The House voted 243-187 to pass a $280 billion bill Thursday to fund domestic semiconductor chip manufacturing and boost competitiveness with China.
Twenty-four Republicans joined all 218 Democrats in voting to advance the bill, even though House GOP leadership whipped against it in frustration after Sen. Joe Manchin announced a deal on a separate party-line reconciliation bill.
One Democrat, Rep. Sarah Jacobs of California, voted present. Her family founded semiconductor company Qualcomm.
The vote came one day after the Senate in a 64-33 vote advanced the bill, known as CHIPS-plus, that has been in the works for over a year.
Biden, meanwhile, interrupted a meeting with CEOS after being handed a note that said the House had enough votes to pass the CHIPS bill, ‘Been trying a long time,’ he said with a smile. Those in the room applauded.
House Speaker Nancy Pelosi was a strong advocate of the bill – her husband Paul
The package includes $52 billion in funding for U.S. companies to produce computer chips as well as a 25 percent tax credit for companies who invest in the market. It includes $39 billion for chip manufacturing companies to expand and modernize their technologies and $11 billion for the Commerce Department for research and development. It includes another $81 billion for the National Science Foundation.
Biden smiles as he was passed a note saying that the CHIPS-plus bill has passed the House during a meeting with CEOs about the economy
All of Speaker Nancy Pelosi’s Democrats voted in favor of the bill, minus one who voted present
The Senate voted to pass the CHIPS bill on Wednesday
Lawmakers hope to have the bill on President Biden’s desk for signing by early August. Biden celebrated the bill Wednesday as a way to ‘lower costs and create jobs.’
‘As Americans are worried about the state of the economy and the cost of living, the CHIPS bill is one answer … lowering prices on everything from cars to dish washers.’
‘It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security.’
‘We will look back on history and say this was a time when America really realized its responsibility to stay the leading economic and national security power in the world,’ Sen. Majority Leader Chuck Schumer, who led negotiations on the bill, said. ‘It’s a very, very significant bill.’
The bill garnered support from 17 Republicans, including Sen. Minority Leader Mitch McConnell, R-Ky., and members of his leadership team, including GOP Policy Committee chairman Sen. Roy Blunt, R-Mo., and Sens. John Cornyn, R-Texas and Rob Portman, R-Ohio.
Biden on Tuesday warned that China was ‘moving ahead’ of the U.S. in chip manufacturing, as he said that the U.S. relies on Taiwan for imports while China encroaches on the island democracy. He said the CHIPS bill was a ‘national security imperative’ as he claimed that one-third of ‘core’ inflation was due to the high cost of vehicles, which require such chips for production.
Opponents have criticized the industry tax breaks as an excessive subsidy for big tech firms.
Vermont Sen. Bernie Sanders voted against the bill. Sens. Joe Manchin, D-W.Va., and Lisa Murkowski, R-Alaska, didn’t vote after announcing they tested positive for covid and Sen. Pat Leahy, D-Vt., did not vote as he is recovering from surgery.
Pandemic-induced supply chain snags have underscored just how reliant the U.S. is on foreign imports for the chips that are used in cars, computers, appliances and weapons systems.
Each Javelin missile launching system contains hundreds of semiconductors, leading Defense officials to worry a shortage could affect the nation’s arms capabilities.
Continued reliance on overseas conductors would be ‘flat-out dangerous, and a disruption to our chip supply would be catastrophic,’ national security advisorJake Sullivan said during a meeting with Biden on Monday.
‘America invented the semiconductor. It’s time to bring it home,’ Biden said.
Commerce Secretary Gina Raimondo told him that chip manufacturers are finalizing investment plans and that money provided through the bill will be instrumental in their decision.
‘We know they will expand, because they have to in order to meet demand. There´s no question about that,’ Raimondo told Biden. ‘The question is, where will they expand? And we want them, we need them to expand here in the United States.’
The leaders of Medtronic, a medical device maker, as well as Cummins Inc. and defense contractor Lockheed Martin, pitched the president on the need for the bill as well.
‘Like others at the table, we are facing a supply chain crisis. We are unable to get the components we need and semiconductors is always at the top of the list,’ said Tom Linebarger, chairman and CEO of Cummins Inc., which makes diesel engines.
Linebarger said the company is now paying brokers as much as 10 times the regular cost to get the computer chips it needs. The federal government’s investments through the bill would move manufactures from ‘wringing our hands about where we sit in competition with others to actually moving onto the field and helping U.S. manufacturers compete,’ he said.
Overall, the bill would increase U.S. deficits by about $79 billion over the next 10 years, according to the Congressional Budget Office. The bill also authorizes about $200 billion to advance high-tech research in the U.S. over the coming decade. Congress must approve that funding as part of future spending bills and the CBO did not include that research money in its deficit projection.
Critics have likened the spending to ‘corporate welfare’ and have said the money would be better spent on other priorities or not at all. Sen. Bernie Sanders, I-Vt., said he doesn´t hear from people about the need to help the semiconductor industry. Voters talk to him about climate change, gun safety, preserving a woman´s right to an abortion and boosting Social Security benefits, to name just a few.
‘Not too many people that I can recall – I have been all over this country – say: `Bernie, you go back there and you get the job done, and you give enormously profitable corporations, which pay outrageous compensation packages to their CEOs, billions and billions of dollars in corporate welfare,´’ Sanders said.