NEW YORK (CNNMoney.com) -- The debate in Congress over China's currency policy has lawmakers lining up to defend two key economic constituents - manufacturing and agriculture - that are on different sides of the issue.
In a hearing on Capitol Hill on Wednesday, two Democratic representatives from Ohio, Tim Ryan and Jon Boccieri, argued that China has manipulated its currency for years to gain a competitive advantage over U.S. manufacturers, in violation of trade laws.
China's currency policy has cost thousands of American jobs, hindered the economy and resulted in a massive trade deficit, they said.
"Of all of the unfair trade practices driving the loss of jobs in my district and the Midwest, China's currency policy is among the worst," Boccieri told the House Ways and Means Committee.
He said the policy has resulted in the loss of between 1.5 million and 3 million U.S. manufacturing jobs, while the nation's trade deficit with China has grown to over $220 billion a year.
The Democrats called on Congress to pass the Currency Reform for Fair Trade Act. The bill, sponsored by Ryan, would direct the Commerce Department to treat undervalued currencies as a prohibited subsidy under World Trade Organization guidelines. The goal is to encourage China to allow its currency to float freely according to market forces.
But two Republican lawmakers called for a more measured approach, saying overly aggressive legislation could put the nation's agriculture industry at risk.
"Any legislative proposal must be given the utmost attention so that we do not disrupt our current growing exports to China, particularly those from the U.S. agriculture industry," said Rep. Adrian Smith, R-Neb.
According to Smith, food and agriculture exports to China more than doubled to nearly $16 billion in 2009 from $6.8 billion in 2008, and the growth is expected to continue this year.
Rep. Lynn Jenkins, R-Kan., said it's clear that China has undervalued its currency. But she blamed deficit spending and the nation's $2.5 trillion debt to China for worsening the imbalance that is hurting U.S. manufacturers.
"Our willingness to operate in deficit allows the Chinese government to remove dollars from their domestic economy and use them to purchase U.S.-dollar-denominated securities," she said.
The Ways and Means committee was holding two days of hearings on the China currency issue. On Thursday, Treasury Secretary Timothy Geithner was expected to present the Obama administration's position.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.19%||4.26%|
|15 yr fixed||3.23%||3.27%|
|30 yr refi||4.17%||4.23%|
|15 yr refi||3.21%||3.25%|
Today's featured rates:
UBS is the latest major bank to get sucked into a U.S. probe over 'dark pool' trading venues. More
New annual report from U.S. government shows the long-term prognosis for Medicare has improved thanks to slower health spending, while the outlook for Social Security remains unchanged. More
Apple bought the Pandora of news radio, Swell, for a reported $30 million. More
Steve Mason, a pastor from California, inherited more than $100,000 in student loan debt when his 27-year-old daughter died suddenly in 2009. With interest and late penalties, the debt has since ballooned to $200,000. More