Senate Democratic Leader Harry Reid (Nev.) and New York Sen. Charles Schumer (D) are proposing a compromise to move forward on President Obama’s trade agenda, which suffered a serious setback Tuesday.
Reid and Schumer are proposing to pull language addressing currency manipulation from a customs and enforcement bill that Democrats insist must be included in a package of legislation along with fast-track authority and Trade Adjustment Assistance.
In return, they want the Senate to hold a vote on stand-alone legislation cracking down on currency manipulation before moving to the larger trade package, which would include fast-track, TAA, a pared-down customs bill, and a package of trade preferences for African nations, according to a Democratic leadership aide.
Reid and Schumer floated the idea, and Schumer suggested it to Senate Republican Whip John Cornyn (Texas) late Tuesday afternoon.
Senate Majority Leader Mitch McConnell (Ky.) did not respond directly to the Democratic offer in remarks on the Senate floor Wednesday morning. He urged Democrats to allow the debate on the package he and other Republicans favor, which includes only fast-track authority and TAA.
“Hardly anyone believes there is a serious policy leg for these folks to stand on,” McConnell said of Senate Democrats who blocked the start of the trade debate.
McConnell said attaching the customs and enforcement bill to the fast-track and TAA would derail those measures, but did not comment specifically on a customs bill stripped of currency manipulation language.
“The demand to merge four separate trade bills, including a customs bill into one trade bill isn’t a strategy designed to pass better trade legislation but a poison pill designed to kill it. So we certainly won’t be doing that,” he said.
Senate Democrats dealt Obama’s trade agenda a blow Tuesday when the entire caucus, with the exception of Sen. Tom Carper (Del.), voted to sustain a filibuster on the motion to begin the trade debate.
They refused to let the trade package come to the floor unless it included all four bills passed last month out of the Senate Finance Committee.
Obama met with a group of pro-trade Democrats at the White House Tuesday afternoon in an effort to secure their support. He sat down with Carper and Sens. Michael Bennet (Colo.), Maria Cantwell (Wash.), Ben Cardin (Md.), Heidi Heitkamp (N.D.), Tim Kaine (Va.), Patty Murray (Wash.), Bill Nelson (Fla.), Mark Warner (Va.) and Ron Wyden (Ore.), the senior Democrat on the Finance panel and co-author of fast-track legislation.
Lawmakers have pushed for several years to include currency manipulation provisions in trade deals that would increase the likelihood of penalties against trading partners engaging in the practice.
Right now there’s no way to use trade rules to stop a country from lowering the value of their currency to gain a global advantage. Companies such as Ford want a mechanism that would halt the practice when it’s discovered.
The Democratic leadership aide predicted a stand-alone currency manipulation bill would pass the Senate. The House would then decide whether to attach it to the larger trade package.
“It would then be up to the House,” said the aide. “It could be a condition of what people demand to vote for the trade package.”
The White House, leery of a possible trade dispute with China, has urged lawmakers not to attach currency manipulation language to fast-track authority. Many Republicans also oppose doing so.
“What we have indicated is that we believe that there’s a better way for us to resolve concerns related to currency,” White House press secretary Josh Earnest told reporters this week.
“The concern that we have about some of the approaches that are currently being discussed on Capitol Hill is that they could be used to effectively undermine the independence of the Federal Reserve,” he added.