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Congress OKs bill to aid computer chip firms, counter China

WASHINGTON (AP) – The House on Thursday passed a $280 billion package to boost the semiconductor industry and scientific research in a bid to create more high-tech jobs in the United States and help make it better. to compete with international rivals, namely China.

The House approved the bill by a strong margin of 243-187, sending the measure to President Joe Biden to be signed into law and giving the White House a major victory on domestic policy. Twenty-four Republicans voted for the law.

“Today, the House passed a bill that will make cars more affordable, appliances more affordable, and computers more affordable,” Biden said. “It will lower the cost of everyday goods. And it will create high-paying manufacturing jobs across the country and strengthen US leadership in future industries at the same time.”

While the vote was taking place, Biden discussed the economy with CEOs in the White House. During the event, he was given a letter informing him that the bill would be passed – a development that produced a round of applause before the tally was finished.

Republicans argued that the government should not spend billions to subsidize the semiconductor industry and the House GOP leadership recommended a vote against the bill, telling members that the plan would provide too many subsidies. and tax credits “in a specific industry that do not require additional government handouts.”

Rep. Guy Reschenthaler, R-Pa., said the way to help the industry is through tax cuts and easing federal regulations, “not by picking winners and losers” with subsidies – a method that Rep. Joseph Morelle, DN.Y. , said it was too narrow.

“It affects every industry in the United States,” Morelle said. “Take, for example, General Motors announcing that they have 95,000 cars waiting for chips. So, you want to increase the supply of goods to people and help lower inflation? It’s about increasing the supply of goods throughout the United States in every industry.”

Some Republicans see the passage of the law as important for national security. Rep. Michael McCaul, the top Republican on the House Foreign Affairs Committee, said it was critical to protect US semiconductor capacity and that the country was too dependent on Taiwan for the most advanced chips. That could be a major vulnerability if China tries to seize the self-ruled island that Beijing views as a breakaway province.

“I have a unique insight into this. I got the classified briefing. Not all members do,” McCaul said. “It’s very important for our national security.”

The bill provides more than $52 billion in grants and other incentives for the semiconductor industry as well as a 25% tax credit for companies that invest in US chip plants. more than 10 years, according to the Congressional Budget Office.

CBO also projects that the bill will increase deficits by about $79 billion over the next decade.

A late move in the Senate — the advance announced Wednesday night by Democrats on a $739 billion health and climate change package — threatened to make it even harder for those supporters to get the semiconductor bill across the finish line, based on concerns about government spending that GOP lawmakers say will fuel inflation.

Rep. Frank Lucas, R-Okla., said he was “disgusted” by the turn of events.

Despite bipartisan support for research initiatives, “sadly, and sadder than you can imagine, I will not be voting for CHIPS and the Science Act today,” Lucas said.

Rep. Kevin McCarthy, the Republican leader of the House, likened the spending bill to “corporate benefits that will be given to whoever President Biden wants.”

Leading up to the vote, it was unclear whether any House Democrats would join Sen. Bernie Sanders, I-Vt., to vote against the bill; in the end, no one did.

Commerce Secretary Gina Raimondo spoke to several of the most progressive members of the Democratic caucus in a meeting before the vote, stressing that the proposal is a critical part of the president’s agenda and that Democrats must work for him at this important moment.

Some Republicans criticized the bill as not being tough enough on China, and GOP leaders emphasized that point in recommending a “no” vote. Their guidance acknowledged the threat China poses to US supply chains, but said the package “does not effectively address this significant challenge.”

But, as McCaul pointed out, China opposes the move and is working against it. The bill includes a provision that prohibits any semiconductor company that receives financial assistance through the bill from supporting the production of advanced chips in China.

Zhao Lijian, a spokesman for China’s foreign ministry, commenting before the House vote, said the US “should not put up obstacles for normal science, technology and people-to-people exchanges and cooperation ” and “there is no need to take away or damage it. China’s legitimate rights to development.”


Associated Press video producer Liu Zheng in Beijing and AP writer Zeke Miller contributed to this report.

Copyright 2022 The Associated Press. All rights reserved.

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