, our bill does not legislatively deem that a currency
undervaluation satisfies the requirement of finding a countervailing
subsidy. It just requires Congress to determine on a case-by-case basis
whether currency undervaluation is giving foreign companies an unfair
competitive advantage over their counterparts in our country.
Since introducing our legislation in February, we have added 11
bipartisan Senate cosponsors, and the House companion to our
legislation has over 200 cosponsors. Furthermore, on September 23, I
was proud to join as a lead original cosponsor of the bipartisan
legislation before us today, which combines the key elements of our
bill with critical provisions of the legislation authored by the
Senator from New York, Senator Schumer, and the Senator from South
Carolina, Senator Graham, that I also supported as an initiative when
it came before the Senate Finance Committee in 2007.
The merged bill utilizes U.S. trade law to counter the economic
damage and harm to U.S. manufacturers caused by currency manipulation
and it authorizes new consequences for countries that fail to adopt
appropriate policies to eliminate unfair currency undervaluation. Most
critically, it will also provide businesses that are damaged by China's
trade practices with the tools to respond on behalf of American
workers. It ensures our government will heed the requests of a wide
range of U.S. industries, such as paper manufacturers in Maine, to
investigate whether currency undervaluation by a government provides a
subsidy, and one in which we can initiate an action by imposing
countervailing duties.
Finally, while some of my colleagues have expressed concerns that
challenging China's unfair trade practices could lead that government
to retaliate against U.S. goods and jeopardize our economic recovery,
the fact is the potential benefit of currency reform is enormous when
it comes to fighting unemployment and boosting the American economy,
because as of today China essentially rigs the game to undercut true
market competition and undermine U.S. businesses.
For example, a study released in June by the Economic Policy
Institute discovered that addressing Chinese currency manipulation and
enforcing fair trade provisions when it comes to these violations would
support the creation of more than 2 million U.S. jobs, increase the
gross domestic product by as much as $285 billion, and reduce the
deficit by more than $70 billion a year.
Failing to act now is not an option. The International Monetary Fund
recently announced that China will surpass the United States
economically in 2016--a mere 5 years from now. If this turns out to be
true, it will be due in large part to our current policies, which are
fueling our decline and China's rise. We import more than we export,
keep running huge trade deficits, consume more than we produce, and
outsource thousands of jobs.
[[Page S6038]]
If one manufacturer is compelled to close because we failed to combat
subsidized imports, that is one less manufacturer able to export and
help grow our economy. And frankly, if there was ever a moment to
empower a workforce when it comes to competing in a global economy, is
there any doubt, given our dire economic state, that time is now? From
Maine to the Midwest, China's currency manipulation has been among the
greatest impediments to our manufacturing sector. Unfortunately, the
silence of our government when it comes to this issue has become the
silence of our factories.
It is time to take action to rebuild our economic foundations, and
this legislation will ensure our government has the tools to respond on
behalf of American companies and workers by imposing countervailing
duties on exports subsidized by currency manipulation undervaluation.
It is absolutely vital we take this action this year--right now--
because, as I indicated at the beginning of my remarks, if you look at
the historical picture of the consideration of this legislation, it is
clear it has been underestimated, it has been overlooked in terms of
the value it brings to our country, to the value it brings to the
manufacturing segment of our economy, and to the value it brings to our
workers. I am deeply concerned, because it also seems as if it is an
either/or proposition when we talk about trade-related issues--either
we do nothing or we will invite a trade war.
We have to look at the trade practices of our trading partners and
the laws which they are required to uphold--in this case, for China,
through the World Trade Organization. They made a commitment at the
onset when they joined that organization, and they have refused to
uphold it when it comes to leveling the playing field and creating the
equilibrium--to let the currency flow as required and stipulated under
that agreement when they became a member of that organization. They
have failed time and again to monitor these agreements and to monitor
the actions of their own companies with respect to this practice, and
it has decimated many industries across this country.
As I indicated with this chart, virtually every State in America has
been damaged as a result of the loss of jobs because we have failed to
uphold the standards of fair trade. So it isn't about encouraging a
trade war. Far from it. I think it creates not only a level playing
field, but it creates an equitable circumstance for our trading
partners. And it is important for those countries, such as China, to be
prepared to live up to the agreements to which they have subscribed
through the World Trade Organization. They are required to live by
their agreement, and that means they have to establish the standards
where they cannot manipulate their currency, as they have been doing
for more than two decades.
It has been a problem, and it has been a persistent problem.
Unfortunately, both sides of the aisle--whether it is Democratic or
Republican administrations, the presidency or here in Congress--have
failed to take a concrete, concerted action that could have made a
profound difference long before this point. This could have been
averted. Time and again we haven't been able to have a Treasury
Secretary designate China as a currency manipulator that I think would
have then prompted much more significant action on the part of any
administration.
So that issue has been addressed in this legislation--to change the
threshold, to redesign and to target the legislation more precisely so
that it will give the tools to the administration, and specifically to
the Treasury Secretary, to be able to designate China as a currency
manipulator, which then kicks in certain safeguards and actions.
The same is true for the Department of Commerce, that they will be
able to initiate at the outset an investigation to determine whether
devaluing the currency on the part of China has contributed to unfair
trading practices and, obviously, adversely affecting our goods and
workers and companies here in the United States. It is important to
give the tools to our agencies to make sure they can fulfill their
obligations.
I know there are times in which they have not done so, even when they
have had the tools, and they have been empowered to use those tools,
much to the detriment of our industries--much to the detriment of these
jobs and these manufacturing companies all across America--that have
either closed their doors or they have sharply curtailed their
businesses or their level of employment.
I know that firsthand from my State. It has brought tremendous
consequences to rural Maine and to rural America as a result, because
that is what has been the basis of our economy. The manufacturing
segment of our industry has been so critical to good-paying jobs, and
that ultimately has been damaged and harmed as a result of this
currency manipulation issue that has been persistent on the part of the
Chinese, and one that we now have to address through this legislation.
I appreciate this opportunity to address the Senate on this critical
issue. As we go forward in the days ahead in debating this legislation,
I look forward to working with my colleagues--the Senator from Ohio,
who has done yeoman's work on this issue and has brought this issue to
the highest levels in terms of its attention and importance to this
country, most assuredly. I am looking forward to working with him and
our other colleagues to make sure we can fulfill our commitment to
passing this legislation.
It is not only about debating it, it is not just voting on it, it is
about its becoming law. I think we should bring this to its logical
conclusion and send it to the President for his signature. The time has
come, as I said, and it is long overdue. We have failed the workers and
the industries of this country who are trying to compete and who can
make goods. We are not going to forsake our manufacturing sector,
because we have the ability to make the best goods with the most
productive workers in the world, and we should be able to continue to
do that. The only way we can fulfill that obligation to them is through
this legislation. There is no other recourse at this moment in time.
I yield the floor, Mr. President.
The PRESIDING OFFICER (Mr. Merkley). The Senator from Ohio.
Mr. BROWN of Ohio. Mr. President, I, first of all, thank Senator
Snowe for her leadership on this currency legislation. Its time has
come, as she has said. She has been a real leader on this for months--
years, for that matter. I so appreciate her work on this problem.
Pure and simple, this is the most important bipartisan jobs bill the
Senate will pass in my 4\1/2\ years since I have been a Member of the
Senate. Senator Snowe has been here a good bit longer and has been a
member of the Finance Committee that understands these issues of how
China has gamed the system. Senator Snowe and I were joined in our
legislation, combining it with Senator Schumer and Senator Graham in
their legislation, also Senator Stabenow, a Democrat from Michigan;
Senator Sessions, a Republican from Alabama; both Senators from North
Carolina, Senator Burr, a Republican and Senator Hagan, a Democrat;
joined by Senator Casey and the other Maine Senator, Senator Casey from
Pennsylvania, a Democrat, and the other Maine Senator, a Republican,
Senator Collins. And that just shows the bipartisan support.
We had this vote today. On S. 1619, the cloture vote was 79-19, which
is a strong message to the House and to our colleagues that this
legislation as we debate this week is so important. It is deserving of
basically a week of the Senate's time to discuss and debate what China
trade is all about.
We know what China trade is all about. We know, as Senator Snowe
said, the trade deficit with China has ballooned in the 10 years since
China has been part of the World Trade Organization. Think of it this
way. Every day we buy $750 million more from China than we sell to
China--every single day--Sunday, Monday, Tuesday, Wednesday, Thursday,
Friday, Saturday--every day of every week every year. So for the past
year, $750 million we buy from China more than we sell to China. You
just can't keep doing that. You can't keep doing that and hold the
industrial base that the people of Oregon, the people of Maine, the
people from Ohio care about.
Look at it this way. I don't want to inundate my colleagues with
figures and numbers and dollars and job numbers and all that, but
President Bush I
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said $1 billion in trade surplus or trade deficit translates into
13,000 jobs. He said that 15 years ago. No President has quantified
that since. But think about that. Thousands of jobs for every $1
billion in trade deficit or surplus. Well, with China alone, we have
three-quarters of $1 billion every single day. Our trade deficit with
the whole world is $600 billion, more than that.
So we buy $600 billion more than we sell to the world every year. How
can a country, no matter how wealthy--and this is a rich country still,
even though millions of people have been unemployed, have lost
manufacturing jobs in my State and other States across the country. How
can we continue as a prosperous nation if manufacturing is outsourced
and these jobs go somewhere else?
I don't believe ever that I can think of in world history--and I have
said this before and nobody has challenged it--have we seen a business
plan of American companies moving to China, manufacturing there, and
then selling back to the United States. A company such as Proctor &
Gamble, on the other hand, they moved production to China, but they
sell from their Chinese operations to China, East Asia, probably Taiwan
and maybe Japan and Malaysia. They have their production in the areas
they sell to. That makes perfect sense. That is good for those
countries, good for those workers, good for the United States, and good
for Cincinnati where Proctor & Gamble is located. But these companies
that have it as their business plan to shut down production here, move
to China, and then sell those products that they make in Shanghai and
Wuhan and Beijing instead of in Akron, Canton, and Toledo--sell those
products back to consumers in Oregon, Ohio, and Maine--that is why this
legislation is so important.
A new study said we have lost 2.8 million jobs in the last decade to
China because of currency manipulation; 1.9 million of those jobs are
in manufacturing. You know what has happened in places such as
Portland, and the Senator from Maine knows what has happened in her
Portland, and what that has meant to lost jobs in this country. And
understanding the reason that happens is because China games the
system, because China doesn't play fair--pure and simple, say it
straight, because China cheats. They have been given, for all intents
and purposes, a 25 or 30 percent subsidy to their products. So because
they cheat on currency--putting aside how they subsidize their paper
industry, for instance, with water and capital and energy and land.
Just on currency alone, when they sell something into the United
States, they have a 25 to 30 percent cost advantage. I know companies
in places around my State, in Mansfield, Springfield, Zanesville,
Chilicothe, will say that the cost of raw materials is higher than the
cost of the product when it comes from China. Why? Because China
cheats. And one of the ways they cheat is they undervalue their
currency so they have a 25-percent discount on their products sold into
the United States. We can't compete with that, no matter that our
workers are efficient, no matter that our companies are efficient, no
matter that we cut costs in so many ways with the more advanced
technologies and advanced manufacturing that we do.
So that is why this was such an important step, passing
overwhelmingly and sending to the floor for debate today--79-19--this
bipartisan jobs bill called the Currency Exchange Rate Oversight and
Reform Act of 2011.
Earlier today I was in Cleveland and I had a meeting with two owners
of a company in Brunswick, OH, more or less a Cleveland suburb,
Automation Tool & Dye. It is a family company that has been in
operation since 1974. The owners, the two sons, Randy and Bill Bennett,
spoke today about their company. They have, I believe they said, 55
employees who are a major part of American manufacturing. They are the
kind of company that when it is such a disadvantage on currency, it
puts them in a less than competitive position sometimes. They are still
doing OK, but they know how hard the business climate is when they are
at that disadvantage.
So when they are making products, because China has gamed the system
and an American company might move to China to do production, they
can't up and move their family company of 55 employees--they can't move
to China to service the company that has moved to China because of the
competitive disadvantage.
So we know how that has worked. We know why this legislation that
Senator Snowe has worked on, the two bills we put together, Senator
Snowe and my bill with Senators Schumer and Graham. As I said, we have
had good strong bipartisan sponsorship on this bipartisan jobs bill and
we have also had a very good vote today that was 79-19 to move this
forward.
The Economic Policy Institute issued a new report showing that
addressing Chinese currency manipulation could support the creation of
2.25 million American jobs, mostly in manufacturing, mostly the kind of
jobs that will create other jobs because of the wealth that Senator
Snowe talked about, the wealth that manufacturing creates. And as
Senator Snowe pointed out, when the opponents to this--and too often we
have seen administrations of both parties oppose bills such as this.
When opponents say this is protectionism, I don't know what is wrong
with protecting our families and protecting our neighbors and
protecting our country. But ceding that, they say this is
protectionism. This, in fact, is a reaction to Chinese protectionism.
And the People's Republic of China has not really believed in the rule
of law when it comes to trade. There is an emphatic strong insistence
by the U.S. Senate that we do believe in the rule of law for
international trade; that we do think all actors should behave. We do
think that everybody in the trading system should work on a level
playing field.
Today was the biggest step I have seen the U.S. Senate take since I
came here in 2007. We are going to have a long debate this week.
Everybody is going to get their chance. Some Members of the Senate who
wanted us to debate this are still not quite sure exactly where we go
with this. I think it is pretty clear, though, that the U.S. Senate
today reflects what the people of this great country believe: That we
make things.
My State is the third largest manufacturing State in America. Only
Texas and California, States that are twice and three times our size in
population, make more than we do. We know how to produce. We need to
continue to produce. We know that manufacturing creates wealth.
This is a huge victory--only a first step but a huge first step and a
victory for American manufacturing to help us reindustrialize our
country.
I thank my colleagues for this 79-19 vote. I thank Senator Snowe
especially for her terrific work on both sides of the aisle in getting
this bill moving forward. It is going to matter for workers in Toledo,
Dayton, Cleveland, and Columbus. And for that, I am grateful.
Mr. President, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BROWN of Ohio. Mr. President, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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