Currency Exchange Rate Oversight Reform Act of 2011

Floor Speech

By:  Lindsey Graham
Date: Oct. 6, 2011
Location: Washington, DC

BREAK TRANSCRIPT

I rise in support of moving forward on this legislation. I wish I could fix the Senate. It is not functioning the way any of us wishes--plenty of blame to go around. The Congress's approval rating is at 15 percent.

But here is some good news. There is a piece of legislation before us that, if we can ever get a vote on the legislation, would have overwhelming bipartisan support that actually would matter to the average, every-day person. When you look through your Congress, you have got to say: What is it about those folks up there? Why can't they do the things that all of us know need to be done?

There is a difference of opinion about how to deal with China. This is a complicated issue. But the one thing no one is telling me on the other side: Lindsey, they are not manipulating their currency. I think as the American Taxpayers Union--great organization; I am in pretty good standing with them. I disagree with them on how to proceed against China in this particular instance. I think they said in their own letter: We agree, China manipulates their currency.

Well, if they do manipulate their currency, what does it matter? It matters a lot if you are an American business man or woman trying to compete in the world marketplace. As Senator Schumer said, the Chinese manipulate the value of their currency--6.3 yuan to the dollar; it used to be 8-point something. What does that mean? That means if a product produced in China is sold in the world marketplace and you are in business in South Carolina, Alabama, or New York, competing with that Chinese company, the value of their money builds a discount of 30 to 40 percent. You are going to have a very hard time winning in the marketplace, not because you do not work hard, not because your employees are inferior, simply because the Chinese Government is doing things with their currency we do not do.

We have a Federal Reserve. Some of their policies I do not agree with. But to suggest that our Federal Reserve system manipulates our currency to create a trade advantage is ridiculous. If we are doing it for that purpose, everybody should be fired, because we have a $273 billion trade deficit.

Every country has a right to set monetary policy. That is not the issue. If you disagree with the way we are doing monetary policy in the United States, I think you have a valid claim. This is about a country manipulating its currency for an advantage in the export market. The Chinese manipulation of the yuan has cost this country at least 2 million jobs--41,000 in South Carolina--and it is an unfair trade practice in another name.

If this were an island nation somewhere, none of us would care. But this is the second or third largest economy in the world, and all of us should care. The people who are opposing this legislation today are probably doing business in China and they are afraid to offend the Chinese. I have some manufacturing in my State that has a big footprint in China. They are nervous about this bill. I have most people in my State dying for me to get them some relief so they can stay in business.

But here is a warning: It will come--this movie will come to a neighborhood near you soon. In 2016, the Chinese are going to start producing, in large numbers, commercial aircraft. It will be difficult for American aircraft companies to compete with China if the aircraft is 30 percent discounted because of currency manipulation. One day they will be producing cars, not to be

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sold in China but throughout the world. If you are in a high-tech industry, what has happened to the textile industry and other elements of our country such as steel is coming toward you. All we ask of China is build cars, build airplanes, but sell their products based on trade practices that are accepted throughout the world. Do not manipulate your currency to create a discount on products made in your country at our expense.

Since 2004, I have been dealing with this. We started with a sense of the Senate because everybody said this is delicate. I buy into that to a point. So sense of the Senate, we all agreed with 100 votes: You manipulate your currency. Please stop.

In 2005, after they did not stop, we introduced legislation, got 67 votes to proceed forward with a 27.5 tariff. We stopped our bill because we hoped things would change. Guess what. The yuan has appreciated about 31 percent since we have been doing this exercise, but not nearly enough. There is a restriction on the yuan trading. It cannot float more than 0.5 percent a day. It is tied to the dollar. It is still crushing our manufacturing community unfairly.

So from 2004 to now, I have been reasonable. I have sent message amendments, I have taken votes where I won overwhelmingly, and backed off. I have had it. Enough is enough. I am sorry the amendment process around this place is so screwed up. It is. There was an effort to get some amendments up. Not as much as people on our side would like.

I hate the idea of filling up the tree and becoming the House. But this is not about Senate procedure for me. I try to be a team player where I can be because I do believe Senator McConnell is doing a very good job. Senator Reid has got his own agenda. It is not about Harry Reid. It is not about Mitch McConnell. It is not about some rule of the Senate. It is about people in my State who are going to lose their job if we do not do something.

I know what I need to be doing as a Senator here. The institution I need to be protecting is the American workforce which is having its clock cleaned by a Communist dictatorship that cheats. They do not outwork us. They do not outperform us. They steal our intellectual property. They manipulate their currency. They subsidize their industries. A few years ago they dumped steel all over the world--in the American marketplace, in particular--produced in China below cost, and the Bush administration pushed back with a countervailing duty claim.

I want to do business with China. The Chinese people are good. Their government is bad. They are mercantilists. They look at every transaction with an eye of what is best for us in the short term. They do not play by the rules. Since they have been in the WTO, their trade deficit has almost quadrupled. So enough is enough for Lindsey Graham.

We are going to have a chance, after 7 years, of getting a vote that will matter to the American people. I am sorry we are mad at each other all the time about everything. I am tired of being mad about the Senate not working well. I

am going to set aside my displeasure for the process and do something I think will help the people I represent. I am going to vote to move forward in an imperfect procedural environment, knowing that if we can ever get a vote, it will be the best thing that could happen to the American manufacturing community. It will be a shot across China's bow that is long overdue.

The last thing I would say is that Senator Sessions has come into this issue, and he has brought an intellectual weight to it, emotional commitment. He understands the middle class. Jeff Sessions has been the best partner anyone could hope to have to try to push a bill forward that will give America a fighting chance in a world economy dominated unfairly by a Communist dictatorship. I want to recognize what Senator Sessions has done. He is going to vote to move forward. We have had it with China. Let's do something that will matter.

I yield the floor.