Senate passes computer chips bill to be more competitive with China

The legislation passed on a bipartisan basis

The Senate passed legislation to support research and development in the computer chips and semiconductor industry, with nearly every Democrat voting for the legislation and a large number of Republicans joining them. The bill’s passage tees up a vote in the House of Representatives.

The legislation is meant to support manufacturing of semiconductor chips in the United States as a means for the US to compete with China and create jobs. Every Democratic senator voted for the legislation except for Senator Bernie Sanders, an Independent from Vermont who caucuses with Democrats, while 17 Republicans voted for the legislation. Democratic Senator Joe Manchin of West Virginia and Republican Senator Lisa Murkowski of Alaska did not vote because they recently tested positive for Covid-19.

Senator Mark Kelly, a Democrat from Arizona who is running for reelection, said the legislation was important to provide relief for American families, but added that it was also a national security imperative.

“If you purcharsed a car, a new or used car recently, you would know the cost is just prohibitive for a lot of families,” he said. “And the price of anything that has a semiconductor chip in it has gone up a lot. Will help bring down those but also, it’s incredibly important for our national security. We cannot rely on other countries for the most advanced microelectronics and the best semiconductor chips are not made in the US anymore.”

But Senator Maria Cantwell, who is chairwoman of the Senate Commerce, Science and Transportation Committee, said the nature of the legislation was not just important; the fact that it could pass on a bipartisan basis mattered as well.

“I think a lot of people around the world were thinking with the insurrection this group can't get it together. And they're like, what's America these days,” she said. “So this issue is about coming together to show that we wanted to make a major investment in our R&D capabilities on a national level.”

House Speaker Nancy Pelosi praised the package and the fact many aspects of the version House Democrats passed remained in the bil.

“The House Rules Committee will meet shortly to take up the CHIPS and Science Act,” she said in a statement. Then, the House will proudly pass this essential legislation and send it to President Biden to be signed into law.”

Numerous Republicans, such as Senator Todd Young of Indiana, said that the legislation was a top priority and praised the Senate’s passage. Mr Young said in remarks before the vote that it was specifically important because it would lead to a technology hub in Indiana.

The legislation would provide for $54.2bn to support the computer chips industry in the United States – including $39bn in financial assistance to modernise facilities for chips manufacturing – along with $11bn for research and development through the Department of Commerce; $200m would go to supporting a new workforce, and $2bn for a defence fund.

The House and Senate had passed two different versions of the legislation, and there were significant points of disagreement. Senate Minority Leader Mitch McConnell initially threatened that the legislation would die if Democrats passed their social spending bill.

But Mr Manchin rebuffed Mr McConnell’s threats. Other Republicans emphasised the need to pass the legislation. Senator Rob Portman of Ohio warned on Wednesday that companies were already thinking of making the facilities where chips would be manufactured elsewhere.

“We have a commitment from Intel, but if the bill doesn't pass they may well go somewhere else first. Germany is offering them a good incentive package already. Asian countries all have incentive packages, so we need to act before they choose to move somewhere else.”

But some Republicans objected to the legislation.

“We're not in a situation right now where we need to be spending all this money on something that is necessary but we've got we've got companies that are moving in right now in the United States bill in chips,” Senator Tommy Tuberville of Alabama said. “All we're doing is we're giving more money to people to say that we're helping them out.”