74 GOP members defect as China bill passes the House

In a vote that divided House Republicans, the chamber on Wednesday
overwhelmingly approved legislation meant to hammer China for its
currency policy.

The legislation, meant to pressure China into boosting the value of its currency, passed in a 348-79 vote.

{mosads}Ninety-nine Republicans voted for the measure while 74 opposed it, and the vote split GOP leaders from Rep. Dave Camp (Mich.), who could become chairman of the Ways and Means Committee if the GOP takes back the House this fall.

Minority Leader John Boehner (Ohio), Minority Whip Eric Cantor (Va.) and GOP Conference Chairman Mike Pence (Ind.) opposed the legislation, but GOP Policy Committee Chairman Thaddeus McCotter (Mich.) supported it.

Labor unions and manufacturers have been pressing for action for years. They argue China’s currency manipulation lowers the cost of China’s exports, hurting U.S. workers and businesses. The U.S. trade deficit with China stands at $145 billion.

Democrats believe the bill could boost turnout for their party at the polls, and approval of the China bill was one of the last acts the House took before adjourning. Only five Democrats voted against the bill.

“We believe that passing this legislation here today gives the president leverage in his conversation with the Chinese,” Speaker Nancy Pelosi (D-Calif.) said in a floor statement.

Pelosi, who has often been criticized by China’s government, gaveled the final vote closed. Pelosi unfurled a banner in 1991 in Tiananmen Square that honored “those who died for Democracy in China.”

Republicans who opposed the bill sided with business groups, including the U.S. Chamber of Commerce, which lobbied against the legislation. They argued it could damage the U.S.-China trade relationship.

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Those Republicans voting aye largely hailed from states that have sizable manufacturing sectors, such as Michigan, Ohio and Pennsylvania.“Despite my disappointment about the lack of a broader trade agenda and the lack of action on these other concerns with respect to China, it would be an enormous mistake to give up completely on addressing China’s currency policy,” Camp said during the floor debate.

“I will vote for this bill because it sends a clear signal to China that Congress’s patience is running out but does not give China an excuse to retaliate against U.S. companies and their workers,” he continued.

Sponsored by Reps. Tim Ryan (D-Ohio) and Tim Murphy (R-Pa.), the bill would allow the Commerce Department to consider currency manipulation when calculating anti-subsidy duties. That could lead to higher tariffs on Chinese imports.

It is unclear whether the legislation will make it to President Obama’s desk, though Sen. Charles Schumer (D-N.Y.) has promised to push for a vote in the Senate’s lame-duck session after the election.

The White House has tried to keep the legislation locked up this year, but in recent weeks Treasury Secretary Tim Geithner has suggested the administration’s patience with China is wearing thin.

The House vote is likely to anger China’s government, which blames the U.S. trade deficit on other factors. This is the first time legislation hitting China on the issue has been approved by the House.

{mosads}China announced over the summer it would allow its currency to follow market trends, but the yuan has barely increased in value.

One business source opposed to the legislation earlier this week said how China responds to the vote could determine whether the Senate takes action. If China’s currency rises significantly between now and the lame-duck session, the source said, a Senate vote on the legislation would be less likely.

The vote Tuesday was a rare example of division within the House GOP conference, which has largely voted in lockstep against Democratic legislation this Congress.

Most Republican opponents of the bill acknowledged that China undervalues its currency, but echoed the concerns of business groups that say passing the measure would spark a trade war with China that could destabilize the U.S. economy.

“We are starting to see the makings of a currency war out there where others are devaluing their currencies at our expense,” said Rep. Charles Boustany Jr. (R-La.), who voted against the bill.

“We’re simply pandering instead of considering what will actually open new markets,” said Rep. Jeff Flake (R-Ariz.), another opponent.

Other Republicans argued that the U.S. needs to develop a comprehensive trade agenda in order to fully resolve its issues with China.

Some Democrats looked to attack Republicans who voted against the measure, saying they were siding with U.S. corporations with investments in China over U.S. workers.

“They always find an excuse to side with their foreign benefactors,” Rep. Peter DeFazio (D-Ore.) said of the GOP. “They’re worried about a trade war. We’re at war at China … They are supporting capitulation; we are finally starting to fight back on this side of the aisle.”

Other Republicans said China’s currency policies had devastated U.S. manufacturers, and complained that both the Bush and Obama administrations had been slow to act.

“Chinese currency manipulation is the driving force behind this destruction” of the manufacturing sector, said Rep. Mike Rogers (R-Mich.). He said the two White Houses had “refused to do anything but talk on the issue of Chinese currency manipulation.”

Republican Rep. Dana Rohrabacher (Calif.), a frequent critic of China’s human-rights policies, said: “[Chinese leaders] have not only mistreated their own people, because they are the worst kind of tyrants that one can imagine, they have mistreated the American people as well.”