House passes bill to subsidize US-made semiconductor chips

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On Thursday, the House voted to pass the $280 billion Chips and Science Act, a bill that would subsidize domestic semiconductor manufacturing and invest billions in science and technology innovation, with the goal of bolstering the competitiveness and autonomy of the United States in what is seen as a key industry for economic and national security.

The House passed the bill on a vote of 243 to 187, with strong bipartisan support — despite a last-minute push from House GOP leaders to oppose the bill. Twenty-four Republicans challenged the leadership and joined Democrats in supporting the measure.

President Biden hailed the outcome after winning bipartisan support last year for a major infrastructure bill and recently for a measure to reduce gun violence, overcoming election-year partisanship.

Biden said the bill is “exactly what we need to do to grow our economy right now.”

“Today the House passed a bill that will make cars cheaper, appliances cheaper, and computers cheaper,” Biden said in a statement. “This will reduce the cost of everyday consumer goods. And it will create well-paying manufacturing jobs across the country and at the same time strengthen American leadership in the industries of the future.

The Senate had passed the bill on Wednesday in a 64-33 vote. Days earlier, House Speaker Nancy Pelosi (D-California) said there would be bipartisan support for the bill to pass the House and pledged to send it to the Biden’s office as soon as possible. At the time, House Republican leaders planned to let their base vote their conscience on the bill.

However, after stunning news Wednesday night of an agreement between Sen. Joe Manchin III (DW.Va.) and Democratic leaders on a separate climate, health care and tax bill, House leaders GOP have urged members to oppose the flea bill in retaliation. , in an effort to deny Biden and Senate Majority Leader Charles E. Schumer (DN.Y.) a legislative victory.

Before the House GOP decided to oppose the chip bill, supporters of the legislation thought they could garner considerable support from Republicans, according to people familiar with the vote count who spoke under on condition of anonymity to discuss the matter freely. Rep. Michael McCaul (R-Tex.), the ranking Republican on the House Foreign Affairs Committee, told reporters he would still support the bill, calling it a national security issue.

Others, however, said they would toe the party line. Rep. Frank D. Lucas (R-Okla.), the senior GOP member on the House Science, Space, and Technology Committee, said he expected his remarks on the bill are very different “just 24 hours ago”. Lucas noted that he had worked on the chip funding legislation for more than three years and lamented that it was now “irrevocably tied to massive tax increases and spending sprees”, referring to the project. tax bill from the Democrats.

“Unfortunately, and it’s more regrettable than you can imagine, I will not be voting for the CHIPS and Science Act today,” Lucas said. “I want to emphasize that this in no way reflects my feelings about the transformational research policies contained in this bill.”

Some members of the Congressional Progressive Caucus were also disgusted with the bill — Sen. Bernie Sanders (I-Vt.) was publicly critical and voted against it Wednesday — and there were concerns that its passage in the House could be threatened if it supported by lawmakers has declined. Commerce Secretary Gina Raimondo met with the caucus virtually Thursday afternoon to provide reassurance about the guardrails included in the legislation.

According to two sources close to the meeting, Raimondo appealed to the liberals, stressing to the group that she understood their concerns and would use the tools at her disposal to ensure that the funding provided by the legislation was not used to enrich big corporations. businesses. She promised to invest in American jobs and minority-owned businesses instead, while telling liberals it was time to step up and support the president.

Raimondo has spent the last 24 hours working on the phones to ensure that significant GOP support is not lost after Senate Republicans tried to derail his passage, reminding lawmakers of the national security implications if it was not adopted on Thursday.

In the House on Thursday, Minority Leader Kevin McCarthy (R-Calif.) called the legislation a “$280 billion blank cheque” for the semiconductor industry, saying he is was always opposed. Rep. Guy Reschenthaler (R-Pa.) criticized the bill as one that would only benefit “one industry,” and several GOP lawmakers urged their colleagues to vote no.

Rep. Joseph Morelle (DN.Y.) countered by saying there were few industries that didn’t use semiconductor chips.

“Chips make everything work. So whether it’s your cell phone, your laptop, your automobile, it really isn’t question. Children’s toys contain fleas,” Morelle said. “And the thing is, we’ve lost our competitive advantage. … It’s not just one industry. It’s about every industry.

Later, Morelle read aloud from the House floor the praise for the legislation — from Senate Republicans who had voted to pass it the day before.

About $52 billion will go to microchip makers to encourage the construction of domestic semiconductor manufacturing plants – or “fabs” – to make the chips, which are used in a wide variety of products, including motor vehicles , mobile phones, medical equipment and military weapons. A shortage of semiconductor chips during the coronavirus pandemic has caused price hikes and supply chain disruptions across several industries.

The bill also includes about $100 billion in authorizations over five years for programs like expanding the work of the National Science Foundation and creating regional tech hubs to support start-ups in regions across the country. that haven’t traditionally attracted big tech funding.

During a White House meeting with business and labor leaders on Monday, Raimondo noted that the United States used to make 40% of the world’s chips, but now makes about 12% – and “essentially none state-of-the-art chips”, which come almost entirely from Taiwan.

The United States has invested “almost nothing” in semiconductor manufacturing, while China has invested $150 billion to build domestic capacity, Raimondo said. She also said it was essential that the United States be able to compete with countries that subsidize semiconductor companies to build factories.

“Chip funding will be the deciding factor as to where these companies choose to expand,” Raimondo said. “We want them, we need them, to grow here in the United States.”

The legislation includes provisions prohibiting companies from building most types of new semiconductor manufacturing facilities in China “or any other foreign country of concern” for a decade after receiving federal funding.

Paul Kane and Jeanne Whalen contributed to this report.

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