Business & Economy
Q & A on Chinese Currency and U.S. Exports with U.S. Senator Chuck Grassley PDF Print E-mail
News Releases - Business & Economy
Written by Sen Charles Grassley   
Monday, 03 October 2011 13:01

Q:        What’s the effect on Americans when China undervalues its currency?

A:        China’s policy of intervening in its currency markets to limit or halt the appreciation of its currency, the yuan, against the U.S. dollar or other currencies has the effect of keeping Chinese exports cheap and imports expensive, putting some U.S. businesses at a disadvantage.  That has a negative effect on U.S. jobs.  It’s also an unfair and unlawful trade advantage for China to subsidize its exports.  New market opportunities are needed for job creation here at home, and market-based currency policy is an important factor in free and fair trade relationships.  Iowa has long been an exporting state, with good-paying jobs related to exports in manufacturing and agriculture.  One in every three tractors made in John Deere’s plant in Waterloo is sold to customers overseas.  One in every three acres planted on Iowa farmland heads to the international marketplace.  Ag exports account for one-quarter of farm cash receipts in Iowa.  U.S. exporters deserve a level playing field with China’s exporters.

Q:        What can be done?

A:        By law, the Treasury Department is required to name any country it suspects of manipulating the value of its currency to gain an unfair advantage in international trade.  Unfortunately, for too long, presidential administrations of both parties haven’t done what the law allows.  The current debate in Congress over China’s currency policy draws from more than five years of legislative proposals that would induce China, and other countries manipulating their currencies, to reform its currency policy or to address the effects of that policy on the U.S. economy.  I’ve introduced bipartisan legislation in the past, and this fall there is a proposal with bipartisan support to increase U.S. oversight of currency manipulation.  The measure would trigger meaningful consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment and make sure U.S. trade laws may be used to counter the economic harm to U.S. manufacturers caused by currency manipulation, in accordance with international trade laws.

The executive branch also can and should prepare a case against China’s currency manipulation in the World Trade Organization, the 153-member organization (made up mostly of sovereign nations) that governs international trade.  The framework for World Trade Organization policies is based on the principles of non-discrimination, reciprocity, binding and enforceable commitments, transparency, and safety valves.  In joining the World Trade Organization ten years ago, China committed to adhering to the trade rules of the global marketplace.  If China is not willing to live up to its obligations, the behavior should be challenged under the international rule of law.

 

September 30, 2011

 
Road to Recovery by U.S. Senator Chuck Grassley PDF Print E-mail
News Releases - Business & Economy
Written by Sen Chuck Grassley   
Monday, 03 October 2011 08:50

As Americans stare down a road of economic uncertainty, the White House has issued yet another spending plan that it says will put Americans back to work.  Shoveling more tax dollars out the door can’t make up for the President’s first stimulus plan that turned out not to be so shovel-ready after all.

Adding insult to injury, the President is pitching to pay for his $447 billion plan by raising taxes.  He says it’s a matter of fairness.  Fair to whom?  Raising taxes on small business owners will not help create jobs.  Instead of rewarding risk and ambition, the President’s so-called Buffett Rule would siphon away job-creating capital and investment for Main Street and send it to Washington to spend.

Considering Washington’s poor track record for prudent fiscal stewardship, it doesn’t make sense to believe that raising taxes on the wealthy will solve Washington’s deficit disorder.

Just consider a recent audit by the internal watchdog at the U.S. Justice Department.  The analysis revealed extravagant spending on the taxpayer’s dime, including conference fees charging $16 per muffin and $8.24 per cup of coffee.  Has the federal bureaucracy even heard of sticker shock?  The taxpaying public deserves better.  The audit exposes yet another example of the type of excessive, wasteful spending that tells taxpayers Washington just doesn’t get it.  In fact, spending by the Justice Department on conferences has increased from $48 million in 2008, to $73 million in 2009 and $92 million in 2010.

And yet the President is trying to score political points with what he’s calling the Buffett Rule, named after the billionaire investor who likes to say he doesn’t pay enough taxes.  First, let’s be clear on one point.  No one is stopping Warren Buffett from sharing more of his income with Uncle Sam.  But it’s irresponsible and disingenuous for the President to portray the Buffett Rule as the solution to the federal government’s enormous budget shortfall.  In fact, the Buffett Rule is just another, more complicated version of the Alternative Minimum Tax, or AMT.  The AMT, originally intended to tax a small number of rich individuals who didn’t pay any federal tax, now hits millions of middle-class families.  Those wealthy who don’t want to pay any tax will always have an army of lawyers and accountants to help them.  An additional AMT isn’t going to change that.

What’s more, penalizing risk-takers and job creators will not help grow the economy. Strangling small businesses with red tape doesn’t help create jobs.  We need public policy to promote wealth creation, not to stifle ambition.

As policymakers, analysts and investors try to find a pulse in the U.S. economy, American households are hesitant to spend and businesses are bracing for slower growth.  With 25 million Americans looking for work, job creation is priority number one. Consumer confidence won’t recover without paychecks.

Partisanship and poll-driven ideology such as the Buffett Rule need to take a back seat. Instead, Washington needs to let America’s entrepreneurs; innovators and risk takers get America back on the road to economic recovery.

Congress gave the green light to ramp up America’s entrepreneurial spirit with passage of the America Invents Act.  As a sponsor of the bipartisan patent reform legislation signed into law in September, I worked to protect inventors’ rights and shift innovation and investment in our economy into the fast lane.

The new law gives fast-track approval process to start-ups, cutting an average wait time. When entrepreneurs need critical investment to get their business off the ground and running, patent ownership can mean the make-or-break difference.

Getting ideas, inventions and goods to the market sooner will help foster economic growth and employment on Main Street USA.  The America Invents Act addresses the backlog at the U.S. Patent and Trademark Office and recognizes the outdated patent review system slows innovation with costly litigation and delays.

The newly updated patent laws will give America’s scientists, researchers and engineers an edge in the global marketplace.  Public policies that clear the way for American businesses to compete and give consumers what they want will help put America on the path towards long-term prosperity.  Washington needs to steer clear of regulatory roadblocks and burdensome taxes that would send the U.S. economy in the wrong direction.

Let’s be clear.  The Buffett Rule would not help the U.S. avoid a double-dip recession or encourage employers to put Help Wanted signs in their storefronts on Main Street.

Tuesday, September 27, 2011

 
Senate votes on continuing resolution PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Monday, 03 October 2011 08:49
“There’s widespread support in Congress to fund assistance for Americans who have been hit by natural disasters.  We have an obligation as an insurer of last resort and need to keep that commitment.  The only thing different this year is the effort to offset some of the cost, in order to establish more fiscal responsibility in Washington in the face of deficits as far as the eye can see and in response to the clear message sent last year by voters.  The Senate majority leader drew a line in the sand that didn’t need to be drawn.  There’s bipartisan and bicameral support for necessary funding to keep the government operating, including assistance for disaster recovery.”

 
Governor Quinn Announces Japanese Manufacturer Investing $35 Million to Expand Illinois Facility PDF Print E-mail
News Releases - Business & Economy
Written by Katelyn Tye   
Monday, 03 October 2011 08:32

Continues Business and Economic Trade Mission throughout Asia

SPRINGFIELD – September 26, 2011. Governor Pat Quinn today announced that Japanese manufacturer Sakae Riken Kogyo Co. is investing $35 million to expand its Peru facility and create 25 new Illinois jobs. Today’s announcement is one of several business and economic partnerships the Governor has announced during his trade mission throughout Asia, and builds upon his aggressive goal of doubling exports by 2014.

“The relationships we’re building as a result of our outreach in the Asia market will help Illinois maintain its global standing and create jobs for us at home.” Governor Quinn said. “This project is another example of a strong Japanese company making the decision to locate or expand its domestic operations in Illinois where a company can not only thrive but build for the future.”

Sakae Riken Kogyo Co, which is operating under the name of Eakas Corporation, will expand its existing facility in Peru from 257,000 square feet to 537,000 square feet in order to support its next generation of manufacturing. Eakas Corporation produces plastic parts and other decorative trims for the automotive industry. Completion of the new plating line will make Eakas the only manufacturer in North America to provide color molding, paint, hydrographics™ and chrome decorative finish components under one roof.

The Department of Commerce and Economic Opportunity (DCEO) is providing a $675,000 Community Development Assistance Program (CDAP) Flex Grant to the village of Peru to assist with local infrastructure improvements in support of the facility. Illinois’ CDAP program - known nationally as the Community Development Block Grant (CDBG) program - supplies federal funding for community-based projects. Communities with populations of 50,000 or less can apply for CDAP-Flexible Opportunity grant funding to support a variety of projects that provide significant community benefits but fall outside of other CDAP program parameters.

“The Peru facility will provide a much greater global presence for Eakas Corporation, with farther reaching global expansion slated in the future for Sakae  Riken,” said Tom Mori, president, Eakas Corporation. “The long-term, outstanding effort by the current and past Eakas employees has allowed Eakas to enjoy the reputation of being an outstanding supplier of decorative parts in the automotive industry and is the primary reason why we are expanding in Illinois. This project wouldn’t have been possible without the outstanding efforts of Governor Quinn, the state of Illinois and the city of Peru.”

“We live in an increasingly global society and our global partnerships will be key to our long-term economic growth,” said DCEO Director Warren Ribley. “Through our aggressive set of business programs, we’re able to help businesses of all kinds grow and prosper.”

The state of Illinois is also providing Eakas with a $50,000 grant through the Illinois Jobs Now! capital program. DCEO is administering a $334,250 business investment package consisting of tax credits spread out over a 10 year period to support job creation, and a job training grant to help the company’s workforce remain on the cutting edge. The company is also eligible to receive local benefits from being located in an Enterprise Zone. The city is providing enhanced infrastructure capabilities including waste water treatment and electrical capacity.

"I would like to thank everyone from the city of Peru that participated in helping bring this $35 million expansion effort to Peru, our partners at the state of Illinois Department of Commerce and Economic Opportunity, and the Eakas Corporation for their confidence in the city of Peru," said Scott J. Harl, Mayor of Peru.

While in Japan, Governor Quinn is attending the Midwest U.S.-Japan Association’s annual meeting and talking with a number of Japan-based companies that have a presence in Illinois.

For updates on Governor Quinn’s trip, visit www.Illinois.gov or follow him on Twitter at @GovernorQuinn. More information about Illinois trade and business opportunities can be found on the Illinois Department of Commerce and Economic Opportunity’s website at www.illinoisbiz.biz.

 

 

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Q&A: Oversight of the SEC PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Monday, 03 October 2011 08:10

Q&A on the Securities and Exchange Commission

with U.S. Senator Chuck Grassley

Q:        What’s the role of the Securities and Exchange Commission?

A:        The SEC was created during the Great Depression, in the wake of the stock market crash of 1929, when the public’s faith in capital markets needed to be restored.  The agency is supposed to strengthen investor confidence by providing transparent, reliable information and rules for fair, orderly and efficient markets.  This should help facilitate the capital formation necessary for economic growth and job creation.  When the agency fails to meet its mission, the negative repercussions can impact anyone with investments monitored by the SEC, including investments in pension and other retirement funds.

Q:        How did you get involved in oversight of the SEC?

A:        I’m committed to the work of congressional oversight, and there’s a great need for it with the SEC.  Four years ago, based on information from a whistleblower and the work of my investigative staff, I spelled out in a comprehensive report (with then-Senator Arlen Specter) how the SEC Inspector General failed to investigate credible allegations by a former SEC attorney that his supervisor pulled punches in an investigation because of one Wall Street witness’ political clout.  The report hit a nerve and, ultimately, the SEC attorney who blew the whistle was vindicated.  Last year, the SEC finally obtained a $28 million settlement from the capital management company in question and paid the attorney years of back pay in a settlement related to his termination.

Adding to that, last March, a new Inspector General of the SEC issued a stinging rebuke of an agency program created more than 20 years ago to help target insider trading and securities fraud by rewarding agency employees who spoke up and shared valuable information.  Last summer, knowing that the SEC missed the biggest Ponzi scheme in U.S. history in the Bernard Madoff case, a colossal mishap that might have been avoided if the SEC had paid attention to whistleblower information, Congress passed legislation I authored to dramatically beef up a whistleblower office inside the SEC.  I’m still working to make sure that office is strengthened as the law calls for, and not weakened by institutional ego.  Every source of information is needed to combat financial fraud.  Both investors and taxpayers are exposed by wrongdoing.  I want to see the SEC embrace whistleblowers because they can help with the mission.  Whistleblowers could help stop another Madoff.

Q:        How can the public have confidence that the SEC isn’t too close to the industry it oversees, especially the big players?

A:        A revolving door between agency staff and the investment firms and banks they oversee has led to concerns of coziness and the soft-pedaling of potential criminal cases.  Last year, the SEC Inspector General identified cases where the revolving door appeared to be a factor in staving off enforcement actions and other types of oversight, including cases involving Bear Stearns and the Stanford Ponzi scheme.  I offered an amendment to the 2010 Dodd-Frank financial services reform bill to extend the cooling-off period at financial agencies to two years and to require a list of former agency employees who are representing clients before their former agencies.  Unfortunately, my amendment was blocked by the bill sponsors.  These reforms plus better record-keeping by the SEC are needed to help maintain the regulator’s integrity and preserve the public trust in a balanced playing field.

This year, I’m working to make sure the SEC is held accountable for what it does with referrals of suspicious trading activity from one of the biggest and most powerful hedge funds.  How the SEC handled specific referrals will shed light on how the enforcement system works.

I also highlighted the big divide between the stated policy of the SEC and its actual practice of providing information to the securities industry about the criminal law enforcement intentions of the Department of Justice.  The SEC enforcement manual, which was revised after the 2007 Grassley-Specter report, is undermined if the SEC relays to potential targets of investigation exactly what the Justice Department has in store for them.

Separately, I’ve helped to shed light on the actions of the SEC’s former General Counsel David Becker.  After missing the Madoff scam, the top leadership of the SEC let one of its own who profited from a Madoff account craft the commission’s position on how to treat Madoff victims.  The agency let this major conflict of interest slide and then tried to cover it up.  After a comprehensive report, the Inspector General has referred Mr. Becker’s case to the Justice Department, but the SEC’s ethical standards need to be stronger, consistent and uniformly applied from the executive suite to the rank-and-file employees.

 

Q:        Where else have you scrutinized what’s going on inside the SEC?

A:        This year, an enforcement lawyer at the agency wrote to me and outlined what he said was the agency’s destruction of least 9,000 files between 1993 and 2010, all related to initial inquiries into possible wrongdoing on Wall Street.  The lawyer said these files were destroyed as a routine matter of internal SEC policy, but that the shredding might have compromised enforcement cases against Madoff, Goldman Sachs, Wells Fargo, Bank of America, Deutsche Bank, Lehman Brothers, and the SAC Capital hedge fund.  I pressed for a full accounting.  In response, the National Archives said the SEC “did not have the authority to dispose of” the records in question under federal law.  And, the SEC directed staff to stop destroying preliminary investigative documents until further notice.  Keeping records is common sense in law enforcement.  You never know what might be valuable information.  Complete records also may help keep the agency honest and inoculate against compromised ethics and biases.

The promises of financial system reform will be empty if the top enforcement agency for free and fair markets is ineffective.  I will continue to work for accountability and necessary reforms of the SEC.

 

Friday, September 23, 2011

 
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