House Republicans block remedy for China’s job-killing currency intervention

One year ago, on Oct. 11, 2011, the Senate passed Sherrod Brown’s  Currency Exchange Rate Oversight Reform Act of 2011. This legislation aimed to put an end to the exchange rate intervention practiced by China and other countries, which kills jobs in the United States by artificially lowering the cost of the intervening countries’ exports while making goods produced in the U.S. artificially expensive. The Senate passed the bill 63-35, on a rare bipartisan vote.

The next day, the bill was sent to the Republican-controlled House of Representatives, where it has been blocked ever since. This gridlock is especially unfortunate because a year earlier, in Sept. 2010, the House passed a somewhat tougher bill, the Currency Reform for Fair Trade Act, by an overwhelming vote of 348–79, with a majority of Republicans joining their Democratic colleagues in support.

China continues to peg its currency to the dollar at an artificially low rate, and good-paying manufacturing jobs in the U.S. continue to be lost as a result. At an event hosted by EPI, two economists who have long favored free trade, Fred Bergsten and Paul Krugman, agreed that ending China’s “staggering and unprecedented” currency intervention could create up to a million jobs in the U.S., a result that would also improve the U.S. budget deficit and add as much as $200 billion to U.S. GDP.

So why hasn’t Congress acted? What happened to change the outcome in the House from one year to the next? Most obviously, control switched from the Democrats to the Republicans in the 2010 elections, and the new Speaker of the House, John Boehner, and the new majority leader, Eric Cantor, both opposed the bill in 2010.

Penalizing imports from China that have benefited from illegal currency intervention is very popular, with public support more than 70 percent in most polls. But the U.S. Chamber of Commerce and other business groups representing the multinational corporations that benefit from China trade are dead-set against the currency bill. From their point of view, policies like China’s currency intervention that put pressure on U.S. workers to accept pay cuts and other concessions to save their jobs are just fine. Corporate lobbying and campaign contributions almost guarantee that Congress will remain deadlocked on this issue.

  • tunaman13212

    people need to pay attention to this it is the rep. agenda let corparations roll over the working people we need to keep Obama in office he cares about working people and is getting us out of the mess repub’s put us in.

  • Michael Drescher

    Good article showing once again how the GOP are trying to undermine our economy for short term political gain, That used to be called treason, now it’s called politics.

  • You conveniently omit the fact that Boehner stated publicly that IF Barack Obama would promise to SIGN the bill he would allow it to come to a vote on the House Floor (where there were Republicans not only willing to join the Democrats to pass the bil, but actual cosponsors of the billl.) Obama never responded to Boehner’s challenge. and is equally guilty of failure to act so putting it ALL on the Republicans and giving Obama a free ride is blatantly biased and unfair..