China’s Competitiveness and Chip Bill Passes the House and Goes to Biden

US President Joe Biden reacts to a memo handed to him saying the CHIPS-plus bill has passed the House during a meeting with CEOs on the economy in the Eisenhower’s South Court Auditorium Executive Office Building, next to the White House, in Washington, DC on July 28, 2022.

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The House on Thursday passed bipartisan legislation to boost U.S. competitiveness with China by allocating billions of dollars to domestic semiconductor manufacturing and scientific research.

The bill passed 243 votes to 187, with no Democrats voting against the bill. Twenty-five Republicans voted for the legislation, even after a last-minute push by GOP leaders to oppose it.

The bill, which passed the Senate on Wednesday, is now heading to the White House for the president. Joe Biden sign into law.

This is “exactly what we need to do to grow our economy right now,” Biden said in a statement after the vote. “I look forward to signing this bill.”

Lawmakers pushed to quickly approve the package before leaving Washington, DC, for the August recess. But the final vote came after years of argument on Capitol Hill, legislation taking many forms and names in both houses of Congress.

The ultimate version, known as the Chips and Science Act, includes more than $52 billion for U.S. companies producing computer chips, plus billions more in tax credits to encourage investment in chip manufacturing. It also provides tens of billions of dollars to fund scientific research and spur innovation and the development of other American technologies.

House Speaker Nancy Pelosi, D-California, called the bill “a major win for American families and the American economy.”

But House Republican Leader Kevin McCarthy, R-Calif., urged his colleagues to “reject this deeply flawed bill” and “start from scratch” in floor remarks ahead of the vote.

The The Senate passed the bill Wednesday in a 64-33 vote, drawing support from 17 Republicans. Among those yes votes was Senate Minority Leader Mitch McConnell, R-Ky., who previously warned that Republicans would not support China’s competition bill if Democrats continued to pursue an unrelated reconciliation package.

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Hours after Wednesday’s bipartisan Senate vote, Senate Majority Leader Chuck Schumer, DN.Y., and Sen. Joe Manchin, DW.Va., revealed they had reached an agreement on a vast bill of reconciliation. They hope to pass this package next week with just a simple majority in the Senate, which is evenly split between Republicans and Democrats, with Vice President Kamala Harris casting any deciding vote.

Shortly after the deal was announced, House Republican leaders urged their members to vote against the flea and science act. They opposed giving multi-billion dollar subsidies to chipmakers at a time of historically high inflation, while noting the timing of the Democrats’ reconciliation deal.

“The Democrats’ partisan agenda gave us record inflation, and now they are on the verge of sending our country into a crushing recession,” House Minority Whip Steve Scalise, R-La., said in a memo. on duty Wednesday evening.

Republicans echoed this new position during floor debates ahead of the vote. Rep. Frank Lucas, the top Republican on the House Science Committee, where many provisions of the bill were first deleted, said he would regretfully vote against it because he was “irrevocably” tied to the plan. reconciliation.

That committee’s chairman, Rep. Eddie Bernice Johnson, D-Texas, responded by calling on all lawmakers to “put politics aside” and vote for the bipartisan bill.

Some Republicans who opposed the bill on its own merits said it lacked “guardrails” to prevent any funding from ending up in China’s hands. Other critics argued that the US would have to spend several billions more to have any real chance of competing with the world’s leading chipmakers.

But the bill’s supporters say it’s vital to America’s economy and national security to build more chips, which are increasingly critical components in a wide range of products, including consumer electronics. , automobiles, healthcare equipment and weapon systems.

Fleas have been rare for the Covid-19 pandemic. Factory shutdowns early in the outbreak sidelined chip production in Asia, while consumer demand for automobiles and improved home electronics that need the chips increased during the shutdowns. The United States’ share of global chip production has also fallen sharply in recent decades, while China and other countries have invested heavily in the industry.

The United States also makes few of the most advanced types of semiconductors, which are largely produced in Taiwan, the epicenter of rising political tensions with China.

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Much of modern warfare requires sophisticated semiconductors – every Javelin missile launch system contains hundredsfor example – leading US defense officials to worry about the country’s reliance on foreign producers for its chip supply.

Biden also blamed chip shortages for skyrocketing inflation that has hampered his presidency. A lack of chips available for new car manufacturing has been linked to soaring used car pricesthat push inflation up.

“America invented the semiconductor. It’s time to bring it home,” Biden said this week.

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