“This place is the land of missed opportunities,” lamented Sen. Todd Young (R-Ind.), who has spent nearly two years on the larger effort to boost U.S. competition with China.
A frantic push by the Biden administration led lawmakers to suspend cross-Capitol negotiations on a more comprehensive China competition bill, instead pursuing the chips funding as well as a few other non-controversial provisions already settled in the talks. That was viewed by proponents of action as the more pragmatic option, given the White House’s recent warnings that U.S. companies are on the verge of taking their chip production overseas.
The final package, as outlined by Speaker Nancy Pelosi in a Wednesday letter to her caucus, will include technology and research provisions, too. Pelosi is eyeing floor consideration of the measure next week, suggesting the Senate may be able to clear it within days.
Dropped from the bill, however, were popular provisions aimed at cracking down on China’s coercive economic practices, not to mention the Senate Foreign Relations Committee’s entire contribution to the initial competition package — a sprawling bipartisan effort that got near-unanimous support on the panel.
“We worked very hard to get a bill out of the Senate. We got overwhelming votes for it, and then when we got to the House, we hit a brick wall,” Foreign Relations Committee Chair Bob Menendez (D-N.J.) said in an interview. “It’s a shame. Because it’s [now] a chips bill, not a China bill.”
The centerpiece of the emerging legislation, which senators formally kicked off on Tuesday, is a $52 billion investment in semiconductor manufacturing subsidies, plus tax credits and funding to spur scientific research. While significant, it’s a far cry from what was initially envisioned as a historic bipartisan effort to crack down on China and re-orient U.S. policy in the Indo-Pacific — a long-running priority for Senate Majority Leader Chuck Schumer.
Lawmakers’ frustrations over that fizzling on China stem largely from the House’s failure to act on the larger competition bill last year when the Senate first passed it. Many Democrats are privately grumbling at the White House, too, for not pushing the House to act sooner on the broader legislation and thus establishing cross-Capitol negotiations months earlier.
Instead, the Biden administration this month began warning Congress that it was out of time. Commerce Secretary Gina Raimondo has led that Capitol Hill blitz, calling on lawmakers to send President Joe Biden legislation addressing the semiconductor shortage and encouraging U.S. companies to boost semiconductor production at home — instead of turning to foreign countries.
But in public, Democrats like Menendez are holding off on hitting Biden hard and directing ire at Senate Minority Leader Mitch McConnell, who threatened to tank the China push altogether if Democrats continued pursuing a party-line health care and climate bill.
Young acknowledged that “there is an urgency to act” now on the computer chips subsidies instead of waiting for long-stalled bicameral talks on the broader legislation to wrap up. Those negotiations fell victim to immediate sprawl; dozens of lawmakers got involved, representing committees with jurisdiction over everything from foreign policy to trade to science investments.
“It got to a point where it became large and unwieldy,” said Rep. Earl Blumenauer (D-Ore.), who chairs the House Ways and Means Committee’s trade subpanel.
Senators insisted that moving forward this week without the robust China strategy provisions doesn’t mean the entire effort is dead. They vowed to continue talking with the House to reach a separate agreement on that front and pass it through both chambers before the end of the year.
Senate Intelligence Committee Chair Mark Warner (D-Va.) predicted that Schumer and other leaders would commit to “a conference report potentially voted on in…
Read More: How Congress’ dream of a China confrontation got gutted