Senate Passes Bill to Bolster Computer Chip Manufacturing

Before passage, Senate Majority Leader Charles E. Schumer praised the bill as one of this Congress’ most consequential bipartisan achievements.

“After years of hard work, the Senate is passing the largest investment in science, technology and advanced manufacturing in decades,” Schumer said on the floor Wednesday. “This chips and science bill is going to create millions of good-paying jobs down the road. It will alleviate supply chains, it will help lower costs, and it will protect America’s national security interests.”

The Senate-passed bill includes $54 billion in five-year grants for manufacturing and design of semiconductors and 5G wireless deployment, $24 billion to create a 25 percent tax credit for new semiconductor manufacturing facilities through 2026 and funding authorizations to bolster U.S. scientific research.

The measures were once part of broader bills meant to help the U.S. compete on the global stage, particularly with China and its goal to become a world leader in semiconductor production. But after Senate Minority Leader Mitch McConnell halted conference negotiations to reconcile the bills over opposition to a separate legislative push by Democrats, senators moved to strip out and pass what they could by early August.

Commerce Secretary Gina M. Raimondo encouraged Congress to act by Aug. 4, saying incentives for chipmakers to build plants in the U.S. are critical as a matter of national security.

Seventeen Republicans joined Democrats in voting for the chips and science package. The only member of the Democratic caucus to vote against it was Sen. Bernie Sanders, I-Vt., who long opposed the legislation as a “blank check” for profitable computer chip companies like Intel Corp. and Micron Technology.

One of the Republicans who voted for the bill, Tennessee Sen. Bill Hagerty, had sought an amendment to fast-track the permitting process for companies building semiconductor plants. But he said he was instead promised that the House in the coming days would clear his Senate-passed bill that would also speed up permitting for other types of manufacturing the package is designed to spur.

Science additions

The bill gained hundreds of pages of science measures in the week before it passed, after Schumer tested and found GOP backing for pairing the legislation with chips-focused legislation.

The science provisions include a five-year $102 billion authorization for the National Science Foundation, Commerce Department and National Institutes of Standards and Technology to increase investments in research and development. If appropriators provide those authorized funds in the annual spending bills, it would represent a $52 billion increase over baseline funding.

The bulk of the five-year funding authorization, $81 billion, is for the NSF; $36 billion of that is on top of baseline funding, including $20 billion for a technology, innovation and partnerships directorate. The measure would also set aside 20 percent of the authorized NSF funds for 25 states and three territories that typically lack the population and financial resources to compete with bigger states for research dollars.

The $11 billion Commerce Department authorization, all of which is on top of baseline funding, includes $10 billion for regional technology hubs and $1 billion for a pilot program to provide economic development grants to persistently distressed communities. The $9 billion authorization for NIST, which would represent a $4 billion increase over baseline funding, is focused on boosting smaller manufacturers, shoring up the domestic supply chain and building education and workforce development programs.

The bill would also provide five-year funding authorizations for various Energy Department research and development programs and facility upgrades, including roughly $15 billion for basic energy sciences, around $7 billion each for advanced scientific computing and high-energy physics, roughly $6 billion for nuclear physics and nearly $5 billion for biological and environmental sciences, among others.

Finishing broader bill?

Schumer and senators from both parties who were involved in conference negotiations on the broader Senate and House competition bills have said they want to see that process play out so pieces left out of the current measure can still make it to Biden’s desk.

Schumer said Wednesday he intends to put a resulting package on the Senate floor in September.

“I’m going to finish the conference,” Senate Commerce Chair Maria Cantwell, D-Wash., who has led the conference negotiations, said. “Members really did put in a lot of time and energy on other pieces of this.”

For example, Cantwell said Senate Foreign Relations Chair Bob Menendez, D-N.J., and Jim Risch, R-Idaho, have “a very, very substantive Indo-Pacific agenda” they were working to include. The Senate Finance and House Ways and Means panels had also been working on resolving their different approaches to trade provisions.

“The trade provisions, the outbound investment provisions and so forth — those were the most difficult to negotiate, which is why they weren’t closed out, but I agree that we should give it a shot,” Indiana Sen. Todd Young, one of the lead Republican conferees, said.

Other GOP conferees also said they’d like to bring negotiations on the remaining provisions to a conclusion, but Senate Minority Whip John Thune, R-S.D., said he doubts there’d be enough support given that the science provisions added to this version “satisfied most of the interest out there.”

“A lot of stuff that got left out that originated in the House were things that were never going to make it through the Senate anyway,” Thune said.

———

(Kathleen Bever contributed to this report.)

___

©2022 CQ-Roll Call, Inc., All Rights Reserved. Visit cqrollcall.com. Distributed by Tribune Content Agency, LLC.