Senate passes chips and science bill aimed at better competing with China

The Senate voted with a large bipartisan majority Wednesday to pass a $280 billion bill to subsidize the domestic chip manufacturing industry and provide tens of billions of dollars for scientific research to keep the country’s technological edge in the global economy.  

The 64-33 vote caps more than a year of negotiations over the bill, which stalled for months in the House because of progressive Democrats’ objections to trade-related and other provisions in the bill, such as language to provide security safeguards for technological research.

The bill, which is expected to have enough votes to pass the House, would be one of the biggest legislative accomplishments of the Congress and would be a boon to the nation’s high-tech manufacturing industry.  

It is designed to reduce U.S. reliance on Chinese- and other foreign-manufactured chips in military hardware and other products. The revelation that the Pentagon waived restrictions on Chinese-manufactured components in weapons such as the F-35 fighter jet caused controversy several years ago.  

It will provide $54 billion in total appropriations for chips and public wireless supply chain innovation, including $39 billion in financial assistance to build, expand and modernize domestic semiconductor facilities and $11 billion for Department of Commerce research and development. 

It would also provide $81 billion to the National Science Foundation (NSF), including $20 billion for an NSF tech directorate, and create a 25 percent tax credit for investments in semiconductor manufacturing.  

Senate Majority Leader Charles Schumer (D-N.Y.), who led the negotiations on the bill, hailed it as a “historic and momentous” achievement.  

“We will look back on history and say this was a time when America really realized its responsibility to stay the leading economic and national security power in the world,” he said. “It’s a very, very significant bill.”  

Senate Commerce Committee Chairwoman Maria Cantwell (D-Wash.) and Sen. Mark Warner (D-Va.) were also heavily involved in crafting the legislation.  

President Biden applauded passage of the bill and said it would lower prices “on everything from cars to dishwashers.” 

“It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security,” he said in a statement released after the vote.  

Passage of the legislation will be a big boost for vulnerable first-term Sen. Mark Kelly (D-Ariz.), who participated in the crafting of the bill and said it will help create “tens of thousands of jobs” in Arizona, which he said will become a chip manufacturing hub.  

“We renegotiated the grant money and where the spending is going to be for chips,” said Kelly, noting the differences between the legislation and what was introduced before he got to Congress.  

He said Intel is going to build two more manufacturing and test sites in Arizona and that Taiwan Semiconductor Manufacturing Company, the world leader in chip innovation, is in the midst of building a $12 billion chip factory in his state.  

He also said that “it’s really good for our national security, and it’s good from the standpoint of bringing down the cost of anything that has microelectronics in it,” including cars and vacuum cleaners.  

The bill garnered the support of 17 Republicans, including Senate Minority Leader Mitch McConnell (Ky.) and members of his leadership team such as Senate Republican Policy Committee Chairman Roy Blunt (Mo.) and Sens. John Cornyn (Texas) and Rob Portman (Ohio).  

Sen. Roger Wicker (R-Miss.), the ranking member of the Senate Commerce Committee, said the bill will expand U.S. semiconductor production, create new opportunities for research and enhance the nation’s ability to compete with China. 

“There is no more important competition than the one for technological supremacy between the United States and China,” he said.  

But the legislation also ran into bipartisan opposition.  

Senate Budget Committee Chairman Bernie Sanders (I-Vt.) criticized what he called “corporate welfare” to the profitable semiconductor industry at a time when Congress doesn’t have enough votes to subsidize child care and fund universal prekindergarten.  

“All of [the] profound and serious concerns about the deficit fades away when it comes to providing a $76 billion blank check to the highly profitable microchip industry, with no protections at all for the American taxpayer,” he stormed on the Senate floor.  

Sanders was the only member of the Senate Democratic Conference to vote “no.” 

Two senior members of McConnell’s leadership team, Senate Minority Whip John Thune (S.D.) and Senate Republican Conference Chairman John Barrasso (Wyo.), voted against the legislation. 

The bill now moves to the House, where Democratic leaders will try to pass it before lawmakers leave town for the August recess at the end of the week. 

Senate Majority Leader Steny Hoyer (D-Md.) told The Hill that he expects the House to pass the chips and science bill by the end of the week.  

“That is the highest priority, quite frankly, we have, and my expectation is yes,” he said.  

Updated at 1:33 p.m.