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U.S. Senator Lindsey Graham (R-South Carolina) made this statement in response to criticism from the Chinese government’s Central Bank, Foreign Ministry and Ministry of Commerce over Senate legislation to crack down on Chinese currency manipulation.

Last night, the Senate voted to proceed to debate on legislation cracking down on Chinese currency manipulation. The procedural vote was 79-19. The Senate continues to debate the legislation today.

Graham said:

“China’s threats to the United States Senate should fall on deaf ears. We should be examining their business practices, not their rhetoric. China should be rewarded and engaged when they play fair and we should push back when they continue to cheat.

“The Chinese government’s criticism of our efforts to bring about long-overdue currency reform is ill-advised. We all want a healthy trading relationship with China, but their business practices – from intellectual property theft to currency manipulation, has created an unhealthy business relationship.

“China’s pegging of the yuan to the dollar and keeping it consistently undervalued continues to create a competitive advantage for the Chinese. China has too big of an economy to allow them to continue creating an unfair trade advantage. Chinese currency manipulation has resulted in 2 million jobs being lost in the United States and over 40,000 in South Carolina. China must stop cheating.”
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Today, U.S. Senator Charles E. Schumer announced that his legislation to crack down on China’s unfair trade practices is on track to pass the Senate this week. According to a report issued by the Economic Policy Institute (EPI), Upstate New York has lost nearly 75,000 jobs to Chinese trade practices over the past decade. Schumer, who has introduced legislation with colleagues on both sides of the aisle, is pushing for quick passage in order to stop China’s unfair trade practices that are hurting New York companies. In the past few years, Chinese companies have bid on New York projects and used workers who were being paid only a few dollars an hour, and sometimes even less, for the same projects companies were bidding on. By doing this, their bids came in much lower compared to other American companies. By doing the right thing and paying workers a decent wage, Upstate New York manufacturers are losing out to Chinese companies on huge projects. The EPI study states that passing Schumer’s legislation could create 2.25 million American jobs over the next several years.


“Upstate New York manufacturers have been absolutely decimated over the last ten years by Chinese companies who have rigged the game in their favor,” said Schumer. “Make no mistake about it – New York companies can compete against anybody and win when playing by the same rules. We have one of the most hard working, capable work forces anywhere in the world, but China’s currency manipulation has severely and unfairly weakened this country’s manufacturing sector. This week we have a chance to send a clear message to the Chinese: enough is enough. We need to pass this bill to crack down on China’s unfair trade practices; to stop the mass exodus of American manufacturing jobs; and to put New Yorkers back to work.”


China’s ongoing undervaluation of the yuan continues to cause severe economic disruptions and imbalances globally and is taking a huge toll on manufacturers and workers across New York and throughout the country. Moreover, failure to address China’s currency manipulation has emboldened China to countenance other market-distorting policies, including discriminatory indigenous innovation policies and inadequate protection of intellectual property, that benefit companies in China at the expense of U.S. companies and workers. Schumer was joined on the call by representatives from Bitzer Scroll of Syracuse, Brewster Plastics of Patterson, and XLI of Rochester – three companies that have lost out to Chinese companies when competing for manufacturing contracts.


The Chinese use their currency as a strategic weapon,” said Peter Schott, owner and president of XLI in Rochester. “It simultaneously gives their companies an unfair price advantage while diminishing New York manufacturers' ability to compete. It's cost our state thousands of jobs. It's cost jobs at my company. I'm not afraid to compete with any company, anywhere, but all other things being equal, Chinese products coming into the U. S. have a 30% to 40% price advantage just because of the currency. In some cases the price of the finished Chinese product is the same as my cost for just the material. How do you compete with that? The bill that Senator Schumer introduced will go a long way to help address this situation. Chinese products will have to compete on their merits and not the exchange rate. I'm confident that will mean new opportunities for New York manufacturers and our employees.”


XLI is a Rochester-based full service manufacturer of precision engineered machine components and assemblies. The firm makes components that are then sold to OEMs (original equipment manufacturers) and integrated into the products that consumers ultimately buy. XLI has lost business to Chinese competitors, and in some instances their customers have stopped sourcing components from XLI in order to pursue cheaper components from Chinese suppliers. Beyond this direct impact, the artificially low Chinese costs have skewed what customers expect something to cost. This has created a low “price expectation” to the point that American companies are at a disadvantage before they can even bid on a job.


It becomes harder and harder for an American manufacturer to grow when its Chinese competitors can export to the USA at little or no import duties, while charging very high import duties for the same American made product to be shipped into China,” said Mike McKee, Bitzer Scroll’s general manager. “When Senator Schumer toured Bitzer Scroll, he promised his hard work to help companies like Bitzer compete fairly. I hope Congress will join him in leveling the playing field and fighting for jobs.”


When Bitzer Scroll, a scroll compressor producer, ships their compressors to China, there are 23% higher costs made up of total import duties (6%) and value-added taxes (17%). When China ships into the US, there aren’t any duties or value-added tax added to the costs. Bitzer Scroll competes with Danfoss, a firm that moved its factory from Georgia to China, which is able to supply their largest customer, Carrier Corporation, with competitive product at 20% below Bitzer’s lowest price. The move to China allows them to now service the Chinese market competitively (without paying import duties) and service the US market with a lower cost Chinese product. Bitzer Scroll, Inc. currently sells to Johnson Controls, York Division. Due to York’s expansion into the Chinese market they are requiring that Bitzer move manufacturing to China in order to avoid the 23% import duties or they will be forced to move to another manufacturer in China. This reduces volume produced within the company’s Syracuse manufacturing facility.


“The cost of mold making here versus China is the main reason for lost jobs,” said Brett Wallace, Vice President of Operations for Brewster Plastics. “China quotes a mold price at or below what the raw materials for that mold cost in the US. With automation and engineering, we stand a chance at competing with China’s part pricing, but we have no hope on competing with tooling cost at their current price structure.”


Since the 1970s, Brewster Plastics has been serving America’s leading companies in the consumer products, health, dental and industrial sectors. In the past few years, Chinese companies have made inroads into the plastic and molding industry. Brewster Plastics has had to make substantial investments to maximize their manufacturing and development due to Chinese companies undercutting the market and having an unfair advantage. Due in part to currency manipulation, Chinese companies can offer their plastic molds for cheaper then what the raw materials cost alone in the United States. Due to an inflated currency, these companies can sell a finished product with far less financial investment then a company like Brewster Plastics. Chinese companies can produce plastic molds for 30%-50% less then Brewster Plastics - which means jobs are being lost and profits are getting smaller.


Over the past decade, the nation has lost approximately 6 million manufacturing jobs and seen 57,000 manufacturing plants shut down forever. According to a new Economic Policy Institute study, 1.9 million of those manufacturing jobs nationwide were lost or displaced as a result of increased trade with China and the Chinese government’s manipulation of its currency. In New York State, 161,414 total jobs were lost or displaced, including 74,091 jobs in Upstate New York. Moreover, since China joined the World Trade Organization in 2001, our trade deficit with the country has increased from $83 billion to a record of $273 billion in 2010. Addressing currency manipulation would yield significant benefits to the U.S. economy. According to the study, addressing China’s currency manipulation would positively impact the U.S. economy over the next 18 to 24 months by creating a 1.9% increase in GDP [$285.7 billion], $71.4 million in annual deficit reduction, and 2.25 million American jobs.

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The Currency Exchange Rate Oversight Reform Act of 2011 is intended to reform and enhance oversight of currency exchange rates, leveling the playing field for New York manufactures. Specifically, the legislation:


Improves Oversight of Currency Exchange Rates. Under current law, Treasury is required to identify countries that manipulate their currency for purposes of gaining an unfair competitive trade advantage. In recent years, Treasury has found that certain countries’ currencies were undervalued. However, based on its interpretation of the law’s legal standard for a finding of “manipulation,” Treasury has refused to cite such countries as currency manipulators. The bill repeals the currency provisions in current law and replaces them with a new framework, based on objective criteria, which will require Treasury to identify misaligned currencies and require action by the administration if countries fail to correct the misalignment.


Clarifies Countervailing Duty Law Can Address Currency Undervaluation. Under existing trade laws, if the Commerce Department and the International Trade Commission find that subsidized imports, like glass, are causing economic harm to American manufacturers and workers, the administration must impose duties on those imports to offset (“countervail”) the benefit conferred on foreign producers and exporters by the government subsidies. Commerce already has 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 to investigate from a wide range of U.S. industries. The bill specifies the applicable investigation initiation standard, which will require Commerce to investigate whether currency undervaluation by a government provides a countervailable subsidy if a U.S. industry requests investigation and provides proper documentation.


Includes WTO-Consistent, Key Provision from Brown-Snowe Currency Reform for Fair Trade Act (S.328) and House-passed Currency Legislation. In previous countervailing duty investigations, Commerce has refused to find an export subsidy if the subsidy is not limited exclusively to circumstances of export (i.e., when non-exporters also may benefit). The bill precludes Commerce from imposing this bright-line rule, and 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. This clarification is supported by dispute settlement rulings of the World Trade Organization’s Appellate Body (e.g., in the case involving taxation of foreign sales corporations) and is the key element of the Brown-Snowe currency bill and the currency bill that passed the House (H.R.2378) in September 2010 with overwhelming bipartisan support.


Establishes New Objective Criteria to Identify Misaligned Currencies. The legislation requires Treasury to develop a biannual report to Congress that identifies two categories of currencies: (1) a general category of “fundamentally misaligned currencies” based on observed objective criteria and (2) a select category of “fundamentally misaligned currencies for priority action” that reflects misaligned currencies caused by clear policy actions by the relevant government.


Requires New Consultations. The legislation requires Treasury to engage in immediate consultations with all countries cited in the report. For “priority” currencies, Treasury would seek advice from the International Monetary Fund (IMF) as well as key trading partners.


Triggers Tough Consequences. For “priority” currencies, important consequences are triggered unless a country adopts policies to eliminate the misalignment.


Immediately upon designation of a “priority” currency, the administration must:


Oppose any IMF governance changes that benefit a country whose currency is designated for priority action.


Consider designation of a country’s currency as a “priority” currency when determining whether to grant the country “market economy” status for purpose of U.S. antidumping law.


After 90 days of failure to adopt appropriate policies, the administration must:


Reflect currency undervaluation in dumping calculations for products produced or manufactured in the designated country.


Forbid federal procurement of goods and services from the designated country unless that country is a member of the WTO Government Procurement Agreement (“GPA”).


Request the IMF to engage the designated country in special consultations over its misaligned currency.


Forbid Overseas Private Investment Corporation (OPIC) financing or insurance for projects in the designated country.


Oppose new multilateral bank financing for projects in the designated country.


After 360 days of failure to adopt appropriate policies, the administration must:


Require the U.S. Trade Representative to request dispute settlement consultations in the World Trade Organization with the government responsible for the currency.


Require the Department of Treasury to consult with the Federal Reserve Board and other central banks to consider remedial intervention in currency markets.


Limits Presidential Waiver. The President could initially waive the consequences that take effect after the first 90 days if such action would harm national security or the vital economic interest of the United States. However, the President must explain to the Congress in writing how the adverse impact of taking an action would be greater than the potential benefits of such action. Any subsequent economic waiver would require the President to explain how the adverse impact of taking an action would be substantially out of proportion to the benefits of such action. Furthermore, any Member of Congress may thereafter introduce a joint resolution of disapproval concerning the President’s waiver. Should the disapproval resolution be approved, the President may veto it, and the Congress would have the opportunity to override the veto.


Establishes New Consultative Body. The bill would create a new body with which Treasury must consult during the development of its report. Of the nine members, one would be selected by the President and the remainder by the Chairmen and Ranking Members of the Senate Banking and Finance Committees, as well and the Financial Services and House Ways and Means Committees. The members must have demonstrated expertise in finance, economics, or currency exchange.

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Even with Democrats and Republicans supporting the bill, Speaker Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) are doing their very best to block the bill. Looks like they are puppets of communist China.

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CURRENCY EXCHANGE -- (Senate - October 05, 2011)


The ACTING PRESIDENT pro tempore. The Senator from Rhode Island.


Mr. REED. Madam President, as a cosponsor, I rise today in strong support of the Currency Exchange Rate Oversight Reform Act. This is a bipartisan effort that will protect U.S. manufacturers from economic harm caused by unfair and damaging currency manipulation.


Unemployment throughout Rhode Island and the Nation has been persistently high and corrosive. It is caused in part by the effects of currency manipulation, particularly China's devaluation of the yuan. This is one of the challenges that manufacturers and hard-working individuals in Rhode Island and across the Nation face each day.


The effects of unfair currency manipulation have caused far too much harm for far too long. It has resulted in distorted trade balances that hurt U.S. workers and our Nation's economy as a whole.


Confronting Chinese currency manipulation sends a very strong signal. If implemented correctly, it will create jobs, aid our economic recovery, and lead to the creation of an estimated 1.6 million American jobs. Free trade only works when it is fair. China is not playing by the rules, and U.S. workers are harmed as a result.

China is, by any measure, keeping its currency artificially weak and engaging in trade practices that are harming the U.S. economy. By devaluing the yuan relative to the dollar, China is essentially subsidizing its exports and taxing U.S. imports at the expense of U.S. companies and workers.


It has been estimated that the yuan is undervalued relative to the dollar by as much as 40 percent, effectively subsidizing Chinese manufacturers and spurring our $273 billion trade deficit with China.


The Economic Policy Institute has estimated that the trade deficit with China has cost the U.S. economy 2.8 million jobs--1.9 million of these were manufacturing jobs--between 2001 and 2010. This resulted in approximately 12,000 jobs lost in Rhode Island.


A recent study by a team of three economists confirmed what many in my State already know: Jobs in Rhode Island are among the most vulnerable to cheap Chinese imports. And job losses are directly attributable to the U.S. trade deficit with China, which has been exacerbated by China's persistently undervalued currency.


Our trade deficit with China, which grew over 10 years from $83 billion to $273 billion, has had an outsized impact on my State because Chinese goods compete directly with many products that were produced and that will continue to be produced in Rhode Island. From textiles to toys, Rhode Island has been harmed as the artificially cheap yuan and exports from China have hollowed out industries, jobs, and communities.


If China and other Asian economies such as Singapore, Taiwan, Malaysia, and Hong Kong let their currency float freely against the dollar, U.S. GDP would increase by as much as $287.5 billion, that is a 1.9-percent increase, creating up to 2.25 million jobs in the United States.


So much of our efforts are focused today, and they should be, on growing our economy, measured not just by GDP but, more importantly, by jobs. This bill is one of those measures that is consistent with growing jobs in America and also respects the fact that in order for trade to work in the world, the trade has to be fair as well as free--that everybody has to follow the rules, and there is no exception. What we expect of ourselves, we should demand of others. That is at the heart of this bill.


Currently, private businesses in the United States are not able to compete on a level playing field with Chinese manufacturers and exporters who have an unfair advantage because the Chinese Government is manipulating its currency. Undervaluing the yuan isn't even in the best interest of the Chinese economy because it wastes resources and erodes wages of Chinese workers. The benefits of an undervalued yuan primarily flow to politically powerful Chinese companies dependent on trade, many of which are state owned.


According to China's own national economic census, Chinese state-owned enterprises control over 40 percent of the assets in their industrial sector. When countries stack the deck for companies and industries they control, it hurts businesses in the United States. This is not free trade or fair trade. Those who hold up China's economic growth and favorable tax conditions, as one Fortune 500 company CEO recently did, should realize this: After all, China has little reason to tax corporations when so many of the country's largest corporations are state owned.


We would not dare to suggest the form of ownership or government intervention in our economy China uses consistently and persistently as a major way to fund their government and fund their activities. So I think we have to recognize what is being posed in the guise of their version of free trade.


It is not fair trade, it is not free trade, and it doesn't even help the people of China. But it certainly helps the powerful forces of the Chinese Government and their favored business partners.


So we have a clear choice, and we have legislation that will be effective because it is consistent with what we do, which is follow the rules. We are simply asking every nation to follow the rules when it comes to currency.


The legislation before us today would level the playing field for businesses in Rhode Island and throughout the country. It requires the Department of Treasury to identify misaligned currencies using objective criteria and requires the administration to take action if countries fail to correct this misalignment.


It ensures that our trade laws can address currency undervaluation when it harms American workers and manufacturers by offsetting the benefit foreign producers and exporters receive from their country's currency manipulation.


The effects of unfair currency manipulation have caused far too much harm for far too long. It has resulted in distorted trade balances that have hurt U.S. workers and our Nation's economy as a whole. This legislation will strengthen the tools we have to make sure our businesses can compete on a fair and level playing field against foreign companies that benefit from undervalued currency.


Let me be clear that this is not a silver bullet for our economy, and there are many other steps we have to take. As we continue to press for solutions to revitalize our economy--with a front-and-center focus on saving and creating jobs--addressing unfair subsidies and trade practices must be part of this effort.


So I would urge swift passage of the Currency Exchange Rate Oversight Reform Act.


With that, I suggest the absence of a quorum.


The ACTING PRESIDENT pro tempore. The clerk will call the roll.


The legislative clerk proceeded to call the roll.


Mr. BLUMENTHAL. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.


The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.

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Mr. BLUMENTHAL. Madam President, I rise as a proud cosponsor of the Currency Exchange Rate Oversight Reform Act, S. 1619. We are all aware, in this Chamber and around the country, that China has been manipulating its currency flagrantly and blatantly at the expense of our businesses in Connecticut and New York and around the country at the expense of American workers. This measure is necessary to protect American jobs and American workers.


Chinese currency manipulation is a job killer, very simply. At a time when so many are desperate for work and so many Americans and citizens of Connecticut are seeking good jobs, this measure will help protect American workers and save American jobs, which is why I am proud to be a cosponsor of this measure.


I am proud to have begun this fight well before I became a Senator and well before I even thought of becoming a Senator, when I was attorney general of the State of Connecticut, because I heard from Connecticut businesses about the effects of Chinese currency manipulation in their efforts to sell their goods and services not only in China but around the world and even in America. Undervaluing Chinese currency puts American businesses at a disadvantage. It is a hidden export subsidy. It is a means of underpricing Chinese goods and services at the expense of ours. That affects not only our exports to China, but it affects our sales of airplanes in Europe, it affects the sales of all kinds of products--both high-tech and others--in this country, and it deprives the United States and its businesses of a level playing field.


The extent of that undervaluation is actually unknown, even as we speak. It is probably in the range of 25 percent. Economists tell us it is anywhere between 20 percent and 50 percent. The Chinese have permitted their currency to rise slowly, perhaps about 6 percent since June of 2010, but the extreme undervaluation before that period of time--in the years that led to June 2010--was relentless and tireless and successful. One of the great success stories of currency undervaluation is the Chinese doing so with theirs. We are at a point where, rightly, we have lost patience.


When I first asked the Treasury of the United States to label and conclude that China is a currency manipulator--months, even years ago--there was an opportunity to take the kind of action this measure would readily lead it to do, and it must do it now. This bill provides consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment and includes tools to address the impact of currency misalignment on American manufacturers, including the use of countervailing duty law to impose tariffs on imports benefiting from government subsidies.


Very simply, it provides tools that the American Government can and should use when there are misalignments of currency that result from government policies, and it eliminates some of the barriers in our current law that now exist and restrict the American Government from taking action to protect American businesses. So it is a good measure, a commonsense step toward fairness and a level playing field for American businesses, and it means we would protect ourselves, as we have a right to do in an ongoing trade war. It is a war, not a shooting war--perhaps not explicit--but it is a trade war we should acknowledge and recognize as a fact of life for our businesses.


All this talk about currency and renminbi and the abstract and seemingly arcane discussion, in economic terms, may seem far away to many citizens of Connecticut, but it is not arcane or abstract to Steve Wilson at Crescent Manufacturing of Burlington--a company that makes precision fasteners, many of them used in defense of our country, sold in this country as well as abroad. Crescent Manufacturing has hard-working, skilled workers who compete with Chinese manufacturers whose production costs are dramatically lower because of the undervalued Chinese currency. Steve Wilson came to me and said, in effect: Give us a level playing field. That is what this bill does. He said it not only on his own behalf, as a manager and an owner, but on behalf of his workers because the number of those workers was reduced as a result of the lack of a level playing field.


Earlier this year, I worked with my colleague in the House of Representatives, Congressman Chris Murphy, to conduct a survey of Connecticut manufacturers. We gathered data from 151 different companies all across the State of Connecticut, and the information they shared paints a dramatic picture of the business climate for companies in Connecticut and America today and the challenges they face as they seek to create jobs and stay competitive. Of 151 manufacturers that participated in our survey, 73 percent say they have Chinese competition--73 percent are competing with Chinese companies--and 57 percent--almost 60 percent of all those companies--said China's refusal to operate on a level playing field is harming their businesses. The majority of those companies that responded to that survey--manufacturers in Connecticut--say they want a level playing field or they are harmed by unfair practices in China's undervaluing their currency.


We all know, at this point, China deliberately manipulates its currency to boost its exports, and Connecticut manufacturers know it better than anyone. They have made it clear, if we are serious about keeping American manufacturing competitive, if we want to make it in America, if we want ``Made in America'' to mean what it should, and if we want our economy to grow, we need to stand up to countries that rig the system in their favor--unfairly in their favor.


The Alliance for American Manufacturing estimates our surging trade deficit with China--largely caused by Chinese currency manipulation--cost 2.8 million American jobs over the last decade, and that is 31,600 in Connecticut alone. These were jobs lost to our workers unfairly.


On March 25, 2011, the IMF declared that China's currency remains ``substantially undervalued.'' That is a serious charge from an international agency that is not biased toward one country or another, and it implies that China, in failing to address the undervaluing of their currency, is in direct violation of the General Agreement on Tariffs and Trade, which it has signed. Far from being contradictory to international law, this bill serves the interests and intent of the General Agreement on Tariffs and Trade. It serves article XXI of the GATT Uruguay Round and allows a member of the World Trade Organization and America to take action which it considers necessary for the protection of essential security interests.


Nothing is more essential to our security than jobs. Nothing is more critical than dealing with our trade deficit. Nothing is more important than stopping the undervaluation of the Chinese currency that consistently, unfairly, and unacceptably works against our exporters. We must fight these fundamentally unfair trade practices of China. American manufacturers deserve this level playing field, and this bill will help to assure that for them.


I will continue to fight to protect Connecticut manufacturers and businesses against any unfair trade practices anywhere in the world, and this bill stops China and any other country that would misalign its currency to the detriment of our security as a country and Connecticut's manufacturers and businesses as well as those in the country as a whole.

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Mrs. HAGAN. Madam President, I come to the floor as one of a bipartisan group of my colleagues, proud to be a cosponsor of the Currency Exchange Rate Oversight Act, legislation that will send a clear and direct message to China that the time for playing games with American jobs is over.


As many of my colleagues have already explained on the floor, the effects of China's currency manipulation are damaging to our economy. It is estimated that China is undervaluing their yuan by more than 28 percent.


What does that mean? It means Chinese goods coming into the United States are unfairly cheap, while goods made in the United States are unfairly expensive when they are exported to China. In other words, it means U.S. goods are less competitive in China, and Chinese goods do have an unfair advantage in the United States. The results of this distorted arrangement are harrowing: reduced American wages, decreased GDP, and lost American jobs.


Since China entered the World Trade Organization in 2001, our trade deficit with them went from $84 billion in 2001 to $273 billion in 2010, an increase of close to $200 billion. Madam President, $273 billion is larger than the U.S. trade deficit with the OPEC countries, the EU countries, Canada, Japan, and Mexico combined. This trade deficit has eliminated or displaced over 2.8 million American jobs over the last 10 years. That is an average of 310,000 jobs every year, and 70 percent of those jobs lost from our trade with China were in one sector--manufacturing.


Ask anyone in my home State, and they will say the same thing: North Carolina is a manufacturing State. From furniture to yarn, we are known throughout the country and throughout the world for the quality of the work we produce. But we are hurting. Between 2001 and 2010, North Carolina has lost over 107,000 jobs. Those are 107,000 jobs due to trade with China. Only five States in the entire country have suffered a greater net job loss from our country's trade with China. Across the country, the Nation has lost approximately 6 million manufacturing jobs and has seen 57,000 manufacturing plants across our country shut down.


Last week, I traveled throughout the foothill regions in North Carolina, in Burke, Rutherford, and Gaston Counties, three of our counties with some of the deepest manufacturing and textile roots in the State. The unemployment rate in these counties is close to 13 percent in Burke, close to 15 percent in Rutherford, and 11.3 percent in Gaston, even higher than the all-too-high 10.4 percent average across the State of North Carolina.


The No. 1, No. 2, and No. 3 concerns I heard at every stop I made last week were: jobs, jobs, jobs. There were people, many of them former manufacturing employees, who have lost their jobs. Many of them are continuing to work hard, fighting for small businesses that they now run and looking for survival. At the same time, so many people are attending every job fair they can make. They cannot afford for Washington to continue to allow China to get away with economic deceit and manipulation. They cannot afford for us to continue competing with China with one hand tied behind our back. What they need is for Washington to draw a hard line, to act now, and to get tough on China's currency manipulation.


The Currency Exchange Rate Oversight Act is straightforward. If the Treasury Department, using objective criteria, determines that the value of a currency is fundamentally misaligned, it will trigger a process to correct that unfair misalignment. In other words, it allows the United States to use every tool in our toolbox, including countervailing duties, to ensure that American workers and companies are competing on a level playing field.


A full revaluation of the yuan would mean 2.25 million jobs in the United States, reducing the U.S. unemployment rate by at least 1 full percentage point; an increase of the U.S. GDP of about $285 billion, a nearly 2-percent boost; and a reduction to our budget deficit by as much as $857 billion over 10 years. These are new jobs, more growth, and lower deficits. That is exactly the kind of bill our country needs right now.


It is going to require us to be tough. That is why America's workers and North Carolina workers need us to draw this line in the sand. They have always been told that if they work hard and play by the rules, they can get ahead. But now China is not playing by the rules, and it is undermining the ability of our workers and companies to succeed. We need to hold them accountable.


American and North Carolina workers are some of the best and most productive in the world. We know this. China knows this. If we compete on a level playing field, we can prosper together. I encourage all my colleagues to join in this bipartisan measure and vote for this bill. It is what America's workers and companies need, and it is what they deserve.

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Mr. CARDIN. Madam President, I rise to urge my colleagues to support the Currency Exchange Rate Oversight Reform Act, S. 1619, of which I am proud to be an original cosponsor. I wish to thank my colleague and friend, Mr. Brown, the Senator from Ohio, for his leadership in bringing forward this very important legislation.


This legislation is about jobs. We all talk about ways we can increase job opportunity in America. Yes, we have to


do a better job in our infrastructure and rebuilding America, our roads, our bridges, our schools, our energy infrastructure, our water infrastructure. That is a very important part of job growth in America. We have to help our small businesses.


The President is right to focus a program that will help small businesses because that is the job growth energy in America. But another area that is critically important for us on job growth is trade.


I represent the State of Maryland. The Port of Baltimore is an economic engine of our State, where we employ many people because of the Port of Baltimore. We want to see products that not only come into America, but we want to see products that leave America for the international marketplace. American manufacturers, producers, and farmers can out compete their competition anywhere in the world as long as we have a level playing field. If we have a level playing field, we will not only keep jobs in America, we will create new jobs in America because we can out compete the world. But we can't do it if we give away a huge advantage to other countries. Currency manipulation allows other countries to have unfair competitive advantage over American manufacturers, producers, and farmers. That is what this bill is aimed at: to give us a level playing field, to allow us to be able to compete fairly.


I also wish to acknowledge that this legislation is bipartisan. I think it is nonpartisan. This is legislation that makes sense for our country to keep jobs and create jobs. The legislation provides necessary mechanisms to help halt currency manipulation committed by any country. Currency manipulation is an unfair trade practice that reduces the price of imported goods while raising the price of American goods.


We are talking about giving a discount to our competitors. How do we expect an American manufacturer to be able to compete with an imported product if they get a discount on the price? That is what happens when they arbitrarily undervalue their currency as a foreign competitor, and that is what is happening to American manufacturers. Trying to end this practice is just common sense and will finally allow us to address our net exports, helping us reduce trade imbalances and, most importantly, create jobs in America.


Of course, China is one of the largest abusers of this type of manipulation. Despite a pledge from China in 2001 to adhere to open and fair trade, it continues to violate global trade rules which, in turn, erodes the U.S. manufacturing base and economy.


One of these market-distorting practices is China's effort to keep its currency severely undervalued. Unlike other currencies, the Chinese yuan does not fluctuate freely against the dollar but is artificially pegged in order to boost China's exports. Bringing the Chinese yuan to its equilibrium level at 28.5 appreciation is essential to creating much needed jobs in this country as well as a fair and global marketplace.


Let me repeat this. Because of what China does on pegging its currency to ours, not allowing it to freely fluctuate, Chinese products, in effect, get a 28.5-percent discount. If a company is manufacturing a product and trying to compete with an imported Chinese product, how can they do that if their competitor gets a 28.5-percent discount? That is what is happening in America today.

This legislation would allow those who are being harmed by this unfair trade practice to be able to bring a trade remedy against that unfairly imported product.


Inexpensive Chinese imports have caused a great deal of harm to the U.S. manufacturing sector. New studies show that 2.8 million American jobs, including 1.9 million manufacturing jobs, were lost or displaced over the past decade due to the growing U.S. trade deficit with China, fueled, in part, by currency manipulation.


So we have documented millions of jobs that we have lost and that have been lost because we have allowed, without challenge, China to give discounts to its manufacturers bringing products into America. Again, if it is a level playing field, American manufacturers and producers can compete. But they can't compete with such an unfair trading practice.


Many U.S. industries have been hard hit by unfair trade practices and currency manipulation, impeding their ability to compete here and abroad. The Alliance for American Manufacturing says that addressing this currency manipulation would lead to the creation of up to 2.25 million American jobs, an increase in the U.S. gross domestic product of $285.7 billion, a 1.9-percent--or $190 billion--reduction in our annual trade deficit;


finally, an annual deficit of $71 billion, or between $600 to $800 billion over the next 10 years, if sustained.


No wonder this is bipartisan. No wonder this is nonpartisan. Here, by just standing up for American manufacturers and allowing them to be on a level playing field, we can not only increase jobs in America, we can not only reduce the trade imbalance, we can also reduce the budget imbalance. All that can be done if we can establish a level playing field to give our manufacturers, producers, and farmers the opportunity to challenge this unfair practice. That is what this legislation does.


With figures such as this, this bill is seemingly a noncost, bipartisan, long-term jobs measure. This would not only spur economic growth but economic stability that would ensure a better and more secure future for U.S. manufacturers, workers, and communities. This is to keep jobs here in America but also give us the opportunity to create more jobs, helping our economy grow. Simply put, this legislation will allow U.S. manufacturers the ability to use existing countervailing duty laws to obtain relief from injury caused by imported goods which benefit from currency manipulation as export subsidies while also providing the U.S. Treasury a new framework by which to identify misaligned currency.


In September 2010, the House adopted a similar measure with overwhelming bipartisan support. Passage here in the Senate will lead to real consequences for countries that abuse currency manipulation, and empower the United States to create a more level economic playing field.


We can get this done. This is something that can get done. The House has already passed it. We have bipartisan support in the Senate. We have the votes to pass it. I urge my colleagues, let us get this done. Don't try to put other amendments on it. All they are going to do is make it difficult for us to achieve something great for our economy and great for American production. Let's get this matter up for a vote and not try to do all these unrelated amendments.


I applaud my colleague Senator Brown from Ohio. He is on the floor. I mentioned earlier I thank him for his leadership for not only bringing this bill together but keeping the bipartisan group together so we can show we can get this done. Now we need the Members of the Senate to say it is time for us to vote on this bill. Let's get it done. Let's send it to the President for the President to sign it. Let's do something that will not only create jobs but help us deal with our trade imbalance and deal with our budget imbalance.

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Mr. BROWN of Ohio. Madam President, I appreciate the words of Senator Cardin. He sits on the Finance Committee and was a long-time member of the House Ways and Means Committee and understands these issues as well or better than almost any Member of the Senate. I appreciate his work on that, and his leadership. He said a couple of things I want to emphasize.


He said, first of all, this is the biggest bipartisan jobs bill we have considered this year, 79 votes out of 98 when it advanced to being considered on the Senate floor. He has talked about this is a discount we give to our competitors. Imagine two gas stations in Schenectady, NY, or in Frederick, MD, or in Akron, OH. One gets its gasoline and pays 25 or 30 percent less for its gasoline than does the station across the street. The station that does not get the 25- or 30-or 35-percent subsidy goes out of business almost in a matter of days. That is the kind of unfair competition we face because we have given this discount to our competitors.


The second is Senator Cardin mentioned what this does with our budget deficit. It is pretty clear this is not a jobs bill that costs a lot of money. That is why we got 79 votes. That is why so many Republicans joined all but three Democrats in moving this bill forward. We save money. If a thousand more people go to work in Cleveland, OH, or in Buffalo, NY, or in Baltimore, MD, that is a thousand people who are not receiving unemployment benefits, who do not have to apply for food stamps, a thousand people who are paying taxes instead of being consumers of public services.


When you look at the lost jobs because of this trade policy, because China has gamed the currency system for so many years and administrations of both parties have failed to enforce laws or use the tools they have--in addition to this extra tool, this very compelling, very effective tool we are giving them--it clearly has meant that we have been behind the eight ball in that way and we have lost the opportunity when we have not enforced these trade laws.


When you look at the number of jobs lost and the number of jobs estimated to be gained, it is in the millions over time. This is exactly what the Senate should be doing this week, moving this bill to the House. There are 250 cosponsors in the House, 60 Republicans, roughly, 190 Democrats, roughly. Republican leadership has some difficulty with this bill, apparently. In the Senate, that is not an issue. In the House, among rank-and-file Members there is huge support.


As we pass this bill later this week, next week at the latest, we hope to move it to the House where it can be passed quickly.

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Mr. BROWN of Ohio. Mr. President, as the manager of this bill and the sponsor of S. 1619, I am, first of all, pleased with the bipartisan support we have seen. We have five Republican and five Democratic sponsors as the lead 10 sponsors and another dozen or so sponsors in addition to that.


The support from Senators Graham and Sessions and Burr--all three southern Republicans--and Senators Snowe and Collins--northern Republicans--joining with the first five Democratic sponsors, Senators Schumer, Stabenow, Casey, Hagan, and myself, have set the bipartisan tone here. That is why we had 79 votes in the first go-round on the bill.


But what concerns me most, and what I hear from people in the House of Representatives--and I have heard it from opponents in the Senate, and I have heard it from large multinational corporations that have outsourced so many jobs to China--is this is going to start a trade war with China. That seems to be the thrust of their comments: This is going to start a trade war.


First of all, I don't know where they are that they think that because most of America thinks we are in a trade war right now with China and, frankly, China is doing pretty darn well. It is not going that well for American workers, and it is not going that well for American manufacturers.


Go to downstate Illinois or Albuquerque or Akron and look at the number of plant closings. In many cases, companies--large companies especially, because smaller companies can't do this the same way--will shut down their production in the United States--they will shut down production in Youngstown or Dayton--and they will move to Wuhan or Xian, China, start production there, and then sell their products back to the United States. I don't know that that has ever been done in world history.


So the trade war was started by the Chinese, waged by the Chinese, and that is why we have lost 100,000 manufacturing jobs in my State.


That is why we have seen the trade deficit triple in the last 10 years with China. That is why we go to the store and darned near everything we pick up, including sometimes American flags and things you can buy at the Capitol Visitor Center, are made in China. It is clear China has cheated. They cheat on currency. They just cheat, pure and simple. It is long overdue that we do something about it.


They were admitted to the World Trade Organization because of a very bad vote 10 years ago that too many of my colleagues cast in support of China doing that for PNTR. The Presiding Officer, as I did, voted against it. The Presiding Officer from New Mexico was prescient enough to see that. But they said, if you let China into the WTO, they are then going to be a trading partner and they will play fair. Well, they never have accepted, frankly, the basic governing rules from the World Trade Organization. They don't follow the rule of law. So when we say, no, we are not going to let them do that, we are accused of a trade war. Excuse me, I don't understand that.


It is a little bit like two sort of real-life examples. If somebody is eating your lunch and you take their dessert away, they are complaining? Of course they are going to complain. They want their dessert. But they can't say you are starting a war when they are already eating your lunch.


Or if you have two gas stations, you go to Springfield, OH, and there is a gas station on one side of the street and another gas station on the other side of the street, the one gets a 30-percent discount on its oil for its gasoline from Shell, and the one from Exxon on the other side of the street doesn't get a subsidy on its oil or its gasoline, of course, the one is going to put the other out of business.


That is what we do to China. We give them a 20- to 30-percent discount because they cheat on currency. And you call that a trade war because we are saying, no, we are taking that discount away? It is China that has played this protectionist game.


Mr. Fred Bergsten, who is the director of the Institute for National Economics, the Peterson Institute, hardly a flaming liberal--free fair trade group; it is a conservative, generally free trade organization--said that China's currency policy is the most protectionist policy of any major country in the world since World War II. And for us to say, Let's play fair, we are starting a trade war? It doesn't make sense.


Let's debate the real issues. Let's not call names. Let's not say so-and-so is starting a trade war, so-and-so is protectionist, so-and-so is doing class warfare. We want more exports, we want more trade. But, remember, currency undervaluation makes our exports more expensive when we sell them into China and puts our manufacturers at a competitive disadvantage.


I think this legislation makes so much sense. That is why it got 79 votes. That is why it has such a high number of bipartisan cosponsors. That is why people in this country understand that passing this legislation to level the playing field, to give our manufacturers an opportunity, makes so much sense.

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Mr. KIRK. Mr. President, I would like to take this time to talk on the pending legislation with regard to China. In these times of deficit and debt, I think we should not launch a trade war with China. We are here because we borrowed too much. We have a spending habit that has weakened our economy. That spending habit was aided by China, but we can only blame ourselves for much of the economic weakness the United States now faces.


A trade war with China would put in jeopardy a number of jobs from my State of Illinois. Illinois exports to China in 2000 totaled about $533 million. Roughly 2,500 people received their employment by virtue of sales to China 10 years ago. Today, exports to China total about $3.18 billion. The number of people employed by sales to China has grown from around 2,500 jobs to 15,000. In a State with a higher than average unemployment, where unemployment is growing faster than almost any other region of the country, I do not think we should put these jobs at risk with an unnecessary trade war with China.


When we look at Illinois very directly, we see a major Peoria employer like Caterpillar, whose sales to China last year totaled about $3.2 billion roughly related to about 10,000 jobs in the direct and contractor and subcontractor area for sales to China. With Motorola, based in Schaumburg, sales totaled about $2 billion directly to China, impacting about 7,000 jobs. For Boeing, headquartered in Illinois, sales to China totaled about $3 billion--around 10,000 jobs directly related to sales into the Chinese market.


This bill would seek to blame all of our economic ills on a power overseas despite so much of the weaknesses related to our own overregulation, a flawed health care bill, and too many taxes that are causing small employers--the engine of employment in our country--to hold back on hiring an American full time. I believe this bill places the blame in the wrong place and diverts the needed attention of the Senate from where it should be placed in fixing our economy.


For 10 years, I served in the House of Representatives. In 2005, during that rendition of anti-Chinese legislation, I decided to form a bipartisan caucus, the China Working Group, with Democratic Representative Rick Larsen of Washington. We decided to bring together the three warring China tribes of the House of Representatives. That would be the panda huggers, a very small number of Members; the dragon slayers, a very large number of Members, especially on my side; and the panda slayers, who are growing in number, who dislike almost anything related to China. We welcomed everyone to discuss China because of its growing role in the world because, according to one of our leading banks, China could be the largest economy on Earth, replacing a status that the United States had until our policy was misplaced and that we have had since around the 1870s.


Should we trigger a trade war with the coming largest economy on Earth? I would say we should not. In the 21st century, China can be the source of the greatest ill or greatest good for the United States, depending on how we manage this relationship.


One of the key audiences I listened to, as chairman of the China Working Group, with Congressman Larsen, was Americans who actually sold American-manufactured goods in China. Oftentimes, we would ask: Is your No. 1 concern with regard to selling more


goods in China related to the currency? Overwhelmingly, they would say it was not their No. 1 concern. Their No. 1 concern instead was the comprehensive theft of intellectual property by Chinese entities from U.S. patent holders. This is most clearly evidenced in the Hollywood DVD industry but also elsewhere. When you look at this issue in a serious way, you find currency is not the No. 1 issue, although I admit it polls rather well. But our job is to actually add employment to the United States, and one of the key audiences we should listen to is people who sell U.S. goods in China.


If you delve into the intellectual property issue and the comprehensive theft of intellectual property, you will find that China has some fairly reputable intellectual property laws, but they are not enforced. A common thing you hear about China is a phrase that is often used in the Chinese language. It goes something like this: The mountains are very high and the Emperor is far away, meaning despite laws that may be on the books in Beijing, they are not enforced in the provinces where so much theft of intellectual property happens.


I would argue that a bipartisan agenda that would add to jobs and strengthen our relation with China would be a greater enforcement of intellectual property laws between the United States and China. There, we would actually have allies, such as the man who is most likely to become President of China, Xi Jinping, who wants China to be a strong innovator, and he knows China cannot be an innovative nation if it represents a comprehensive theft of intellectual property worldwide. He knows China's intellectual property law has to be actually enforced in the provinces if they are to have technological development. His interests are actually in line with the interests of U.S. exporters, and here we could have a very productive dialog which actually stops the theft of intellectual property in China and enhances the export potential of Americans.

I worry that we are diverting the time of the Senate from the big game, which is the joint committee and its work on reducing the deficit. I have heard that the President of the United States has called Senators, asking that this bill not come up. When you look at the prospects for this legislation in the House, you will learn the prospects for this legislation are dim at best.


What should we do rather than trigger a trade war with a country that is about to be the largest economy on Earth? What should we do rather than trigger job losses at Caterpillar and Motorola and Boeing, at Schaumburg and Peoria and in Chicagoland? I think instead we should focus the Senate legislation on passing the Gang of 6 legislation that would reduce the net borrowing of the United States by $4 trillion. We should adopt the Collins moratorium on job-killing regulations costing over $100 million to reassure the engine of our job economy--small businesses--that they should go ahead and begin to hire Americans again. We should do the big idea that is in the bipartisan deficit commission report of tax reform, wiping out all special interest tax provisions and then using the money, A, to lower the deficit and, B, to lower the top rate from 39 percent to 29 percent. We should also rapidly pass, as has now been proposed, the Panama and Colombia and South Korea Free Trade Agreements that open new markets for the United States. Particularly in the case of Colombia, the markets would be opened for Illinois corn growers. For South Korea, I think it would end the beef impasse we have had and also open high-technology aviation markets for the United States.

When I talk about the Gang of 6, when I talk about the Collins amendment, when I talk about tax reform, when I talk about free-trade agreements--these are all positive agreements on which large numbers of Democrats and Republicans in the Senate can agree and which would pass the House of Representatives, rather than the underlying legislation which the President of the United States has indicated he would rather not come up, which has a dismal future in the House of Representatives, and which directly puts at risk any job subject to Chinese retaliation from this legislation.


I also note that when you read the basic text of this legislation, it is not serious because it has a big waiver in it. Even if it made it to the President's desk, given his calls to legislators on this issue, there is no doubt in my mind that the President would execute the waivers in this legislation.


So what are we doing? We are probably advancing a well and poll-tested piece of legislation in the Senate. I imagine some people would want to take advantage of that dialog. But have we made it into enacted law? Overwhelmingly, likely no. Are we actually going to take any legitimate action? Even by the terms of the legislation and its waiver, it would be exercised by the chief executive


officer of the United States, and therefore no action would be taken. But we would open the very people whom we want to crawl this economy out of recession--U.S. exporters--to

vulnerabilities for retaliation by the Chinese. Sometimes you have to think about the basic principle of medicine when you look at legislation; that is, first, do no harm.


As Europe crumbles in a wave of outdated and out-of-gas socialism, threatening our economy, as we teeter on the edge of a new recession because of too many regulations--10 new taxes in the health care bill--and an uncertain political future for deficit reduction under the bipartisan joint committee, ladling onto that--and our markets and the future of our retirement savings--a trade war with the second largest economy on Earth would be unwise at best and put the jobs of many Americans at risk at worst.


That is why I oppose this legislation. That is why, regardless of the action in the Senate, I do not think it is going anywhere in the House. Certainly, given the action and calls of the President to certain legislators, it doesn't appear to have any real future in enforcement if it ever even did make its way to the White House.

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Mr. BROWN of Ohio. Mr. President, I appreciate the words of my freshman colleague, Senator Kirk. I think he recognizes from his days as a foreign policy expert, when he worked for the government on foreign policy, that a Presidential waiver is essential. My guess is he would have attacked this bill if it had not had a waiver for the President, saying there is no way the President could possibly look out for national security at the same time as he executes this legislation.


So that clearly is a nonstarter around here. Everybody recognizes that not having a Presidential waiver--because there is a case sometimes when the President does need the authority when it comes to national security, and I am concerned about national security in our trade with China. I have seen China, over a period of years--with our acquiescence as a nation, frankly--I have seen China build more and more national security infrastructure and in some cases seeing our national security infrastructure weakened because we don't do as well with steel and chemicals and all the things that go into our national security apparatus. So I am, in fact, concerned about that.


I am also concerned; I hear two things, two main arguments. I have sat on the Senate floor as the manager of this bill for several hours over the last couple or 3 days and listened to this debate. It seems the Republicans' opposition--most Republicans voted for this, so I don't want to say it is overwhelming, but the people who have spoken against it have mostly been conservative Republicans who seem to pay a lot of attention to Club for Growth and those most conservative parts of their party. But I have heard two things. I have heard ``trade war, trade war, trade war,'' and that is interesting because that echoes the words of the People's Bank of China. It echoes the words of the Ministry of Commerce of the People's Republic of China. It echoes the words of the Foreign Affairs Ministry of the Communist Party of the People's Republic of China. It mimics their words when I hear them say ``trade war, trade war, trade war.''


But what also concerns me is I listen to this debate and hear some of the opponents of this bill kind of playing the ``blame America first'' game. They seem to say this is not China doing this to us, this is us doing this to us--or perhaps we doing this to us, to be more grammatically correct. I am aghast that China games its currency system, that China undercuts our manufacturing because they ``cheat,'' and that there are some Members of the Senate who stood up right here and took the oath of office to the United States of America who are blaming America first for what China is doing to us.


I can see blaming our government for not enforcing trade rules better. President Obama, while he has not come out yet for this bill, has enforced trade laws better than any President since Ronald Reagan, who actually probably set the gold standard for trade enforcement.


We haven't seen it since President Obama. I am a bit intrigued that my colleagues are blaming the United States for this. It is a little like if there are gas stations on Detroit Avenue in Cleveland, in Westlake or in Rocky River or in Cleveland, one on each side of the road and one gets the gas 25 percent cheaper than the other from the supplier--from ExxonMobil or Shell--they can put the other one out of business. Do we blame the one that doesn't get the discount for going out of business? Is that what we are doing? To blame America first on this is blaming the United States when China cheats, and I don't buy that. I don't think there is any credence in that argument.


I appreciate Senator Kirk's admonition, and I appreciate his celebration, if you will, of Caterpillar and many of these companies that are exporting tens of millions and, in a few cases, billions of dollars to China. More power to them. I want them to do more exports.


Look at this chart. Look what happened. Exports to China have gone up. The year 2000 was when this Senate and the House--where the Presiding Officer from New Mexico and I sat--voted no on this when PNTR, permanent normal trade relations, with China was passed. Look what happened since then. Exports to China went up. I am glad U.S. exports with companies all over our States--Senator Kirk mentioned a handful in Illinois--went up. Look what happened to imports. Look at the number of imports that went up. Do we know why? Part of that reason is China has cheated on currency. When we did the first vote on Monday night--and all of us predicted what the Chinese Government is going to do. They are going to squawk and say: trade war, trade war, trade war. I didn't know a bunch of American politicians would mimic what they said and say: trade war, trade war, trade war.


Here is what happened--listen to this--an article in the South China Morning Post on October 5, the day after that vote: In a rare move, the central bank, the People's Bank of China, the China Ministry of Commerce, the People's Republic of China's Foreign Affairs Ministry took simultaneous, coordinated action yesterday to express Beijing's strong opposition to the bill, aimed at forcing Beijing to let its currency float. They accused Washington of politicizing global currency issues.

Where I come from, they say when you throw a rock at a pack of dogs, the one that yelps is the one you hit. Of course, the Chinese are going to yelp because they don't like this. We are saying to them they have to follow the rules--no more breaking the rules. They cannot cheat the way they have cheated.


Of course, in the Communist Party, in the People's Republic of China, the Ministry of Commerce is going to squawk. Of course, the People's Bank of China is going to squawk. These are all arms of the Chinese Communist Party and arms of the Chinese Government. Of course, they are not happy when we do this. It does not mean it is not the right thing to do.


It bothers me when I see American politicians mimic what the Chinese Communist Party officials are saying, their government is saying: trade war, trade war, trade war. This is not a trade war. Fred Bergsten, head of the Peterson Institute for International Economics, is a trade official--I believe an economist. He is very smart. The Peterson Institute for International Economics is a generally conservative operation that generally plays it straight on trade. If anything, they are a bit too free trade, in my mind, instead of fair trade. Fred Bergsten said:


I regard China's current policy as the most protectionist measure taken by any major country since World War II. Its currency manipulation has been undervalued by 20 to 30 percent.


Here is the key point:


That is equivalent to a 20 to 30 percent subsidy on all exports and a tariff on all imports by the largest trading country in the world.


The 30-percent penalty is why our exports don't go up very much. The 25-percent bonus for the Chinese is why our imports go up so much. We cannot sell into China's market very well because they are cheating. That is why our exports don't grow as much, and they can sell so much into our markets because we are giving that 25 or 30 percent bonus.


This isn't a trade war--well, it is a trade war. The Chinese declared trade war on us in 2000 and look how they benefited from this trade war, and we are just going to stand here and allow them to do that? It doesn't work. That is why this legislation is so important.

Last point. There are an awful lot of American businesses that think we need to fix this. I hear my friend from Illinois and other Senators come to the floor who oppose this bill. There are only 19 who voted no out of the 98 who voted. I have heard them come to this floor and talk about exports, that their businesses have exported. Some have and more power to them. I hope they can export more and create more jobs in the United States. We need to understand that those are mostly large companies that have in some cases the wherewithal to outsource jobs to China and in other cases to be able to export large numbers.


There was a historic split in the National Association of Manufacturers, the largest trade organization for American manufacturers, over the last several years on what to do about this.


Many of the small companies such as Automation Tool & Die in Brunswick, OH, and a company in Dayton that does printing, where I just spoke to Jeff Cottrell, who owns that company and has a number of employees in Dayton, OH--those companies understand currency undercuts them. The Bennett brothers at this company in Brunswick told me in Cleveland a couple days ago why they support this bill. They said they had a contract they thought was a million-dollar contract, and they began to change their assembly line, their production facilities, their production operation capacity. At the last minute, a Chinese company came in and underpriced them by 20 percent and got the contract. Why did they underprice them 20 percent? Because we gave them a 25-percent bonus to do it. We have disarmed this trade war that we are not beginning. We are playing defense and we are fighting back.


I think the American public overwhelmingly says fight back when they play the games, fight back when they game the system. Don't blame America on this one. Stand for American interest. It is good for our exporters, big companies and small companies alike. It is good for American manufacturing. We know what that means to workers in Chillicothe, Zanesville, and Toledo. We know what it means for our local vitality and prosperity. It means so much as we begin to restore American manufacturing.

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Mr. PORTMAN. Mr. President, exports are absolutely critical to our economic growth in this country. In fact, there are nearly 10 million good-paying American jobs that are related to exports. The President, Members of Congress, and so on talk about that a lot. But I am disappointed we are not moving forward with an aggressive agenda to actually open new markets for our exports.


I am encouraged that the administration, finally, this week, sent forward three trade agreements that do just that--the Korea, Colombia, and Panama trade agreements. These open markets to U.S. workers and farmers, those who provide services, so it is going to be good for jobs in this country. The President's own metrics indicate these three agreements alone will create 250,000 new jobs. We need them badly.


I also want to congratulate Chairman Dave Camp and the House Ways and Means Committee for reporting out all three of these agreements this afternoon. My understanding is, each agreement received a strong bipartisan vote, and I am hopeful those agreements will now come to the Senate for us to be able to move forward--again, opening these critical markets that will create over 200,000 jobs for Americans.


I will tell you, these three agreements were all negotiated and signed over 4 years ago. During that interim period, the United States has been absent from the kind of trade-opening negotiations we ought to be involved with. This President--for the first time since Franklin Delano Roosevelt--has not asked, as his predecessors did, for trade promotion authority to be able to negotiate new agreements. So we are losing market share.


Every day there are American workers who do not have the same opportunities to compete in foreign markets as those workers from other countries do because the United States is not actively engaged in opening markets. We need to do that.


Right now, we have no ongoing bilateral trade agreements. We have one multilateral agreement, which I support moving forward on--the Trans-Pacific Partnership--but, frankly, there are over 100 bilateral negotiations going on right now, and America is not a partner in any of them. We need to get engaged because it is so critical to growing our economy.


During the debate we have had over the last couple of weeks on trade adjustment assistance, where I was supportive of a version of trade adjustment assistance to get the trade agreements moving, we had a discussion about giving the President trade promotion authority. We were not able to get support from the administration for that. This is critical to move forward. It is because growing goods and services is absolutely critical to our economic health.


Over 95 percent of consumers in the world, of course, live outside of our borders. We want to access those consumers, we want to sell more to them. Export growth and a healthy trading system depends on these export-opening agreements, but it also depends on having a healthy international trading system where all the players play by the international rules. So the export-expanding agreements are good. We need to do more of that. We should be much more engaged, but we also have to insist that everybody plays by the same rules.


Today the Senate is debating legislation that has to do with one of those rules, and that is the issue of currency, and specifically the issue of China and their currency manipulation. China is a country, as you know, where we have a persistent and unprecedented trade deficit. It is also a very important trading partner for us. So it is critical we keep that strong trade relationship but do it on a basis that is fair for us and for China.


I consistently hear about this China currency issue when I am back in Ohio. I hear about it a lot from manufacturers and the workers at those plants who tell me it is just not fair that in the global marketplace Ohio products are not able to compete on a level playing field.


Just this year I have worked with a lot of Ohio companies that are facing various problems, including Ohio candle makers, steel manufacturers, diamond saw blade producers, rare earth magnet manufacturers, and others who are concerned about getting a fair shake in the global economy and want to be sure they are not competing with unfair Chinese competition.


Again, I believe in the benefits of trade. I know they work. I believe in reducing barriers, but I also believe opening export markets and vigorous enforcement of trade laws go hand in hand. They both should be something that the United States pursues.

China's undervalued currency does provide, in my view, an export subsidy, making Chinese exports to the United States less expensive in the global marketplace and making our exports to China relatively more expensive.


I have long had concerns about this. Actually, when I was before the Senate Finance Committee in my confirmation hearings to be U.S. Trade Representative years ago I stated that I believed China currency does affect trade, and I stated that China should revalue their currency. I still believe that. I believe this administration should label China a currency manipulator because I think it is clear there continues to be manipulation.


The legislation before us today is not the perfect answer, and I do hope the Senate will permit my colleague, Senator Hatch, to offer his amendment, which I think is a constructive amendment to improve parts of the legislation. But I do support the bill with the expectation that it is compliant with our international trade obligations and that it gives the administration the flexibility it needs to implement this bill in a smart and sensible way.


However, I would also say this bill has been described on this floor many times over the last couple days as I have listened to the debate as doing more than it does. We should not overstate it. It does not address some other issues that, frankly, I think would make a bigger difference in our important trade relationship with China.


One of these issues would be indigenous innovation, which I believe to be an unfair practice that China is currently practicing. Also, there is the issue of violations of intellectual property rights. It is not so much that the laws are not in place; it is that many times there is not adequate enforcement of the intellectual property laws that are in place. Of course, there is the issue of anticompetitive practices and subsidies that continue with regard to state-owned enterprises. I am also working with Senator Wyden and others--a bipartisan group of Senators--on combatting transshipment and customs duty evasion problems, which involve companies from various countries but include China.


So we have a growing list of complex issues facing our relationship with China. I believe they should all be addressed together. I hope the next round of diplomatic and commercial negotiations with China will bring about some of that discussion and bring about some solutions, not just more broken promises.


I understand the JCCT, called the Joint Commission on Commerce and Trade, between the United States and China will meet in November--next month--and that the next round of the U.S.-China Strategic and Economic Dialogue will take place next year. I urge the administration to use these negotiations as leverage to get some of these real results that are so necessary.


We should also look at multilateral approaches, including the World Trade Organization, and certainly the International Monetary Fund. I will tell you, as someone who has sat across the table in negotiations with tough Chinese negotiators, endless dialog is not the answer. Sometimes that is what occurs. We are not just looking for more talk. I think it is important we get serious--both U.S. leaders and Chinese leaders--about some of our lingering trade problems that we have had through the years so we can have a healthy trade relationship based on mutual respect.


Each country is important to the other. We cannot


overlook the fact that China continues to be a very vital U.S. export market, despite the issues I talked about. Right now, China is the third largest export market for Ohio goods, for instance. The State I represent sends over $2.2 billion a year in exports to China. With 25 percent of Ohio manufacturing jobs dependent upon exports, this is incredibly important to us.


One out of every three acres of land in Ohio is planted for export, so agricultural exports are also important. There is also an important issue with China that relates to investment both ways: our investment in China and Chinese investment here. Let me read to you from an editorial that was in the Cleveland Plain Dealer last Thursday. Its title is: ``Chinese investors are welcome here.''


If Greater Cleveland is going to prosper in the 21st century, it has to build strong two-way connections with the rest of the world. The region has to sell more of its services and products abroad and welcome talent and capital from overseas. That's the path to jobs and wealth.


The editorial goes on to talk about the collaboration between Chinese companies and investors looking to build relationships with Cleveland's world-renowned medical device industry.


Just last week, the mayor of Toledo, OH, Mike Bell, returned from a 12-day


trade mission to Asia in order to boost job creation in northwest Ohio. Since Mayor Bell's trip, plans have been announced for increased commercial ties between Chinese and Ohio job creators and companies, including launching a new international business center in downtown Toledo.


These are just a couple of examples in my State of the importance of this relationship and why it needs to be taken so seriously. This relationship is vital to the future not just of our two countries but, in my view, to the global economy. So we need to be sure, again, it is a healthy relationship. It needs to be fair. It needs to be on a basis where, again, there is a level playing field on both sides. So it is time for our trading partners to play by the rules so that, indeed, we can have a fair trading system.


Trade is key to growth. But, again, it is only one part of a broader problem that is holding back our economy today, holding back Ohio manufacturers from hiring and innovating. Another big issue that has come to the attention of this Senate time and time again is the incredible regulatory burden that is placed on Ohio's job creators. So in order to be successful in trade, we need to have more open markets. We talked about that: a level playing field. But, also, we need to be more competitive at home or else we are not going to be able to create the jobs in this century that we need to keep our economy moving forward.


At a time when we have over 9 percent unemployment, it is critical we be sure our economy is more competitive. This regulatory burden is one issue that I think all sides can agree ought to be addressed.


I am joined today by the junior Senator from Nevada, my friend and colleague, to offer a couple of amendments designed to give American employers some relief from the regulatory mandates that continue to hold back our economy and hinder job creation.


There is no official counting of this total regulatory burden on our economy, and estimates do vary. But one study that is often cited is from the Obama administration's own Small Business Administration where they report the regulatory costs exceed $1.75 trillion annually. That is, of course, even more than is collected by the IRS in income taxes every year. So it is a huge burden. We can talk about what the exact number is, but the fact is this is something that is forcing Ohio companies and other companies around our country to have higher costs of creating a job.


The Office of Management and Budget estimates that the annual cost of a narrow set of rules--these are just what are called the major rules that are reviewed by OMB over one 10-year period--registers at $43 billion to $55 billion per year.


I have been encouraged by what the current administration has recently been saying about regulations. I have been less encouraged about what they have done. The new regulatory costs on the private sector are real, and they are mounting.


Compared to historic trends, we have seen a sharp uptick over the last 2 years in these new so-called major or economically significant rules that have an economic impact of over $100 million on the economy. They also have an impact, of course, on consumer prices and American competitiveness.


George Washington University Regulatory Studies recently told us that this administration has been regulating at an average of 84 new major rules per year, which, by way of comparison, is about a 35-percent increase from the last administration and about a 50-percent increase from the Clinton administration.


These figures do include the independent agencies which must be included in the calculations. So there has been an uptick in regulations, and continues to be, again, despite much of the rhetoric to the contrary. One commonsense step we can take to address this issue is to improve and strengthen what is called the Unfunded Mandates Reform Act of 1995, UMRA.


I worked on this along with some of my colleagues who are now in the Senate back when I was in the House. It was a bipartisan effort that basically said Federal regulators ought to know the costs of what they are imposing. We also ought to know what the benefits are, and we ought to know if there are less costly alternatives.


The two amendments I am offering today are drawn from a bill that I introduced back in June called the Unfunded Mandates Accountability Act. It is an effort that now has over 20 cosponsors. Again, it seems to me it is a commonsense effort that should be bipartisan.


The first amendment would strengthen the analysis that is required in some very important ways. First, it requires agencies to specifically assess the potential effect of new regulations on job creation, which is not currently a requirement, and in this economy it must be. Also, to consider market-based and nongovernmental alternatives to regulation, again, something we need to look at.


It also broadens the scope of UMRA to require a cost-benefit analysis of rules that impose direct or indirect economic costs of $100 million or more. It requires agencies to adopt the least costly and least burdensome alternative to achieve the policy goal that has been set out. So, currently, agencies have to consider that, but they do not have to follow the least costly alternative. We simply cannot afford that, again, because of the tough economic times we have.


The second amendment extends those same requirements to the independent agencies. This is incredibly important, and these are agencies such as the Commodity Futures Trading Commission, the newly formed Consumer Financial Protection Bureau, agencies that are very important on the regulatory side and are currently exempt from these cost-benefit rules that affect all other agencies.


On this issue I was very pleased to see that President Obama issued an Executive order in July which was specifically related to independent agencies. That order and the accompanying Presidential memorandum called on independent agencies to participate in a look-back, but also, very importantly, called on independent agencies to evaluate the costs and benefits of new regulation just as, again, all executive agencies were already required to do.


It is a step in the right direction, but the problem is that the President's order is entirely nonbinding because a President cannot require independent agencies to do that. Congress can. We can do it by statute. And independent agencies do not answer to the President. So since this order was issued in July--by the way, we have not seen a rush by independent agencies to pledge to comply with these principles. Again, they are not required to, so this amendment, this second amendment, would effectively write the President's new request into law so it can be effective.


Independent agencies would be required under UMRA to evaluate regulatory costs, benefits, and less costly alternatives before issuing any rule that would impose a cost of $100 million on the private sector or on State, local, and tribal governments. The fact is, independent agencies are not doing this on their own. According to a 2011 OMB report, not one of the 17 major rules issued by independent agencies in 2010 included an assessment of both cost and benefit. Not one.


Closing this independent agency loophole is a reform we should be able to agree with on both sides of the aisle. Certainly, the President should agree with it since it is part of his Executive order and memorandum, and this is the right vehicle to do it.


This a jobs issue again and a commonsense approach. No major regulation, whatever its source, should be imposed on American employers on State and local governments without a serious consideration of the costs, the benefits, and the availability of less burdensome alternatives. These amendments move us further to that goal.

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Mr. HELLER. Mr. President, I rise today to speak in favor of the two amendments filed by my good friend from Ohio, Senator Portman, my amendment No. 674, and above all the issue of the day, jobs.


Americans have had to endure great hardship over the past few years. This recession has robbed millions of people of their jobs, their homes, their businesses, and their sense of security. No State has been hit harder than the State of Nevada. My State has the unfortunate distinction of leading the Nation in unemployment, foreclosures, and bankruptcies. And there is no question that the status quo of dysfunctional government must end.


People from all over the country are struggling just to get by and are desperate for real solutions. The underlying legislation takes the wrong approach to job creation and can be very detrimental to economic growth in our country. Inciting a trade war with China will not create jobs.


In my home State of Nevada, a trade war would hurt tourism. It would stifle growth in renewable energy development and increase costs to consumers at a time when they can least afford it.


Working to sell American goods in foreign markets is what we should be fighting for. Instead, it seems job creation and economic growth have taken a back seat to political posturing and grandstanding in Washington. It is clear that the approach this administration and its supporters have taken for economic recovery has failed miserably. Out-of-control spending, a health care law no one can afford, and seemingly endless streams of regulation are crippling employers, stifling economic growth, and killing jobs. Instead of fighting for measures that create and protect jobs, this administration has created more government that continues to impede economic growth at every turn.


This government continues to tax too much, spend too much, and borrow too much. The American public and businesses alike are waiting on a plan that can plant the seeds of economic growth and bolster job creation. Instead, all they get from this government when it comes to job creation is a big wet blanket.


They need Washington to provide relief from new burdensome and overly intrusive regulations. Congress must help job creators by ensuring every regulation is vetted with a full understanding of the impact it will have on businesses across the country.


So I am pleased to join with Senator Portman in this fight to rein in excessive government regulation and to implement a market-benefit analysis for all agencies, both executive and independent, so the American public will know the true cost of these regulations. As President Obama said: We must rein in government agencies and force them to help businesses when they refuse to do so. I could not agree more.

There are a number of actions Congress can take immediately to help bolster our Nation's economy. The adoption of Senator Portman's amendments is one of those actions. I look forward to continuing to work with him on these issues. I believe our best days are still ahead, but we need to change course now. We need to roll back the regulations that are tying the hands of entrepreneurs across


America. We can help hasten an economic recovery by embracing progrowth policies that place more money in the pockets of Americans.


I would also like to highlight another issue that would help create jobs and provide certainty for the businesses across the country; that is, Congress should pass a budget. Congress has not passed a budget in nearly 2 1/2 years. Passing a comprehensive budget is one of the most basic responsibilities of Congress, but it has failed to accomplish this task.


America desperately needs a comprehensive 10-year plan that offers real solutions to the economic and fiscal problems in this country. We cannot lower unemployment rates in Nevada or restore the housing market without a holistic approach to reining in Federal spending and lowering the national debt.


Congress passed another continuing resolution that lacks a long-term approach to restoring our Nation to fiscal sanity. Instead, this bill funds the government for just a few more months. Congress cannot continue to function without a measure of accountability to hold Members of Congress to their constitutionally mandated responsibility, which is why I introduced the no budget, no pay amendment, amendment No. 674.


This measure requires Congress to pass a budget resolution by the beginning of any fiscal year. If Congress fails to pass a budget, then Members of Congress do not get paid. How can Congress commit to a debt reduction plan without a budget? Any serious proposal to rein in Federal spending and create jobs starts with a responsible budget.

At home in Nevada and across this country, if people do not accomplish the tasks their jobs require, they do not get paid. Somehow this very basic standard of responsibility is lost upon Washington.


The no budget, no pay amendment is not an end-all solution to our economic difficulties. It is, however, an important measure that Congress should adopt in order to show the American people that Members of Congress are serious about restoring our country to a period of economic prosperity.


Nevadans work hard for their paychecks. So should Congress. And since the majority believes the legislation before us today is a jobs bill, I encourage them to take up other measures that will help with job creation, such as opening our country to energy exploration, streamlining the permitting process for responsible development of our domestic resources, and taking the aggressive step of reforming our Tax Code. Let's make the Tax Code simpler for individuals and employers. Cut out the special interest loopholes while reducing the overall tax burden for all Americans.


Instead of looking for new ways to tax the American public, we should make our Tax Code more competitive and provide businesses the stability they need to grow and to create jobs. The continual threat of increased taxes feeds the uncertainty that serves as an impediment to economic growth. These are all things that both this administration and Congress could do immediately to boost economic recovery.


Let's give the American people a government that works for them. Removing impediments to job creation will get Americans working again and ensure our children and grandchildren have a brighter future.

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Mr. SCHUMER. Mr. President, I would like to talk on the bill that we are debating on the floor about China currency. Let me say a few things. To me and to many of my colleagues on both sides of the aisle, very little we could do could be more important in both the short term and the long term than to require China to pay a price if they continue to flaunt international trade rules and manipulate their currency, causing their imports to America--their exports to America, our imports, to be much cheaper than they should be, and causing American exports to China--their imports of our goods--to be more expensive than they should be.


In the short term, it has been estimated by EPI that 2 million jobs could be created over 2 years if we pass this legislation and China's currency were no longer misaligned. But there is a long-term issue, and that is this: The bottom line is, what is our future in this country? It is good, high-paying jobs. It is companies, large and small, that create high-end products, products that take a lot of know-how, products that take a lot of skill to create, products that basically are the high end in terms of both manufacturing and services. That is our future.


Those are our crown jewels. When I ask--as many of us have asked the question--how in a worldwide economy can America compete, the answer is those companies. I admit that most of those companies are not large; they are smaller companies. They are small business people with great ideas for new ways of providing a service or creating a product. They are the people who employ about 65 percent of the new jobs in America. They are our future. Some of them will grow into very large companies. Many will stay employing 100, 200, 300, or 400 people. But they are on the front lines of world trade.


What have we found over the last decade? In almost 10 years, since China joined the WTO, we have lost 2.8 million jobs, simply due to the Chinese Government's manipulation of currency. We have lost thousands more jobs elsewhere, because China steals our intellectual property. China has a mercantilist policy of taking an industry and nurturing it with local subsidies and making products so cheap that they export and overwhelm our market. That is what happened with solar cells, solar panels. They can take an advantage such as rare earths and oppose WTO rules and say to companies, if you want these rare earths, which you need for your products, you have to make it in China.


They do this over and over. Why do Senator Brown and Senator Graham and I and many others feel so strongly about this? Because we know if the present trend continues, as Robert Samuelson, the economist, noted in an op-ed in the Washington Post the other day, basically it is a disaster for America. If, when a young entrepreneur creates a product or service, that entrepreneur is overwhelmed by a Chinese product that has unfair advantage, we don't have a future. That is it. Many people worry about the budget deficit as the biggest problem America faces. It is a large problem and I hope we solve it. I will work hard to solve it. But, to me, the No. 1 problem America faces is how do we become the production giant we were over the last several decades but no longer seem to be. We are indeed a consumption giant. We consume more than anybody of our own products and other people's. But you cannot be a consumption giant for many years on end if you are not also a production giant.


What is a major external factor that contributes to making us a consumption giant rather than a production giant? It is the Chinese manipulation of currency, because it discourages production in America and encourages consumption of undervalued Chinese goods at the same time. The anguish that many of us feel about the future of this country translates directly into this legislation. I know there are lots of academics who sit up in their ivory towers, editorial writers, who love to look at this legislation and without even examining its consequences say that is protectionism. This is not protectionism. In fact, this legislation is in the name of free trade, because free trade implies a floating currency. That is what was set up at Bretton Woods. That was the equilibrium creator when things got out of whack. But it doesn't exist for China. A lot of countries have pegged their currency in the past and we paid no attention, because if you have .01 percent of GDP, and you are worried your tiny little currency will be overwhelmed, to peg it by world trends, that doesn't create much trouble. When you are the second largest economic power in the world, largest or second largest exporter in the world, to peg your currency totally discombobulates the world trading system.


Given the danger to the future of our country, and given the danger to the continuation of world trade by China continuing its currency manipulation, why isn't there more of an outcry? That is the question I ask myself. I don't have a good answer. Perhaps it is because those editorial writers and big thinkers don't talk to the manufacturers of high-end products in New York State I talk to, who see they cannot continue against China unfairly because of currency manipulation. Whether it is a ceramic that goes into powerplants, which I talked about yesterday, or even a high-end window that is used for major office buildings and museums, China uses its currency manipulation to gain unfair advantage over our companies up and down the line. Maybe those in the ivory towers don't talk to the manufacturers on the ground as so many of us do because that is our job and that is our living. Maybe it is because global companies have fought our provision in the interest of their shareholders.


I don't begrudge the big companies. Their job is to maximize their share price. If firing 10,000 American workers and moving them to China, and creating those 10,000 jobs in China gives them more profitability, in part because of currency manipulation, yes, that is what corporations are supposed to do. But that is not in America's interest. It may have been in General Electric--a company that has lots of New York presence and that I like very much--it may have been in their interest to sign a contract for wind turbines and give to China intellectual property in return. But it sure wasn't in the interest of the workers in Schenectad,even if it might have been in the overall interest of the GE shareholder. Maybe it is because the Business Roundtable and the Chamber of Commerce, which is dominated by the larger manufacturers and service companies and the larger financial institutions. They don't care about American wealth and jobs; they care about their own profitability and sales and share price, and if China has an unfair advantage, so be it. That is not their job. Maybe that is the reason. That is beginning to change, by the way.


When I last visited China, I met with the heads of the China divisions of many of our largest companies, and I had met with the same people several years before--and intermittently some of them in between--and their tone has totally changed. They are exasperated with China's mercantile policy. One of the manufacturers, who had been one of the leaders in saying don't touch China, because they exported a ton of goods there, had a different tone. He said: We can only export certain of our goods--the ones China doesn't make--and the rest we have to make in China and in certain provinces. That is a large, huge multibillion dollar U.S. company.

Another company, a major retailer, told us they cannot run their stores the way they wish in China because China dictates what they can and cannot have on their shelves. Half of the products on their shelves in American stores cannot, by Chinese Government dictate, be on the Chinese store shelves. Some of our large companies are sort of realizing that letting China get away with all of these violations of free trade, all these violations of WTO, no longer serves their interests, though, admittedly, they have not come around to support our bill.

Then there are those who are fearful that the Chinese will retaliate. That one drives me the craziest. I grew up in Brooklyn. When there were bullies and you didn't stand up for yourself, they bullied you and bullied you some more. If you stood up to them, yes, there was going to be some retaliation, but it was a lot better than giving in. That is what we have done with China. Will China retaliate if this bill becomes law and hundreds of American companies grow to have countervailing duties imposed? Yes. But the Chinese know they have far more to lose in a trade war than we do. Their economy is far more dependent upon exports--just look at the percentage in terms of GDP--than ours. They are far more dependent upon the American market than we are on the Chinese market, as important as it is to many of our companies.


While China will retaliate in a measured way, they will not create a trade war. It is not in their interest; they cannot afford to. I have news for those who are worried about a trade war: We are in one. When China manipulates its currency, steals intellectual property, and uses rare earths to lure businesses and takes our intellectual property and brings it to factories in China, subsidizes them against WTO rules, and then tries to export the product here, as they are doing with solar panels, that is a trade war, as millions of Americans who have lost their jobs realize. So we are in the war. We may as well arm ourselves so that we might win.


The bottom line is very simple: I hope this bill moves forward. I hope it goes through the House. A large vote in the Senate tomorrow will be a message to the House--Senator Brown's bill and, of course, his and ours have been combined. But Senator Brown's bill passed in the House a few years ago, and I hope the President rethinks things and signs it, because if he does, my prediction is that China, which never backs off when it is in their own economic interest, will, because it will no longer be in their economic interest because penalties will be imposed and equality will be imposed upon them once this bill is law. So they will let their currency float--maybe not as quickly as we want but far more quickly than it happens now, once this bill becomes law.


In my view, the arguments that have been raised against America taking action to deal with unfair Chinese currency manipulation are outdated, wrong, and ineffectual. I have been arguing the other side, our side, for 5 years. When Senator Graham and I first started talking about currency manipulation, imposing a tariff, both the Wall Street Journal and New York Times editorial boards--one very conservative and one very liberal--said China should be allowed to peg its currency. We have made progress in the strength of our intellectual arguments. We have to take that strength and translate it into action. Millions of American jobs, and ultimately trillions of American dollars of wealth, and nothing less than the future of our country are at stake.

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Mr. DeMINT. I rise to speak in opposition to the Chinese tariff bill being proposed by my colleague from New York. I understand the frustrations that motivated this legislation, and I share serious concerns over China's currency manipulation and trade practices. I have worked for years to ensure that trade happens and that free trade happens on a level playing field. We still have a long way to go.


The answer to these frustrations with China is not to start a trade war that will raise prices on many goods for American families at a time when they are already struggling, especially when this approach has already been tried and failed to gain any positive results for American workers. The absolute last thing our floundering economy needs right now is retaliatory tariffs on American products that will destroy more jobs. If we want to strengthen our currency, we should start by getting control of our own monetary policy. We don't need to start a trade war with China; we need to stop the class warfare that is preventing jobs from being created right here in America.


American workers are the best in the world, but they cannot fairly compete in a global economy when the U.S. Government is keeping one arm tied behind their back. The solution is to free American workers, not to try to tie up our competitors with more misguided policies that will hurt American families with higher prices on household goods. The U.S. Government needs to give American workers the freedom to work, and that freedom starts with the freedom to get a job.


If President Obama and the Democrats want to know who is preventing jobs from being created in America, all they have to do is look in the mirror. Let's be clear about a few things: Other countries are not threatening to massively raise taxes on our Nation's job creators and drive jobs overseas. President Obama is. Other countries did not jam through a health care takeover bill that is raising the cost of health care, making it harder for businesses to hire people and adding trillions of dollars to our national debt. The Democrats in Congress did. Other countries did not force us to pass the Dodd-Frank financial takeover with thousands of new regulations that are raising costs on American consumers and crippling businesses. Democrats in Congress did. Other countries are not writing hundreds of new regulatory rules that are destroying jobs in our Nation's energy sector and keeping us dependent on foreign oil. The administration's EPA is. Other countries are not blocking Boeing from creating thousands of American jobs in the State of South Carolina. The President's National Labor Relations Board is. Other countries are not forcing 28 U.S. States to require employees to join labor unions that make businesses less competitive. Democrats are the ones protecting labor bosses and hurting workers in America.


The Wall Street Journal has called this Chinese tariff bill ``the most dangerous trade legislation in many years,'' and for good reason. If we pass this bill, it is likely to spark a trade war. It is unlikely to create new jobs in America but will result in higher prices for U.S. consumers. Businesses will pay more for raw materials from China, which will increase prices on their goods and reduce employment. President Obama and the Democrats should know better after seeing the results of the tariff that was put on Chinese tires in 2009. In response, China retaliated with tariffs on American auto parts and poultry. This well-intended bill will have the same unintended results.

I understand the economic frustrations people have with China, but as so many of Obama's policies have done, this bill will only make things worse. This bill doesn't export the best of what American workers have to offer, it exports bad economics. Taxes and tariffs do not create jobs, competition and markets do. Freedom will work if we let it.


I urge the Senate to reject this bill and start helping American workers compete more freely here in America and around the world instead of simply trying to hold others back.

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Mr. BROWN of Ohio. I have just a couple comments with regard to those of the Senator from South Carolina. He was the ranking member on the Economic Policy Subcommittee on which also sat the Presiding Officer from Oregon in 2009 and 2010. We held a series of hearings on manufacturing policy, and there were some agreements between Senator DeMint and me on having a manufacturing strategy. We are the only major industrial country in the world without a real strategy on manufacturing. There are three ways to create wealth in this society: manufacturing, mining, and agriculture. Manufacturing has been a dominant force and a significant creator of the middle class, and I think we agree on that. We agree we want more of it in our country. Thirty years ago, more than 25 percent of our gross domestic product was manufacturing. Today that number is less than half that, and there are countries around the world--Germany, for instance, which has had a manufacturing strategy, and they have almost twice the GDP and twice the workforce.


So while Senator DeMint and I disagree on this China trade bill, I agree with the other Republican Senator from his State, Mr. Graham, who has been a significant leader. He and Senator Schumer have worked on this for, I believe, more than half a decade on responding to the cheating the Chinese Communist Party and the People's Republic of China have done in the world trade structure. I don't believe, in any way, we are starting a trade war. Almost any economist will tell us the Chinese have been committing a trade war for a decade. That is why our trade deficit is three times what it was 10 or 11 years ago. It is why so many manufacturing jobs in Senator Graham's and Senator DeMint's State of South Carolina, the Presiding Officer's State of Oregon, and my State of Ohio have been lost, not only because of China's currency, but that is clearly a significant contributing factor.


I go back to the illustration of gas stations, one across the street from the other, in Akron, OH. If one gas station could buy its gasoline with a 25-percent discount, it would soon put the other gas station out of business. That is really what has happened with China. China understands they have a 25-percent advantage given to them because they game the currency system. I know what that means. The Presiding Officer from North Carolina has seen what has happened to manufacturing in her State, a major manufacturing State. Our trade problems are not so much with companies in China, they are with the government. It really is our companies against the government. When they can game the system with a 25-percent bonus--when they sell into the United States, they get a 25-percent bonus, and when we try to sell into China, we get a 25-percent penalty on our companies' products--that hardly seems fair to me.


So as Senator Graham and Senator Schumer, the two leaders in this for many years, have said, they just want to level the playing field. They don't want us to have an advantage over China. Let's play fair and straight. Really, that is what the question is, and that is what this currency bill will finally do.

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Mr. MERKLEY. I found it very interesting, listening to some of the debate today, that there seems to be some policymakers in the Senate who haven't come to understand that when another nation pegs its currency, rather than letting it float, it does so deliberately to put in effect what is essentially a tariff against imports. In our case, that is a tariff against American imports, and in some cases it provides a subsidy to exports.


Now, here we are in America. Why would we say it is OK for China to peg its currency in a fashion that puts a tariff against American products and subsidizes Chinese exports to America? Because that is guaranteed to strip jobs out of America. Why would some Members of this Chamber consider that to be just fine? I am puzzled by that, and I am wondering if the Senator could help me understand.

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Mr. BROWN of Ohio. I appreciate that. I was listening to one of the previous speakers who opposed this bill and characterized the bill as a China tariff bill. The Senator said it exactly right. When we sell to China, it is as if they put a tariff on our products. When we buy from them, we give them a 25-percent bonus--excuse me--when we try to sell to them, they ban that import. When we buy from them, they have a 25-percent bonus. It is putting us at such a disadvantage, as the Senator said.

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Mr. MERKLEY. In Oregon, we recently had the shutdown of a company called Blue Heron. It has operated for the better part of a century, making paper. The point Blue Heron was making was that because of the pegging of the currency, the paper they tried to sell to China faced a 25-percent tariff, while China's paper enjoyed a 25-percent subsidy if it was sold in the United States, and it created an absolutely unfair international trade playing field that was going to be putting American papermakers out of business. No matter how efficient they could possibly be, China, with this subsidy, could sell into the U.S. market, undercutting American products. Well, that plant shut down. It is one of a series of paper plants that have shut down. I think the Senator has some similar situations in Ohio.

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Mr. BROWN of Ohio. We do. The Senator from Oregon and I have talked about this, that there is a gentleman who worked for a paper company who illustrated to me what China has done. It was a specific kind of paper, a glossy, coated paper for magazines. The Chinese bought their wood pulp in Brazil, they shipped it to China, milled it there, and sold it back to the United States, and they undercut Blue Heron and Ohio paper companies because they had that 25-percent subsidy.


There is no way, when labor costs are only about--labor is only about 10 percent of the cost of paper production--there is no way they could possibly buy something as heavy and voluminous as wood pulp, ship it across the ocean, mill it, ship it back in the form of paper, and not--the only way they can undercut prices is by huge subsidies. There may have been other subsidies to it. It may have been water and energy and capital and land, but it surely was that 25-percent subsidy these companies have when they undercut our manufacturers.


I just know that in 15 years, I say to the Senator, or 10 years, we will look back on the history of our country and say: Why did we let one country undercut our manufacturing base so substantially and lose all those jobs and lose all that technology? When the products are invented in this country, the production is done offshore, and so much of the innovation that is done on the shop floor ends up in that country rather than here, it makes it harder for us, when we lose that innovative edge, to catch up.

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Mr. MERKLEY. I think it is important to understand as well that the pegged currency isn't the only tool China is using to create an unlevel playing field against American products. Another is that they use something economists call financial repression. That is a fancy word for artificially lowering the interest rates on savings on a level below inflation. So if you are a Chinese citizen and you are saving money and the inflation rate is 5 percent, the interest rate you are going to get is going to be less than 5 percent. It is a way, essentially, of taxing the entire nation, and then the Chinese Government takes those funds and they give massive subsidies to manufacturing in China. Those subsidies include grants, and they include below-market loans.


So on top of the huge tariff on American products which basically stems from this currency manipulation, we have these huge subsidies to domestic manufacturers who export to the United States. China is supposed to disclose those subsidies under WTO, but it may come as a surprise to some in this Chamber that China doesn't do it. They only did it one year, in 2006. So they are taking the structure that was set up and they are abusing it. This adds to, on top of the currency manipulation, further driving jobs out of the United States, discriminating against U.S. products.


Isn't there a time when we as policymakers need to stand for American workers, stand for the American middle class, and say we are not going to allow another nation in a major trading relationship to break the rules in order to discriminate against the very products that put American workers out of work?

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Mr. BROWN of Ohio. As a result of the work Senator Schumer did early on this bill, with the cosponsorship of the Senator from North Carolina who is presiding, this bill really is the first major bipartisan jobs--major, biggest jobs bill we have brought in front of this Chamber, and this is a chance to finally begin to look toward ways of reindustrializing our country and building manufacturing that matters in places such as Buffalo and Charlotte and Portland and Toledo.


This bill is a real opportunity. I think that is why we got 79 votes on the first go-round on Monday night. I think it is why we have so many Republican sponsors of this bill. It is a result of the work Senator Schumer and Senator Graham have been doing for years to begin to build that foundation, and that is why the passage of this bill is so important.

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Mr. MERKLEY. I wish to thank the Senator from Ohio, Mr. Brown, for his work, along with the work my colleague from New York, Senator Schumer, has done. It is time we stand for workers across our Nation who have been systematically losing the good-paying manufacturing jobs because China has been pegging its currency and discriminating against American products to subsidize the export of their own. This must be discussed in every corner of our Nation and must be discussed here on the floor of this Chamber because it is affecting the success of American families in Oregon, in Ohio, in New York, in North Carolina, and throughout our Nation.

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Mr. BARRASSO. Madam President, if Washington is going to force new regulations on the job creators of this country, I think America needs to know the cost of those regulations. That is why I rise today to discuss an important amendment, an amendment I am offering to the underlying China currency bill. It is Barrasso amendment No. 671. This amendment, which is a bipartisan amendment--it is cosponsored by Senator Manchin and Senator Blunt--will force the U.S. Government to look before it leaps when it comes to issuing job-crushing regulations.


Simply put, the administration would be required to do a comprehensive and transparent jobs-impact analysis--a jobs-impact analysis--before issuing any job-crushing regulations.


Job creation in this country has almost come to a halt. The Labor Department reported that zero jobs were created in August. The economic recovery that was promised by the administration failed to materialize. Unemployment remains at 9.1 percent. Meanwhile, the unemployment rate in China is 4.1 percent. Our economy is stagnant. China's economy is growing. It has been this way since President Obama took office.


The President blames the American people by saying the country has grown soft. In September, he stated in a TV interview in Florida:


The way I think about it is, you know, this is a great, great country that has gotten a little soft and, you know, we didn't have that same competitive edge that we needed over the last couple of decades. We need to get back on track.


Yet, despite the repeated assurances of improvement, President Obama's own economic policies have failed. The only people who have gained from these policies live in countries overseas. We see it in China. These are people who are benefiting from American companies moving operations outside the United States. Why? Well, it is to escape Washington's redtape.

The President's stimulus plan failed to produce the 3.5 million jobs the President had promised. His so-called green jobs initiative gave us more red ink but never came close to the 5 million new jobs he predicted.


All the while, the Washington bureaucracy that he controls has continued to churn out extensive as well as expansive new regulations that amount to an assault on domestic private sector job creation. The facts are inescapable. Since President Obama took office, America has lost approximately 2.3 million jobs. We have been in an economic crisis, a crisis that extends to America's confidence in the President, confidence in this President to do anything that will change the current course.


What the American people want is leadership, and they have rejected the President's insistence that the only way forward is through more spending and more Washington redtape on those in this country who create jobs.


In September, the President addressed a joint session of Congress. He actually said he wanted to eliminate regulations, regulations he said put an unnecessary burden on businesses at a time, he said, they can least afford it. Well, we heard this same message from the White House time and time again. The rhetoric coming out of this White House simply has not matched the reality.


In fact, Washington continues to roll out redtape each and every day. The redtape makes it harder and more expensive for the private sector to create jobs while making it easier to create jobs in foreign countries such as China. The President said his administration has identified over 500 reforms to our regulatory system, he said, that would save billions of dollars the next few years.


Well, I appreciate that the White House may have identified wasteful regulations, but it will not help our economy unless the White House repeals those wasteful regulations. The President's jobs plan does nothing to fix the regulatory burdens faced by America's job creators. His jobs plan actually adds to the burden on job creators in this country.


The President has tried to justify this increasing avalanche of redtape. He said he does not want to choose between jobs and safety. Well, in today's regulatory climate, the choice is a false one. Washington's wasteful regulations are not keeping Americans safe from dangerous jobs. The American people cannot find jobs because no one is safe from the regulations coming out of Washington.


For every step our economy tries to take forward, Washington regulations continue to stand in the way. The expansion of the Federal bureaucracy is suffocating the private sector economy. Federal agency funding has increased 16 percent over the past 3 years, while our economy has only grown 5 percent over the same 3 years.


The regulatory burden is literally growing three times faster than our own economy. This massive increase in Washington's power has only made the U.S. economy worse and China's better. Americans know regulating our economy makes it harder and more expensive for the private sector to create jobs. The combined cost of new regulations being proposed by the Obama administration in July and August alone was $17.7 billion. Much of this cost was borne by Americans working in red, white, and blue jobs.


Those who try to justify these policies claim they will help us create green jobs at some unknown time in the future. Our economy, our job market, is not a seesaw. Pushing one part down does not make the other side pop up. This administration's out-of-control regulations scheme is dragging down large portions of our economy.


Now the President has promised to stop this kind of overreach. President Obama issued an Executive order at the start of this year. Way back in the beginning of 2011 he said he wanted to do that, to slow down Washington's regulations.


Let's see how effective the President has been with his Executive order. Well, it has failed. In the month the President issued his Executive order, way back in the beginning of 2011, all of those months ago, hundreds of new rules and regulations have been either enacted or proposed. For every day that goes by, America's job creators face at least one new Washington rule to follow.


When the President announced his Executive order, he said he wanted to promote predictability and reduce uncertainty. These are very laudable goals, but a new rule every day does nothing to promote predictability and is the very definition of uncertainty. The main source of uncertainty in the economy right now is Washington regulations.


To make things worse, the people most victimized by this uncertainty are the very people the President claims he wants to help. The President said last year that when it comes to job creation, he wants to ``start where most new jobs do, with small businesses.''


Well, the sentiment is right, but, again, what has he done about it? According to the U.S. Chamber of Commerce, businesses with fewer than 20 employees, well, those businesses incur regulatory costs that are 42 percent higher than larger businesses which have up to 500 employees. These figures do not include the avalanche of new regulations coming down the road.


Since January 1 of this year, over 50,000 pages of regulations have been added to the Federal Register. The U.S. Chamber of Commerce has said the President's new health care law alone will produce 30,000 pages of new health care regulations. At whom are many of those aimed? Well, it is these same small employers the President claims to want to help.


The President said he will keep trying every new idea that works, and he will listen to every good proposal no matter which party, he said, comes up with it. Well, I have a pretty simple idea. If the President wants to know which proposals will work to create jobs, maybe he should require his regulatory agencies to tell him how their own actions will affect the job market.


The amendment I am offering is going to do just that. It is a bipartisan amendment. It is based on a bill that I have introduced called the Employment Impact Act. This amendment will force every regulatory agency to prepare what is called a jobs impact statement--a jobs impact statement--for every new rule proposed.

The impact statement must include a detailed assessment of the jobs that would be lost or even gained or sent overseas upon enactment of a rule coming out of Washington. Agencies would be required to consider whether new rules would have a bad impact on our job market in general. This job impact statement would also require an analysis of any alternative plans that might actually be better for our economy.


The amendment requires regulatory agencies to examine and report on how new rules might interact with other proposals that are also coming down the road. The problem


with Washington regulations is not only that they are too sweeping, but there are also too many. It makes no sense to look at any one individual rule or regulation in a vacuum and then enacting hundreds of them without identifying and understanding their cumulative impact and effect.


The cumulative effect of those regulations is going to spell death by a thousand cuts for hard-working Americans who are trying to work, trying to support their families. In keeping with the principles of transparency that President Obama regularly proclaims is a priority for him, this bill, this amendment, will require every jobs impact statement prepared by a Federal agency to be made available to the public. The American people deserve to know--have a right to know--what their government is actually doing.


Federal agencies in Washington need to learn to think, to think about the American people before they act. Requiring statements from these agencies on what their regulations will do is nothing new. For 40 years the Federal Government has required an analysis of how Federal regulations will impact America's environment. They have to file what are called environmental impact statements. What I am asking for is simply a jobs impact statement.


Past generations of legislators rightly recognized the importance of America's land, air, and water. It is equally important that we recognize the importance of America's working families as well. America's greatest natural resource is the American people. We are talking about people who want to work, who are willing to work, who are looking for work, and yet cannot find a job.


This amendment, the Barrasso amendment, will force Washington bureaucrats to realize Americans are much more interested in growing our Nation's economy than they are in growing China's economy.


I urge a vote and adoption of this amendment.

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