Durbin and Brownback Meet with Treasury Secretary to Discuss Foreign Investment in Sudan, Trade Relations & Budget

Press Release

DURBIN AND BROWNBACK MEET WITH TREASURY SECRETARY TO DISCUSS FOREIGN INVESTMENTS IN SUDAN, TRADE RELATIONS & BUDGET

U.S. Senator Dick Durbin (D-IL), who serves as chairman of the Appropriations Subcommittee on Financial Services and General Government (FSGG), and Senator Sam Brownback (R-KS) who serves as Ranking Member of the subcommittee, today met with Treasury Secretary Henry Paulson to discuss foreign investment in Sudan, the U.S.-China trade relationship, and the 2008 Treasury budget.

Earlier this week, Senator Durbin introduced the Sudan Divestment Act which affirms the sense of Congress that states and other entities should be permitted to divest their assets of certain holdings as an expression of opposition to the genocide and polices of the Khartoum government. In today's meeting, Durbin and Brownback talked to Paulson about China's investments in Sudanese oil and economic and financial actions that could be used to change Sudanese behavior.

"The United States must do everything in its power to stop the genocide in Darfur," Durbin said. "This genocide has claimed the lives of hundreds of thousands of innocent people and displaced millions of Darfurians. We believe that we have the political, economic and financial tools needed to pressure the Sudanese government. And the U.S. Treasury Department is in a unique position to ensure that other governments are not undermining our efforts."

Durbin and Brownback also addressed the importance of promoting economic changes within China that would benefit the both the Chinese and the U.S., including urging the Chinese to allow their currency to gradually float freely, clamping down on intellectual property rights violations and decreasing trade barriers. The yuan -- sometimes known as renminbi -- has been tightly pegged to the U.S. dollar since 1994 (approximately 8.28 yuan to the dollar). During that period of time, China's economy has grown dramatically, averaging over 8% growth per year. If China's currency freely floated in the market, as is the case with virtually all major world currencies, it would have appreciated substantially reflecting this economic strength. However, it has appreciated very slowly in the last year, and many economists estimate that the yuan is now undervalued as much as 15 to 40 percent. The undervaluation of the yuan makes China's exports relatively less expensive for foreigners, and it makes foreign products relatively more expensive for Chinese consumers and discourages imports to that country. The practice of "currency manipulation" to gain a trade or competitive advantage violates World Trade Organization and International Monetary Fund agreements, of which China is now a party.

Finally, in today's meeting, Durbin, Brownback and Paulson discussed the Community Development Financial Institutions Fund (CDFI) which provides much needed capital to institutions that serve distressed communities and low-income individuals. The 2008 budget request for CDFI is $28,557,000 - a 47.6% reduction from the 2007 amount. "The Community Development Financial Institutions Fund has effectively used public money to attract private capital into low income communities for more than 10 years," said Durbin. "Chicago is home to many of the nation's finest Community Development Financial Institutions including Shore Bank and the Illinois Facilities Fund."

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