Senate Advances Key Legislation Addressing US Competition With China

The U.S. Senate passed the CHIPs bill by a vote of 64-33 Wednesday, advancing legislation that lawmakers on both sides of the aisle say will be key in addressing U.S. economic competition with China.

The $280 billion bill provides $52 billion in grants and incentives to domestic producers of semiconductors, a key element in a wide range of products that require microchips but that are often manufactured abroad.

“Today is a very good day for the American people into the future of our country. I believe firmly that when signed into law, this bill will reawaken the spirit of discovery and innovation that made America the envy of the world,” Senate Majority Leader Chuck Schumer said Wednesday ahead of the final vote.

The bill will also provide $200 billion in funding for scientific research over the next 10 years.

“No longer will America always ever be dependent on something offshore that was created here, made in America, invented here. And we will again have the jobs here,” House Speaker Nancy Pelosi said last week while meeting with United Auto Workers in the midwestern manufacturing state of Michigan.

The CHIPs bill is a bipartisan compromise after lawmakers spent nearly a year and a half trying to reach an agreement on much more ambitious legislation addressing U.S. competition with China. Senator Mark Warner, chairman of the Senate Intelligence Committee, said Wednesday’s vote was a good start to address strategic competition overseas.

“This funding sends a message that the U.S. is putting a strong down payment on maintaining our edge in the global technology race — and preventing global supply chains from being weaponized against us or our allies. Over the past few years, China has continued to increase investments in its domestic industries — and particularly in areas that confer long-term strategic influence,” Warner said on the Senate floor Tuesday.

With many Americans concerned about a weak economy and rising inflation, some conservatives criticized the cost of the bill that is projected to add $79 billion to America’s national debt over the next decade. Senator Bernie Sanders, who usually votes with Democrats, said this funding benefits wealthy corporations.

“The crisis is caused by the industry shutting down in America and moving abroad. And today what we are doing is say we are going to give you a blank check to undo the damage that you did,” Sanders, an independent, said on the Senate floor Tuesday.

In a written statement Wednesday, Republican Senator Marco Rubio said the version of legislation that passed removed important safeguards on the funding.

“We need to support American production of semiconductors, but we need to do it in a way that benefits our country and our workers. Corporate interests stripped meaningful safeguards from this package and blocked consideration of others,” Rubio said. “No one should be surprised when we hear stories of Beijing stealing U.S. technology funded by this bill or companies producing more chips in China even as they receive money from the taxpayers.”

But ultimately 17 Republicans voted for the funding, citing concerns about U.S. strategic competition with China.   

“This is about national security, and about making sure we have adequate supply here at home of things that are absolutely indispensable. I wish that were inexpensive, but in this particular situation, it’s not,” Senate Minority Leader Mitch McConnell told reporters Tuesday.

President Joe Biden is expected to sign the bill into law in the next week, after the House votes on the legislation before leaving for their six-week summer recess.

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