Supporters said mere consideration of the bill might persuade China to move more quickly to realign its currency and end what they consider an unfair advantage that benefits Chinese manufacturers to the detriment of U.S. companies.
But opponents fear that the legislation could encourage China to impose retaliatory tariffs and even spark an all-out trade war with Beijing. They say the measure is an election-eve political ploy designed to let senators show that they want to get tough with Beijing as voters fear the rising power of the Chinese economy.
Senate Democrats have pursued the measure despite hesitancy from the White House, which is concerned that the congressional action could disrupt delicate diplomatic talks over the issue.
On Thursday, Obama told reporters that he had informed Senate leaders of his concerns about “symbolic” legislative action.
“Whatever tools we put in place, let’s make sure that these are tools that can actually work, that they’re consistent with our international treaties and obligations,” he said.
He promised that his administration would aggressively confront China over practices that he said have been “gaming the trading system.”
A final vote on the bill that was to have taken place Thursday evening was pushed to Tuesday, as a debate broke out on the Senate floor. At issue were the arcane rules that govern whether the minority can offer unrelated amendments to legislation after senators have agreed to end debate.
Democratic leaders changed the rules of the Senate to procedurally block a series of GOP amendments, including an effort to tack Obama’s $447 billion jobs package onto the currency bill.
Republicans were aiming to embarrass Democrats by forcing an immediate vote on the jobs plan and highlighting that opposition to some elements of the plan is shared by Obama’s allies.
Democratic leaders decried the effort as a political stunt and said the Senate will vote next week on a new version of the president’s jobs plan that will pay for the package through a tax on millionaires, which senators support, instead of a menu of tax increases on those making more than $250,000, as the president had suggested.
The Republican move was always destined to fail — it would have required 67 votes to even move to a vote on the jobs plan. But GOP leaders protested a change in rules that prohibited them from even attempting the amendment.
Earlier Thursday, 62 senators had voted to end debate on the bill, a clear sign that the measure will eventually get the support of the 50 senators necessary for final passage.
The Chinese currency measure’s chance of success in the GOP-led House is uncertain. Speaker John A. Boehner (R-Ohio) has called it “pretty dangerous” and signaled likely opposition.
Passage of the bill would nevertheless be a significant victory for Senate Democratic leaders, who presented the measure as a way to spur job growth without spending money. But the push was also a bid by them to fend off a Republican effort to win control of the Senate in November 2012.
The weakness of the Chinese currency, known widely as the yuan, means U.S. exports cost more in Chinese markets while Chinese products sell in the United States for less, giving Chinese companies a competitive advantage over their American counterparts.
The bill is designed to make it more likely that the U.S. Treasury Department would take action against China for undervaluing the yuan. In regular reports, the agency finds that China’s currency is undervalued but declines to conclude that it is the result of manipulation.
The bill would require retaliatory tariffs on nations found to have “misaligned” currency, even if the Treasury does not find monetary manipulation.
China has been allowing the value of its currency to rise in recent years, but economists still estimate that it is undervalued by as much as 15 to 38.5 percent.
The administration has been reluctant to impose tariffs on China for not pushing the value of its currency higher. The weak yuan is estimated to cost the U.S. economy up to 2 million jobs.
“To those who say it’ll cause a trade war, we are in a trade war,” said Sen. Charles E. Schumer (D-N.Y.). “We have our clocks cleaned every day and lose jobs every day because of unfair Chinese practices.”
Opponents said the bill would provoke a dangerous escalation with China.
Sen. Orrin G. Hatch (R-Utah) told fellow senators that the bill sends a message that “the U.S. is turning inward once again, seeking protectionist solutions to global problems, and not really interested in working with other countries to solve our current international economic crisis.”
Staff writer Felicia Sonmez contributed to this report.
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