The Sentinel-Record

Dems stress national security as computer chips bill stalls

- KEVIN FREKING

WASHINGTON — The Biden administra­tion and congressio­nal Democrats are warning of dire ramificati­ons for the economy and for national security if Congress fails to pass a bill by the end of July that is designed to boost semiconduc­tor manufactur­ing in the United States.

Their appeals have grown increasing­ly urgent as Senate Republican­s led by Mitch McConnell threaten to block the computer chips legislatio­n, creating a standoff that threatens to derail one of the biggest bipartisan initiative­s in Congress. Republican­s have tied their cooperatio­n to Democrats not moving forward with a separate package of energy and economic initiative­s that GOP lawmakers warn would increase taxes on small businesses and hurt the economy. It’s a demand that Democrats dismiss out of hand.

Commerce Secretary Gina Raimondo said computer chipmakers are being offered lucrative incentives from other countries such as South Korea, Japan, France, Germany and Singapore to locate plants there. She cited Monday’s announceme­nt by STMicroele­ctronics and GlobalFoun­dries to build a semiconduc­tor factory in France as an example of other countries moving faster than the U.S. on the issue.

“Bottom line is there are very real, very devastatin­g consequenc­es if Congress doesn’t do its job in the month of July,” Raimondo told The Associated Press.

Those consequenc­es mean not only lost job opportunit­ies for the U.S., but an overdepend­ency on other nations for semiconduc­tors that could become a critical vulnerabil­ity because they are so important for products ranging from cars and cellphones to modern weapons systems.

Raimondo was to be part of a closed-door briefing with senators Wednesday to discuss the national security implicatio­ns of the semiconduc­tor legislatio­n. Set to join her were Deputy Defense Secretary Kathleen Hicks and Director of National Intelligen­ce Avril Haines.

McConnell did not respond to questions from reporters after attending the briefing.

Sen. Ron Wyden, D-Ore., said it underscore­d that Congress needs to act soon.

“The legislatio­n we’re trying to pass is a major national security issue. It is a major economic issue, and it is one where you cannot afford to delay,” Wyden said.

Raimondo and Secretary of Defense Lloyd Austin, in a letter to congressio­nal leaders, said semiconduc­tor companies need to get “concrete in the ground” by this fall to meet increased demand. The Cabinet members said it was their assessment that further delays in passing the legislatio­n will “result in a deficit of semiconduc­tor investment from which we may not be able to recover.”

Both chambers of Congress have passed bills that include about $52 billion in financial support for the U.S. semiconduc­tor industry, but they are struggling to merge the legislatio­n into a final compromise that could gain 60 votes in the Senate, the number needed to overcome procedural hurdles.

McConnell, R-Ky., on Tuesday suggested the House could work from the Senate-passed version, which would allow it to move to President Joe Biden’s desk to be signed into law. Or the two chambers could just take up a much narrower bill focused on semiconduc­tor incentives, leaving out provisions on trade and new research priorities.

Both options face major hurdles. Maryland Rep. Steny Hoyer, the House majority leader, said McConnell’s call for the House to go with the Senate bill was “an arrogant, unreasonab­le demand.” Meanwhile, senators from both parties are wary of settling for the $52 billion in financial incentives after working for years on other priorities in the bill.

“It’s just that there’s too many other things that we worked so hard on. Why would we cut that down?” said Sen. Tim Kaine, D-Va. “If it’s about being truly competitiv­e, why would we say we just want to be a little competitiv­e.”

Sen. Charles Grassley, R-Iowa, said he could support legislatio­n just focused on the financial incentives, “but it’s got problems with other members of the conference” who are insisting on additional provisions.

Democrats have blown past their goal of reaching agreement on principles of the final bill by the end of June so that staff could prepare text and the two chambers could vote in July.

Raimondo said she had been speaking with several Republican­s on narrowing difference­s between the House and Senate before McConnell tweeted about the bill, known by the acronym USICA, for United States Innovation and Competitio­n Act: “Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconcilia­tion bill.”

“Obviously, Senator McConnell’s tweet a couple of Friday’s ago has slowed down work,” Raimondo said.

Still, she said she considers the bill at the “5-yard line” and that negotiator­s could finish within a week to 10 days if both parties cooperated. She said if lawmakers cannot get the bill completed, “it’s not Republican­s who win. China wins if this doesn’t get passed.”

Raimondo is trying to appeal to lawmakers’ concerns about how the U.S. depends upon foreign countries, namely Taiwan, for the production of advanced computer chips.

“Look, I mean, I know a lot of these Republican­s. They’re patriots. They want to do the right thing for America. They’re scared that we’re so dependent on Taiwan for exactly the kind of chips our military depends on,” Raimondo said.

Sen. Thom Tillis, R-N.C., was one of the Republican­s who voted for the Senate’s version of the semiconduc­tor legislatio­n. Before he makes a decision on a final compromise bill, he wants to see the price tag of the separate energy and economic package that Democrats are pursuing through a process called reconcilia­tion, which would allow them to pass a bill without any Republican support.

Tillis also isn’t buying the warning that lawmakers need to pass a semiconduc­tor bill this month or it may not happen at all.

“This isn’t the only vehicle that chips could ride on before the end of the year,” Tillis said.

 ?? The Associated Press ?? U.S. Secretary of Commerce Gina Raimondo speaks during a March 15 address at Brown University in Providence, R.I. The Biden administra­tion and congressio­nal Democrats are warning of dire ramificati­ons for the economy and for national security if Congress fails to pass a bill by the end of July that is designed to boost semiconduc­tor manufactur­ing in the United States. Raimondo says computer chip makers are being offered lucrative incentives from other countries such as South Korea, Japan, France, Germany and Singapore to locate plants there.
The Associated Press U.S. Secretary of Commerce Gina Raimondo speaks during a March 15 address at Brown University in Providence, R.I. The Biden administra­tion and congressio­nal Democrats are warning of dire ramificati­ons for the economy and for national security if Congress fails to pass a bill by the end of July that is designed to boost semiconduc­tor manufactur­ing in the United States. Raimondo says computer chip makers are being offered lucrative incentives from other countries such as South Korea, Japan, France, Germany and Singapore to locate plants there.

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