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Tuesday, September 20, 2011 - 15:18

US's Reid: 'Not That Sure' Will Be Able To Avoid Gov Shutdown

--Senate Majority Leader Says Senate Will 'Do Something On' China FX
--Sen. Reid; Senate's China Currency Bill Is 'Jobs Bill'
--Sen. Reid: Blasts House GOP For Blocking Needed Disaster Funds
--Senate Minority Leader McConnell: Won't Be Government Shutdown

WASHINGTON (MNI) - Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell gave sharply different assessments Tuesday about the fate of a 2012 fiscal year stop-gap spending bill that will fund the government until November 18.

In back to back briefings, McConnell said he is confident the House and Senate will pass a stop-gap bill this week.

"There won't be a government shutdown," McConnell said after a meeting with Senate Republicans.

But Reid, after meeting with Senate Democrats, offered a different assessment.

"I'm not that sure," that a government shutdown will be avoided, Reid said, arguing that House Republicans and Senate Democrats have very different ideas about how large the emergency assistance package should be that is attached to the stop-gap bill.

The House GOP supports a package of $3.65 billion in emergency relief while Senate Democrats support a $6.9 billion package.

"We're not going to cave in on this," Reid said. "We are not going to back down," he added.

The stop-gap bill, which is expected to fund the government until Nov. 18, is needed because Congress has not passed any of the 12 regular spending bills. The new fiscal year begins Oct. 1.

The House will vote on the FY'12 stop-gap bill Wednesday.

Reid said the Senate schedule is packed, but taking up a Chinese currency bill is a top priority for him.

"We're going to do something about Chinese currency," Reid said, adding this is a "jobs bill."

There are several versions of currency legislation that have been drafted. One would prevent the Commerce Department from using a long-standing rule that makes it more difficult to designate an undervalued currency as an illegal export subsidy that would result in economic sanctions.

The White House remains cool to currency legislation. Administration officials believe that currency matters in general and especially those pertaining to China are best addressed in private talks led by the Treasury Department.

House Republican leaders are also not supportive of China currency bills, saying they address only one aspect of the complex bilateral relationship. They say that a much more comprehensive approach is needed.

In another matter, Reid said the Senate must pass legislation to assist workers who have lost their jobs due to international competition before it takes up three pending trade agreements.

Reid said repeatedly that the Senate will not consider any of the three pending U.S. bilateral trade agreements until the Senate passes a TAA bill.

Those pending U.S. trade agreements are with Panama, Colombia and South Korea.

McConnell said passage of the three trade bills is important to boost the U.S. economy. "We have taken America out of the trade business," he said.

** Market News International Washington Bureau: (202) 371-2121 **

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