The Washington Post
Bill that Senate has approved would be massive investment in competitiveness
The Senate on Tuesday passed a major bill to address U.S. competitiveness with China, which would allocate billions to technology research and the semiconductor industry.
Lawmakers adopted the U.S. Innovation and Competition Act on a rare bipartisan 68-to-32 vote that signaled lawmakers from both parties are willing to work together to address China’s rising technological prowess, even in a bitterly divided Capitol. The action comes after U.S. tech executives have repeatedly warned lawmakers of the rising competitive threat from China and called for greater federal investment in researching artificial intelligence and other emerging technologies.
“I have watched China take advantage of us in ways legal and illegal over the years,” Senate Majority Leader Charles E. Schumer (D-N.Y.), the lead author of the bill, told my colleague Tony Romm in an interview before its passage.
“The number one thing China was doing to take advantage of us . . . was investing heavily in research and science. And if we didn’t do something about it, they would become the number one economy in the world.”
The wide-ranging $250 billion package could have significant implications for tech companies.
Silicon Valley is rapidly transforming amid the pandemic. The proposed funding could help address some of the challenges the industry has faced and accelerate the spread of tech investment beyond the Bay Area. The legislation would:
Invest more than $50 billion in chip manufacturing.
Many companies source semiconductors from China, and this bill could be a boon to U.S. semiconductor companies. The funding comes as a global chip shortage is vexing U.S. businesses, from automakers to dog washers. The shortage was caused by soaring demand, coupled with disruptions in the supply chain related to the pandemic.
Create a new Directorate of Technology and Innovation at the National Science Foundation.
The directorate will focus on funding research in artificial intelligence and quantum science. The funding could address long-running concerns in the tech industry about the lack of U.S.
government investment in emerging technologies.
Create a regional tech hub program. The legislation authorizes $10 billion in funding to ensure that U.S. tech development and research is disbursed throughout the country, and not just concentrated in a handful of coastal cities. The funding comes as tech companies and workers are grappling with the future of
work and, in some instances, considering moving to smaller cities outside major tech hubs like San Francisco and Seattle.
Add $10 billion for a lunar landing program. The bill seeks to boost funding for space exploration, increasingly a focus of China. But some lawmakers raised concerns about the potential for the bill to benefit Blue Origin, the space company founded by Amazon founder Jeff
Bezos, who owns The Washington Post. Sen. Bernie Sanders (I-VT.) sought to remove the funding, calling it a “Bezos bailout.” But the funding was included in the final version of the bill.
Update merger filing fees to increase funding for antitrust regulators.
In the scramble to pass the massive package, many provisions were added. Among them was a bill co-sponsored by Sens. Amy Klobuchar (D-minn.) and Sen. Charles E. Grassley (RIowa) to ensure larger companies are paying more in filing fees amid concerns that federal antitrust enforcers don’t have the resources they need to take on large tech companies. Klobuchar praised the Senate vote in a statement, saying “the Federal Trade Commission and Department of Justice’s Antitrust Division are one step closer to having additional resources to conduct rigorous reviews of large mergers.”
Semiconductor companies widely praised the bill's passage.
Yet some tech groups raised concerns about late amendments to the bill.
“We are encouraged that the Senate has made U.S. competitiveness and technological innovation a priority with an emphasis on AI and other emerging and critical technologies,” Arthur D. Sidney, Computer & Communications Industry Association vice president of public policy, said in a statement. “However, late amendments to this critical bill may prove unworkable or counterproductive for U.S. industry.”
The bill will now move to the House.
Its future there is uncertain as some Democrats have raised early concerns. President Biden praised the Senate's passage of the bill in a statement, and he said his administration would work with House lawmakers to ensure the legislation quickly comes to his desk.
“We are in a competition to win the 21st century, and the starting gun has gone off,” Biden said in a statement. “As other countries continue to invest in their own research and development, we cannot risk falling behind. America must maintain its position as the most innovative and productive nation on Earth.”