The Washington Post

Bill that Senate has approved would be massive investment in competitiv­eness

- Cat.zakrzewski@washpost.com Aaron Schaffer contribute­d to this report.

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.”

 ?? JABIN BOTSFORD/THE WASHINGTON POST ?? Senate Majority Leader Charles E. Schumer (D-N.Y.) is the lead author of the U.S. Innovation and Competitio­n Act.
JABIN BOTSFORD/THE WASHINGTON POST Senate Majority Leader Charles E. Schumer (D-N.Y.) is the lead author of the U.S. Innovation and Competitio­n Act.

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