Senate passes $280B bill for manufacturing, tech
Bipartisan action addresses growing rivalry with China
WASHINGTON — The Senate on Wednesday passed an expansive $280 billion bill aimed at building up America’s manufacturing and technological edge to counter China, embracing in an overwhelming bipartisan vote the most significant government intervention in industrial policy in decades.
The legislation reflected a remarkable and rare consensus in an otherwise polarized Congress in favor of forging a long-term strategy to address the nation’s intensifying geopolitical rivalry with Beijing, centered around investing federal money into cutting-edge technologies and innovations to bolster the nation’s industrial, technological and military strength.
It passed on a lopsided bipartisan vote of 64-33, with 17 Republicans voting in support. The margin illustrated how commercial and military competition with Beijing — as well as the promise of thousands of new U.S. jobs — has dramatically shifted long-standing party orthodoxies, generating agreement among Republicans who once had eschewed government intervention in the markets and Democrats who had resisted showering big companies with federal largess.
“No country’s government — even a strong country like ours — can afford to sit on the sidelines,” said Sen. Chuck Schumer, D-N.Y. and the majority leader who helped to spearhead the measure. “I think it’s a sea change that will stay.”
The legislation will next be considered by the House, where it is expected to pass with some Republican support. President Joe Biden, who has backed the package for more than a year, could sign it into law this week.
The bill, a convergence of economic and national security policy, would provide $52 billion in subsidies and additional tax credits to companies that manufacture chips in the United States. It also would add $200 billion in scientific research, especially into artificial intelligence, robotics, quantum computing and a range of other technologies.
Its passage was the culmination of a yearslong effort that, in Schumer’s telling, began in the Senate gym in 2019, when he approached Sen. Todd Young, R-Ind., with the idea. Young, a fellow China hawk, had previously collaborated with Democrats on foreign policy.
In the end, it was made possible only by an unlikely confluence of factors: a pandemic that laid bare the costs of a global semiconductor shortage, heavy lobbying from the chip industry, Young’s persistence in urging his colleagues to break with party orthodoxy and support the bill, and Schumer’s ascension to the top job in the Senate.
Many senators, including Republicans, saw the legislation as a critical step to strengthen America’s semiconductor manufacturing abilities at a time when the nation has become perilously reliant on foreign countries — especially an increasingly vulnerable Taiwan — for advanced chips.
A phalanx of former President Donald Trump’s national security advisers, from H.R. McMaster to Mike Pompeo, came out in support of the legislation, helping Republican lawmakers make the argument that voting for the bill would be a sufficiently hawkish move.
Schumer said it had been not too difficult to rally votes
from Democrats, who tend to be less averse to government spending. “But to their credit, 17 Republicans, including McConnell, came in and said, ‘This is one expenditure we should make,’ ” Schumer said, referring to Sen. Mitch McConnell, R-Ky., and the Senate minority leader.
The legislation, which was known in Washington by an ever-changing carousel of lofty-sounding names, has defied easy definition. At more than 1,000 pages long, it is at once a research and development bill, a nearterm
and long-term jobs bill, a manufacturing bill and a semiconductors bill.
Enactment of the legislation is considered a critical step to strengthening America’s semiconductor abilities at a time when the share of modern manufacturing capacity in the United States has plummeted to 12%. That has left the nation increasingly reliant on foreign countries amid a chip shortage that has sent shock waves through the global supply chain.
The subsidies for chip companies were expected
to immediately produce tens of thousands of jobs, with manufacturers pledging to build new factories or expand existing plants in Arizona, Idaho, New York, Ohio and Texas.
The bill also seeks to create research and development and manufacturing jobs in the long run, with provisions aimed at building up pipelines of workers — through workforce development grants and other programs — concentrated in once-booming industrial hubs hollowed out by corporate offshoring.