Finance, Banking panels’ fight clouds China currency picture

A jurisdictional fight between the Finance and Banking committees is complicating Senate action on a China currency bill.

Both committees unveiled bills in mid-June designed to force the Department of Treasury to tackle China’s currency, which critics charge is artificially low, making it easier for China to export products to the U.S. at the expense of U.S. manufacturing.

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The topic is a hot one in Congress, as four presidential candidates have signed on to China currency bills. House Speaker Nancy Pelosi (D-Calif.) has said the House will move forward with a bill soon.

But Senate Democratic leaders have told the Finance and Banking committees they first must resolve their jurisdictional fight since only one bill can come to the floor.

Staff for the two committees have yet to meet on a deal, and a Senate aide said Finance has been focused on building support for its bill, which was announced on June 13. At the same time, Senate aides on both sides of the issue described the dispute as a “hiccup,” and predicted a deal would be reached among members.

Finance Chairman Max BaucusMax BaucusChanging of the guard at DC’s top lobby firm GOP hasn’t reached out to centrist Dem senators Five reasons why Tillerson is likely to get through MORE introduced the Finance bill on June 13 along with ranking member Chuck GrassleyChuck GrassleyComey to testify before Senate Judiciary Committee GOP to kill language exempting staff from new ObamaCare repeal bill House cyber chairman wants to bolster workforce MORE (R-Iowa) and Sens. Charles SchumerCharles SchumerAngus King: Schumer is in a 'difficult place' Schumer: NYC should refuse to pay for Trump’s security Reagan's 'voodoo economics' are precisely what America needs MORE (D-N.Y.) and Lindsey GrahamLindsey GrahamTop admiral: North Korea crisis is 'worst I've seen' Comey to testify before Senate Judiciary Committee Overnight Defense: US moving missile defense system to South Korea | Dems want justification for Syria strike | Army pick pushes back against critics of LGBT record MORE (R-S.C.), who have been pushing the China issue since last year. Democratic presidential candidates Sens. Hillary Rodham Clinton (N.Y.) and Barack ObamaBarack ObamaComedian Hasan Minhaj blasts Trump, media at correspondents' dinner Trump invites Philippine's Duterte to the White House Social media users rip Fox graphic on economy under Trump, Obama MORE (Ill.) are also cosponsors.

The Finance bill would allow anti-dumping duties to be imposed on imports from a country found to have a misaligned currency, which is a trade remedy law issue clearly under Finance’s jurisdiction.

It also would replace the current legal framework that requires Treasury to label countries “currency manipulators” before taking action, with new rules requiring Treasury to identify “fundamentally misaligned” currencies to Congress twice a year. These reports clearly fall under the Banking Committee’s jurisdiction, Senate aides said.

Baucus this week said he was neither surprised nor frustrated that Banking had put out its own China currency bill. “We’re both basically on the same page,” he said. Grassley also told The Hill he thought Banking had put out a bill to protect its jurisdiction and that he would have done the same thing.

Other sources, however, said Banking’s bill came as a surprise to Finance staff and business groups on both sides of the China fight. “I knew nothing about it,” said one Senate aide, who described majority staff on Finance as being frustrated with Banking.

Several private-sector sources also said majority staffers on Finance were furious when Banking announced its legislation — one day before Finance announced its bill at a press conference. While both committees said they were timing their announcements to the release of a Treasury report, which again did not find China was manipulating its currency, several observers said it seemed clear Banking was not keeping Finance in the loop on its activities on China currency.

Finance’s frustration was magnified, these sources said, because Finance had been actively briefing Banking on its own China currency work.

The Banking Committee sees itself as having been involved in the currency debate all year. Two Senate aides noted that Treasury Secretary Henry Paulson’s first hearing of the year was on currency at the Banking Committee.

Banking also sent Paulson a letter in May indicating its involvement in the issue. In addition, the panel argues that much of the Finance bill falls under Banking’s jurisdiction, and that as a result Finance had more of a reason to keep Banking informed.

At the same time, some business sources pressing for action on China were caught off guard by its bill. For example, one business lobbyist who met with Banking staff weeks before it announced its bill said there was no indication legislation was forthcoming.

Besides Banking Chairman Chris Dodd (D-Conn.), another presidential hopeful, the bill has seven other sponsors including Sens. Evan Bayh (D-Ind.), Debbie StabenowDebbie StabenowUSDA to ease school meal standards Medicare’s coverage decisions need more input from physicians Members help package meals at Kraft Heinz charity event in DC MORE (D-Mich.), Elizabeth Dole (R-N.C.) and Richard Shelby (R-Ala.), Banking’s ranking member.

The Banking bill would make it easier for Treasury to define China as a currency manipulator, but would not allow anti-dumping duties on Chinese imports to be raised as a result.

Bayh and Stabenow are also cosponsoring another China bill that would define currency manipulation as a kind of subsidy that could allow for higher duties on imports. Their sponsorship of the Dodd bill has led some to see Dodd as sympathetic to their cause.

The fight muddles an already complex picture on China currency, making it difficult for lobbyists to strategize on what bills to fight and what bills to support. Rep. Sandy Levin (D-Mich.), who is chairman of the House Ways and Means Trade subcommittee, is expected to offer a China bill in the next few weeks that business lobbyists expect will borrow from some of the House and Senate bills already introduced.