By KEVIN FREKING, Associated Press
WASHINGTON (AP) – Calling semiconductors the “building blocks for the modern economy,” President Joe Biden on Monday asked Congress to act quickly and send him a bipartisan bill designed to boost the computer industry. chips and high-tech research in the United States.
The Senate was originally expected to hold a critical vote tonight to advance the legislation, but Senate Majority Leader Chuck Schumer, D-N.Y., announced that storms on the East Coast have disrupted travel plans for several senators. and that he would delay the vote until Tuesday morning. The bill needs support from at least 60 senators to clear procedural hurdles and put it on a path to final passage later this week, giving Biden a signature legislative victory he said administration needed to protect national security and help the US better compete with China. .
The bill provides about $52 billion in grants and other incentives for the semiconductor industry as well as a 25% tax credit for companies that build chip plants in the US. dollars to attract manufacturers.
The pandemic has highlighted how much the United States relies on semiconductor manufacturers abroad to supply the chips used in cars, computers, appliances and weapons systems. The Biden administration has warned lawmakers that they need to act before leaving for their August recess to ensure that companies invest in US fabs instead of building plants elsewhere.
Biden, who is still recovering from COVID-19, held a virtual roundtable with members of his administration and industry leaders about the bill’s merits. He said that the lack of semiconductors is the main driver of the increase in the cost of cars, which is a core part of the inflation that grips the country.
Biden said that the US relies on Taiwan for the production of the most advanced chips and that China has also begun to overtake the US in the production of such chips.
“America invented the semiconductor. It’s time to bring it home,” Biden said.
Commerce Secretary Gina Raimondo told him that chip manufacturers are finalizing investment plans and that the money provided by the bill will be instrumental in their decision.
“We know they’re going to expand, because they have to to meet the demand. There’s no question about that,” Raimondo told Biden. “The question is, where do they expand? And we want them, we need them to expand here in the United States.”
Leaders at Medtronic, a medical device maker, as well as Cummins Inc. and defense contractor Lockheed Martin, also pressed the president on the need for the bill.
“Like everyone else on the table, we’re facing a supply chain crisis. We can’t get the components we need and semiconductors are always at the top of the list,” said Tom Linebarger, chairman and CEO. of Cummins Inc., which makes diesel engines.
Linebarger said the company now pays brokers up to 10 times the regular cost to get the computer chips it needs. The federal government’s investments through the bill will move manufacturers from “holding our hands where we sit in competition with others to actually moving the field and helping U.S. manufacturers compete,” he said. .
In total, the bill would increase US deficits by about $79 billion over the next 10 years, according to the Congressional Budget Office. The bill also authorizes about $200 billion to advance high-tech research in the US over the next decade. Congress must approve that funding as part of future spending bills and CBO does not include that research money in its deficit projections.
Critics liken the spending to “corporate welfare” and say the money is better spent on other priorities or not at all. Sen. Bernie Sanders, I-Vt., said he did not hear from people about the need to help The semiconductor industry. Voters told him about climate change, gun safety, preserving the right of a women on abortion and increasing Social Security benefits, to name just a few.
“Not too many people that I can remember – I’ve been all over the country – said: ‘Bernie, you go back there and you’re going to get the job done, and you’re giving a lot of profit to corporations, who are paying a lot of money. compensation package for their CEOs, billions and billions of dollars in corporate benefits,’” Sanders said.
Once the Senate acts, the bill will go to the House. The window to pass the bill narrows if some progressives join Sanders and if most Republicans line up in opposition based on fiscal concerns. But House Speaker Nancy Pelosi, D-Calif., said she is confident it will have enough support to pass before lawmakers leave Washington for the August recess.
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