WASHINGTON – Leading Republicans are heating up the passage of a bill that provides nearly $ 52 billion in incentives for the semiconductor industry today that Sen. Joe Manchin of West Virginia dismissed the idea of imposing higher taxes on the wealthy and corporations as part of a separate Democratic -just effort.
Three weeks later, the computer chips bill looks like it could be problematic despite bipartisan support. That’s when Republican Senate leader Mitch McConnell said there would be no such bill as long as Democrats uphold what he called a “partisan reconciliation bill.” But Manchin’s decision to drastically crack down on Democratic efforts and eliminate tax increases appears to open a window for Republican cooperation on semiconductors.
Senator John Cornyn, R-Texas, who endorses McConnell’s approach, said on the Senate floor Monday that Manchin’s announcement of the taxes means “we’re in a posture where we can continue to fund chips and other relevant provisions. “
“I hope we can take action on that in the coming days,” Cornyn said.
The Biden administration forced Congress to act immediately on semiconductor legislation before they leave for their month-long recess in August. Commerce Secretary Gina Raimondo said chip makers are now making decisions on where they need to locate plants to keep up with global demand, and that foreign competitors are emerging from those companies with financial assistance.
“There’s nothing that can be done to protect the U.S. economy or national security with another fab or manufacturing facility located elsewhere around the world,” Cornyn said. “We need them here.”
The bill that comes to the Senate this week is even narrower than the law passed by both chambers in this Congress. The stripped scale includes $ 52 billion in financial incentives and research, plus $ 1.5 billion for a fund that will encourage competition from companies like Huawei to build 5G networks. The bill would also institute a 25% investment tax credit for investments in semiconductor manufacturing.
The legislation will also prohibit aid recipients from expanding or building new manufacturing plans for some advanced semiconductors in China or another foreign country of concern, according to a draft law that obtained from The Associated Press.
Senate Majority Leader Chuck Schumer told senators Monday that he wants lawmakers from the House and Senate to continue working on a broader bill to improve the U.S. semiconductor industry and scientific research, but for now , he plans to hold the first vote on the method on a narrower scale Tuesday. He said manufacturers “can’t wait forever.”
“Countless well-paying American jobs are on the line. Billions of dollars of economic activity are on the line. And as I said, our national security is at stake,” Schumer said.
The Biden administration has endorsed financial incentives for the computer chip industry as a way to create jobs in the U.S. while also easing long-term inflationary pressures on cars, computers and other high-tech. product that relies on computer chips.