By Doug Palmer and Susan Cornwell

WASHINGTON, Jan 27 (Reuters) - Two leading Senate critics of China's currency policy said they would give President Barack Obama time to persuade Beijing to move faster to a market-based exchange rate before pushing for legislation.

"If the countries can work out a voluntary program, that would be better than legislation, but if that doesn't work we'll have to do something, do legislation," Senator Lindsey Graham, a South Carolina Republican, told Reuters.

Graham and Senator Charles Schumer, a New York Democrat, were authors of a 2005 bill threatening China with a 27.5 percent tariff on its exports to the United States unless it raised the value of its currency against the dollar.

Although they eventually abandoned that effort, they have remained vocal on China currency issues which have been a sore spot in U.S.-Sino relations for years.

U.S. manufacturers, labor groups and lawmakers from both parties complain China deliberately undervalues it currency to give its goods a price advantage in world trade.

Schumer told Reuters in an e-mailed statement he was heartened when U.S. Treasury Secretary Timothy Geithner said last week that China was "manipulating" its currency -- using a term the Bush administration had deliberately avoided.

Geithner's comment raised expectation the Obama administration would formally label China a currency manipulator in a Treasury Department report in April.

"Because the administration came out of the box very quickly, we have real hope that they will do this on their own, which would be a lot easier and quicker than enacting legislation. So we will wait for them to issue their report this spring," Schumer said.