Senate moves to final vote on China currency bill

The Senate voted to end debate Thursday on legislation targeting China's currency, ensuring an up-or-down vote on the measure. 

In a 62-38 vote, several Republicans including Sen. Lindsey Graham (R-S.C.) joined Democrats in agreeing to move forward with the measure, which is designed to pressure China to raise the value of its currency. Proponents argue China keeps the value of its currency low to secure a trade advantage over the U.S.

The vote signals the legislation has the support to clear the Senate, but it is uncertain whether it will be taken up by the House, where Speaker John Boehner (R-Ohio) has criticized the measure. 

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Although the House already passed a similar piece of legislation last year in an overwhelming 348-79 vote, Boehner this week said it would be dangerous to move the bill.

An earlier procedural vote to open debate on the bill drew more Republican support, prevailing 79-19. Some Republicans voted 'no' on Thursday at the urging of Senate Minority Leader Mitch McConnell (R-Ky.), who had criticized Senate Democrats for limiting amendments to the China bill. 

Speaking in favor of the bill Thursday morning before the vote, Senate Majority Leader Harry Reid (D-Nev.) called China’s currency tactics “underhanded.” Sen. Charles Schumer (N.Y.), the No. 3 Democrat in the chamber, suggested that if Chinese officials see the legislation moving through the Capitol they might decide to reform themselves.

“When China sees the train headed down the tracks and that for the first time their attempts to stall … this bill won’t succeed they will adjust and correct themselves, not just on currency but on all the other areas where they don’t treat us fairly,” said Schumer.

Republican opponents said passing the legislation could ignite a dangerous “trade war” with China, the second largest trading partner with the U.S.

Others, like Sens. John McCain (R-Ariz.) and Mark Kirk (R-Ill.), said the bill was simply a waste of the Senate’s time.

“I worry we are diverting the Senate’s time from the big game which is the joint committee and its work on reducing the deficit,” Kirk said Wednesday, referring to a new supercommittee of 12 lawmakers trying to reach a deal to reduce the deficit.

If the underlying bill, S. 1619, is signed into law, it would create a system under which the Treasury Department would have to determine whether any foreign currencies are in fundamental misalignment. If it did, the department would be required to start negotiations. Countries that fail to fix their currencies after those talks could be hit with higher tariffs.

That’s a change from current law, which requires Treasury to cite countries that are intentionally manipulating their currencies. Treasury has cited countries in years past, but not for about a decade; the department has argued it cannot easily determine whether countries are manipulating their currency for the purpose of gaining a trade advantage, as the law requires.

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