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…
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.
I suggest the absence of a quorum.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
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.
Mr. President, I yield the floor, and I suggest the absence of a quorum.
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.
I ask for support for S. 1619.
I yield the floor and suggest the absence of a quorum.
I ask that the order for the quorum call be rescinded.
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.
Love to.
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.
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.
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.
Mr. President, I said to Senator Inhofe I will be no more than 10 minutes and I appreciate his courtesy and his being here.
I rise in opposition to the Hatch amendment. I respect and appreciate my colleague from Utah and his proposal to negotiate a solution with China and other nations on currency. I have worked with him on the Health, Education, Labor, and Pensions Committee, as the Presiding Officer has, and I appreciate his concern on all these issues and his wide range of knowledge. My firm belief, however, is his amendment is not going to work. I know he generally does not want to take the same direction we do in standing up to the Chinese. I think, when we talk about multilateral negotiation, we are pretty much saying to the Chinese: Please stop the strategy, however unfair and in violation of international norms, that has helped your country accumulate enormous wealth. Please stop. We hope you will stop. Please stop, or we are saying please stop what Fred Bergsten says is the ``most protectionist policy any major country has taken since World War II.''
We have tried this. We now have the ability to do multilateral negotiations. Senator Hatch is right. The administration has not particularly led on that.
He is also right to add that the Bush administration also did not particularly lead on that. Before that, the Clinton administration did not particularly lead on that.
We have the ability, without amendment No. 680--because it would add nothing significant to the procedures and the steps that are already in place as a matter of current law and practice--to do these negotiations. We have an administration, a Treasury Department that may change political parties
from time to time but doesn't change strategies in dealing with the Chinese. It is always: Please stop. We hope you will do something differently. We would like it if you would change what you are doing. We think it would be better if you are not cheating on currency and cheating on international trade policies. We would like, now that we let you into the World Trade Organization, that you actually follow the rules of the WTO. We think it would be great if you follow the force of law and the rule of law.
Saying those things has gotten us nowhere. That is why, while I respect Senator Hatch, amendment No. 680 doesn't get us anywhere. It doesn't change the law. It just delays. We know how the Chinese like it when we delay because every day we delay is one more day where the Chinese cheat, where the Chinese have an advantage, where the Chinese, the People's Republic of China, the Communist Party, can again take advantage of American workers and American companies.
The Treasury Department already has specific reporting obligations. They already have ample authority to consult and engage bilaterally, multilaterally, and plurilaterally under the Exchange Rates and Economic Policy Coordination Act of 1988, which amendment No. 680 would repeal.
I appreciate what Senator Hatch wants to do, but the fact is, we have to make the Chinese understand, other than occasional pleading, occasional begging, the occasional polite requests--we have to make them understand, if they do not stop manipulating their currency, if they don't stop intervening to keep a weaker renminbi, the United States will defend itself. The United States cannot turn the other cheek on this one.
The Presiding Officer said the other day the Chinese steal our lunch, and if we take any of it back, they get all upset at us, although the Presiding Officer said it better than I just said it. But the fact is, the Chinese have not played fairly. I used the example on the Senate floor of what currency manipulation means in very simple terms. If there is a gas station on Summit Street in Akron and there is a gas station across the street--there are two Marathon stations--one of the Marathon stations gets its oil from Findlay, OH, at a 30-percent discount and the other station doesn't, the Marathon station that gets a discount is going to put the other one out of business, pure and simple.
As Senator Merkley said the other day, there is a tariff on goods we sell to China, and there is a subsidy on goods China sells to us. How do we compete with that? Amendment No. 680 will not help us compete with that, it will just delay and delay. That does not make sense. That is why this legislation, S. 1619, without the Hatch amendment, makes much more sense. It allows us to move finally and quickly. It allows us to move with certainty. It allows us to move straightforwardly. It strips away all the delay and the head fakes and the feinting and all the other things the Chinese Party Government is so good at doing.
I ask for defeat of the amendment and passage of S. 1619, and I yield the floor.
Mr. President, I very much thank Senator Harkin, the chairman of the HELP Committee, for his advocacy always for the middle class, advocacy always for those who aspire to the middle class, and especially the jobs bill. I particularly appreciate his comments about school construction. That is a major component of the jobs bill.
My State has gone through a pretty good period under Governor Taft, who is not in the same political party as I am but he is a friend of mine who launched a program 10 years or so ago in Ohio to begin to replace--to give incentives to local governments, local school districts, to vote bond issues where there was a lot of State matching funds that built a lot of new schools but nothing close to what we need yet with all of the progress we made.
We tell our children that education is the most important thing in their lives and our lives and our country, and then we send them to lousy, decaying, falling-apart school buildings. I do not think that quite clicks in kids' minds. So the school construction part of this bill, first of all, puts construction workers to work in their high- unemployment rates, as Senator Harkin said. Second, it puts steelworkers and cement workers and concrete workers and people who are making the products--the glass makers, the glass companies, and all manufacturers--to work for the materials. Third, it sets the foundation by building community colleges and rebuilding school buildings and all of that, putting people to work for long-term economic growth and prosperity.
We know for a fact the United States, in the 1950s, 1960s, and 1970s, created an infrastructure the likes of which the world had never seen. That is the foundation for our prosperity. Unfortunately, in the last 20 years we have let that infrastructure crumble. We let that infrastructure decay. When I look at these young pages here, 15, 16, 17, 18 years old, I do not want them to inherit a huge budget deficit, but I also do not want them to inherit a huge education deficit, an infrastructure deficit. We owe that to that generation to do much better than we have.
I thank Senator Harkin and yield to him.
We are joined in the Chamber by two of the sponsors of this bill: the Presiding Officer, Senator Whitehouse, and Senator Casey from Pennsylvania.
The Senator said something earlier about the supercommittee and deficit reduction, and what he said is exactly right. Many in this institution and down the hall in the House of Representatives do not seem to understand that we cannot only cut our way to prosperity, we have to grow our way to a more balanced budget and prosperity.
One of the things this China currency bill will do is, it is estimated by the Economic Policy Institute that over 10 years it will cut the deficit $600 billion to $800 billion. Why is that? Because of job growth, because this bill provides--according to the Economic Policy Institute study, it creates more than 2 million jobs. That is 2 million people, instead of receiving unemployment benefits, instead of being eligible for food stamps, instead of other kinds of things we do for people who are out of work, it will mean those 2 million people will actually be working, many of them in manufacturing. Those are $12-, $15-, $20-an-hour jobs. They will be paying taxes. They will be paying into Social Security, into Medicare, into local retirement systems--all of that--paying property taxes for the schools, doing all of the things that employed, hard-working taxpayers do.
So it is a win in that situation too. So while we need to focus on the President's jobs bill, this is one that makes so much sense, and that is why we need to move forward.
I yield the floor and I suggest the absence of a quorum.