Harry Reid’s China Gambit

Posted: Oct 03, 2011 12:01 AM

As President Obama barnstorms across the country on taxpayer dollars telling Congress to “pass this bill,” he is encountering some unlikely opposition back in Washington: Senate Majority Leader Harry Reid (D-NV).

Late last week, White House Press Secretary Jay Carney downplayed any talk that Harry Reid and President Obama are not on the same team when it comes to the new stimulus plan. Carney told reporters there “were things that had to get done” in the Senate during “September because of the fiscal year constraints.”

(Of course, Harry Reid’s unwillingness – or inability – to produce a budget and move appropriation bills are partially to blame for those “constraints,” but that is a completely separate column…or two.)

Well, it’s now October and those “fiscal year constraints” are behind us. But when the Senate reconvenes this week, Harry Reid will move forward on a bill dealing with China’s currency, not President Obama’s much-hyped stimulus plan. When asked when he’d take up President Obama’s plan, Reid said, “We’ll get to that,” but “I don’t think there are any more important jobs measures than China trade.”

On the policy, Harry Reid is flat out wrong. The Currency Exchange Rate Oversight Reform Act of 2011 (S.1619), which threatens economic sanctions against any of our trading partners whose currency is found to be “misaligned” by Treasury Department guidelines, is just bad policy. While the value of China’s currency may make for a good political talking point, there is no evidence to suggest it has any real impact on American job creation.

The distortions in the Chinese economy are numerous, making it difficult to sort out which policies harm the U.S. But, for the sake of argument, let’s assume China’s currency does rise further. The result of passing this bill will be that cash-strapped Americans will pay more for Chinese goods. Unfortunately, the poor will be disproportionately harmed by higher priced Chinese goods, which are mostly lower-end clothing and consumer electronics.

On the politics, the move is a slap in the face to President Obama, who is telling everyone that will listen how important his new stimulus plan is to the economy. Instead, the Senate is poised to spend weeks (yes, weeks) on a bill that is nothing more than a political football that has been fumbled back-and-forth numerous times in Harry Reid’s Senate.

Yet, Democratic National Committee Chair Debbie Wasserman Schultz doesn’t see it as opposition. Just last month, she said, “I haven’t sensed any resistance from Democratic senators” and she counters that Reid “pledged” to move the bill through the Senate.

Of course, there are plenty of Democrat Senators opposed to the President’s plan, which is why Harry Reid is so reluctant to move to the bill – the votes simply are not there. That’s not conjecture; it comes straight from Senator Dick Durbin (D-IL), who is charged with counting the votes. When asked if the votes were there, he said, “Not at the moment, I don’t think we do, but, uh, we can work on it,”

How will Senate Democrats work on it? By allowing the Senate to have a robust debate about China currency, which will include an open amendment process and multiple procedural votes. It will be a long process, one designed to avoid a vote on the new stimulus while discussing a politically hot topic of China’s currency.

So long as no one forces his hand or calls him out for being a Do-Nothing Majority Leader, it is a win-win situation for Harry Reid, who has played this game before.

In July, as America – and much of the world – was focused on the debt ceiling battle, Harry Reid’s Senate spent three weeks on a small business bill. Then, as now, Harry Reid’s goal was twofold: 1) avoid a politically unpopular vote or position stand on the debt ceiling that could endanger Senate Democrats in 2012; and 2) shift the focus to Senate Republicans and blame them for obstructionism.

Last week, House Budget Chairman Paul Ryan (R-WI) described this dynamic perfectly, saying: “we should not fear false attacks again in 2012. Fear and demagoguery are the last refuges of an intellectually bankrupt party – and the moment calls for leaders who are not afraid to be honest with people about how they would solve the problems we face.”

Aside from earmarks, Harry Reid’s political currency consists of false attacks and demagoguery. Americans are looking for courageous leaders, who are willing to take on the Washington Establishment and status quo, not Harry Reid’s broken, dysfunctional and politicized Senate.