Biden officials pitch pared-down China competition bill to House

Top Biden administration officials pressed House lawmakers on Thursday to move quickly on legislation designed to boost domestic production of semiconductors, warning of both the national security and economic harm that could come with inaction.

If the early response was any gauge, their pitch was highly successful. 

“Across the board everyone wants to get something done,” said Rep. Brad Schneider (D-Ill.). “My walkaway was — at least in that room — everyone was on the same page.” 

The House and Senate have both passed much larger legislative packages designed to improve U.S. competitiveness with China. But the bills — known as “America COMPETES” in the House and “USICA” in the Senate — have been stalled for weeks in tough conference negotiations between the chambers with no resolution in sight.

In a closed-door briefing in the Capitol Visitors Center with House lawmakers of both parties, administration officials — Commerce Secretary Gina Raimonda, Director of National Intelligence Avril Haines and Deputy Defense Secretary Kathleen Hicks — urged Congress to step on the gas. 

And to grease the skids, they’re urging lawmakers to focus on just a portion of the larger bills — a piece called the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act — which features emergency funding to help domestic semiconductor manufacturers and wean the U.S. from its dependance on Chinese-made chips.  

Their message was “very straightforward,” said Rep. Jim Himes (D-Conn.). “Pass USICA-COMPETES right away.”

“They made the point that the core issue from a national security standpoint is CHIPs.”

The push comes a day after Raimondo and Defense Secretary Lloyd Austin delivered a letter to congressional leaders in both chambers urging quick passage of the CHIPs legislation. 

“If these funds are not appropriated in the coming weeks, the United States will miss out on the current wave of semiconductor investment,” they warned. 

Senate Majority Leader Charles Schumer (D-N.Y.) appears ready to respond, eyeing a vote on a version of CHIPs as early as next week, according to Senate sources familiar with the plan. The bill would provide more than $50 billion in funding, the sources said.

Speaker Nancy Pelosi (D-Calif.) on Thursday said House Democrats are still pushing for a larger package, but she did not rule out the possibility of taking up the CHIPs bill on its own. She cited Raimondo’s recent push for “CHIPs — or maybe CHIPs plus a thing or two.”

“She said, ‘Chips,’ and then she said, ‘Chips plus,'” Pelosi said during a press briefing in the Capitol. The latter, the Speaker added, is “what we’re more interested in.”

“We have been working constantly on the CHIPs bill, and we need to have the transformative nature of research and education and the rest, to make us continue to be preeminent in the world,” she continued. “How it shapes up in the next short period of time, we’ll see. But we are determined that we will pass a bill.”  

House Democrats have been fighting for the much broader competitiveness provisions in their COMPETES Act, which passed through the lower chamber in February. Still, after Thursday’s briefing, even liberals in the caucus said they’re ready to support the CHIPs bill as a standalone vote for the sake of speed. 

“The whole ball of wax is important,” said Rep. Hank Johnson (D-Ga.). “But if we have to carve out a certain portion of the bill and get it passed expeditiously, I’m in favor of that.”

Rep. Juan Vargas (D-Calif.) said he’d “like to see the biggest thing possible.” But echoing the others, he said he’s ready to back a trimmer CHIPs strategy. 

“I think it will pass,” he said. 

The fight ahead will focus on what additional provisions, if any, are able to pass through both chambers and reach President Biden’s desk.

Schneider, for one, says he’s not ready to concede CHIPs alone. 

“CHIPs is a piece of it, but everything around it is important as well,” he said. “I’m not walking away saying it’s CHIPs only.”

Rep. Dean Phillips (D-Minn.) offered a similar assessment, saying some Democrats will likely insist on safeguards to ensure that the tens of billions of dollars in new funding doesn’t go to support semiconductor production in China.

“The sense of the House seems to be if it’s only CHIPs, it’s got to have guardrails — significant,” he said. “I think the Senate isn’t as convinced.” 

Still, the administration’s national security concerns are sinking in, and House lawmakers say they’re hoping to pass something before the fast-approaching August recess. 

“I think the sense is we have to,” Phillips said of that timeline. “It’s just a matter of how much, and which one.”