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Senators Call for Strong US Action on China Currency

Members of the U.S. Senate are pushing the Obama administration to do more to pressure China to devalue its currency. They have proposed legislation that could lead to penalties on Beijing if it refuses to float the yuan on world currency markets

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Lawmakers say they are fed up and want action.

Michigan Democrat Debbie Stabenow says China is cheating by keeping the value of its currency artificially low.

"…and it needs to stop so that we can have the level playing field that our workers and businesses need to be able to make things again in this country," she said.

Stabenow is one of five senators pushing a piece of legislation that would require the Obama administration to impose penalties if China refuses to float its currency.

All come from states that are dependent to a large degree on exports. But their political views run the gamut - from some of the most liberal members of the Senate to the most conservative.

"This is an unusual alignment that you are seeing behind this bill and this is an unusual time," said Kansas Republican Sam Brownback, who says this is one issue on which Senators of opposing parties are united in frustration.

He says if China will not voluntarily devalue its currency, Congress will have to see that pressure is applied.

"If they are not going to do it, we are going to force it," he said. "And we are going to put forward a mechanism to provide for countervailing duties and tariffs after an extended period of time if they are not going to deal with this situation."

The necessary legislation was crafted by Republican Lindsey Graham of South Carolina and Democrat Charles Schumer of New York. They introduced a similar bill several years ago in what they now acknowledge was a symbolic effort to get a message to Beijing.

This time, they say, they are going to push the measure through both the House and Senate. Graham says he has no doubt it will pass.

"This is a good coalition to make something happen in the Senate and I hope our House colleagues will follow," he said.

The proposed legislation would require the Treasury Department to act when it finds an undervalued currency. The Commerce Department would be authorized to impose anti-dumping tariffs if a misaligned currency is deemed to be a subsidy.

Drafters of the measure say they have discussed the matter with Treasury Secretary Timothy Geithner. At the White House, spokesman Robert Gibbs was asked if the push from Capitol Hill might give President Barack Obama more ammunition in his discussions with Beijing.

"I think the most leverage that the president has is sitting face-to-face with leaders in Beijing and telling them that a market-oriented approach to their currency - I think that is about as much leverage as one can bring to bear in a single sitting," he said.

Gibbs refused to comment on the merits of the legislation.

But the senators behind the measure contend it will help the president meet one of his big economic goals: a doubling of U.S. exports in five years.