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The Senate voted to advance a slimmed-down version of its bill designed to boost US semiconductor competition with China.
The bill cleared a significant procedural hurdle in a vote of 64-34 on Tuesday evening, while lawmakers worked to complete various sections of the law.
The bill, which would provide nearly $50 billion in subsidies to boost US computer chip manufacturing, is a multi-faceted bipartisan effort that combines the interests of several committees ranging from national security to economics.
The Senate’s procedural move on Tuesday paved the way for a final passage for the chamber later this week or early next week. The bill will travel to the House for passage before going to President Joe Biden’s desk for signature into law.
The broader purpose of the law is to encourage semiconductor production within the US to reduce dependence on Asia-based manufacturers.
Biden administration officials say a sizable domestic chip industry will help ease supply-chain disruptions that have hindered economic recovery from Covid-19 and separate the US from supply routes dominated by political rival China. have make.
Global shortages of chips over the past two years have affected many industries, including automakers, mobile phone and consumer technology companies, and manufacturers of defense systems.
Sen. John Cornyn, a Texas Republican and lead author of the Senate text, emphasized Economic implications of the law in a pair of Twitter posts Published Tuesday.
US Senator John Cornyn (R-TX) speaks to reporters at the US Capitol in Washington, DC.
John Cherry | Reuters
“If the US lost access to advanced semiconductors (none made in the US) in the first year, GDP could drop by 3.2 percent and we could lose 2.4 million jobs,” he wrote. “The loss to GDP will be 3X larger ($718B) than the estimated $240B of US GDP in 2021 due to ongoing chip shortages.”
Legislation before the Senate includes $52 billion to rebuild domestic chip production and tax breaks to encourage construction of plants based in US chip stocks, which stalled Tuesday ahead of an expected vote. Intel up 3.9%, NVIDIA 5.5% more Texas Instruments Up 3.1%, ahead of all broads S&P 500S 2.8% profit.
The procedural step forward comes more than a year after the Senate approved a $250 billion bill to bolster US chipmaking and bolster US research and development for the first time in a bipartisan vote.
But the House never considered that law after the Senate approved it in June 2021.
House Democrats drafted their own version of a Chinese Competition Act, with a gentler national security tone and greater emphasis on climate change funding. Republicans opposed the bill.
Democrats in both houses have spent months trying to settle differences between the two versions. But with annual inflation running above 9% and the party facing tough midterm elections, the Biden administration has suggested it approve a simpler bill aimed at ramping up chip production.
It is not certain whether Senate Democrats will be able to garner the 60 votes needed to stop a filibuster on the final legislation. To do so would require the support of many Republicans, who have lamented that much of their work would be tossed out to prepare provisions to compete with China.
Top Democrats, including New Jersey’s Foreign Relations Committee chairman Bob Menendez, have also condemned the diluted bill.
“We’re at a point now where I don’t think anyone really knows what the final bill might look like, or where the votes are,” Senate Republican Whip John Thune, RSD, told Politico last week. “We know where the votes were last time. But that was a different time and a different bill than what we’re talking about today.”
But Democrats have also run into new issues with Republicans who have threatened to derail the semiconductor bill if Majority Leader Chuck Schumer, D.N.Y., is to pass a party-line bill on taxes and climate policy. Let’s continue to pursue a different plan.
Other late-stage policy decisions could complicate matters further, including reducing tariffs on Chinese goods previously imposed by former President Donald Trump.