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China competitiveness computer chip bill passes Senate, goes to House

President Joe Biden listens as President Christopher Shelton addresses the Communications Workers of America during a virtual meeting on the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act, in the South Court Auditorium of the White House on July 25, 2022 in Washington , DC .

Anna Moneymaker | Getty Images

The Senate on Wednesday passed bipartisan legislation aimed at helping the US compete with China by injecting tens of billions of dollars into domestic production of semiconductor chips.

The bill, known as CHIPS-plus or Chips and Science Act, was passed by a 64-33 vote. It now heads to the House, where lawmakers hope to pass it and send it to the White House for President Joe Biden’s signature before Congress leaves town in early August.

House Speaker Nancy Pelosi, D-Calif., said the chip bill was “a huge victory for American families and the American economy” when it passed a key Senate vote in early July.

The package includes more than $52 billion for US companies that make computer chips, as well as tax credits to encourage investment in chip manufacturing. It also provides funding to encourage innovation and development of other technologies in the US.

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Advocates say it’s vital to America’s economy and national security to make more chips, which are increasingly critical components of everyday household items like consumer electronics and cars because technological innovation is making machines smarter.

But the chips have recently been in short supply, following a sudden change in consumer demand related to the Covid-19 pandemic. And the US share of global chip production has fallen sharply in recent decades, while China and other countries have invested heavily in the industry.

The U.S. also makes very little of the most advanced types of semiconductors, most of which are made in Taiwan, the center of rising political tensions with China.

Much modern warfare is powered by an array of semiconductors — each Javelin missile launch system has hundreds, for example — leading U.S. defense officials to worry about the country’s reliance on foreign producers for chip supplies. this.

America’s continued reliance on overseas semiconductors is “flat-out dangerous, and the disruption of our chip supply would be catastrophic,” national security advisor Jake Sullivan said Monday in a meeting with Biden.

“The longer we wait, the more dangerous the disruption,” he said.

The president, during that meeting, also blamed the lack of chips for the high inflation that plagued his presidency. The lack of chips available for new car manufacturing is linked to rising prices of used cars, which drives up inflation.

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

In a statement after Wednesday’s vote, Biden called CHIPS-plus “a historic bill that will lower costs and create jobs.” It will also lead to “stronger American supply chains, so we’re not dependent on foreign countries for the critical technologies we need for American consumers and national security,” he said. Biden.

CHIPS-plus is a pared-down version of broader legislation that has been brewing in the House and Senate for some time. A larger measure was threatened from the Republican leadership earlier this month. The thinner bill cleared the 60-vote filibuster threshold in the Senate on Tuesday, setting up a shoe-in final vote, which only requires a simple majority in the 100-seat chamber.

The legislation has faced criticism from some Senate Republicans, such as Marco Rubio of Florida, who say it lacks “guardrails” to prevent any funds from slipping into Chinese hands. Some critics argue that the US needs to spend billions more to have a real chance of competing with the world’s leading chipmakers.

Sen. Bernie Sanders, I-Vt., also came out earlier this month against a previous version of the bill, calling it a “$53 billion blank check to profitable microchip and semiconductor companies.”

“We’re going to rebuild the US microchip industry,” Sanders said before Wednesday’s vote, “but we’re going to do it in a way that benefits all of our society, not just a few wealthy, profitable corporations. “

But Senate Majority Leader Chuck Schumer, DN.Y., argued Wednesday morning that the legislation would mark “a turning point for American leadership in the 21st Century.”

“By approving one of the largest investments in science, technology and manufacturing in decades … we are saying that America’s best years are yet to come,” Schumer said on the Senate floor at left the last vote.

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