WASHINGTON – The Senate on Wednesday approved a sweeping $280 billion bill aimed at boosting America’s technological and manufacturing advantage to counter China, adopting in an overwhelming bipartisan vote the largest government intervention in industrial policy yet. in decades.
The legislation reflected a remarkable and rare consensus in a polarized Congress in favor of forging a long-term strategy to address the nation’s growing geopolitical rivalry with Beijing. The plan focuses on investing federal money in cutting-edge technologies and innovations to strengthen the country’s industrial, technological and military strength.
The measure was approved 64 to 33, with 17 Republicans voting in favor. The bipartisan support illustrated how trade and military competition with Beijing, as well as the promise of thousands of new American jobs, has dramatically changed the party’s long-standing orthodoxies, generating agreement among Republicans who once they had avoided government intervention in the markets and the Democrats who had resisted the shower. large companies with federal scope.
“No government in any country, even a strong country like ours, can afford to sit on the sidelines,” Sen. Chuck Schumer, D-New York and the majority leader who helped lead the measure. “I think it’s a sea change that’s going to stick.”
The bill will next be examined by the House, where it is expected to pass with some Republican support. President Biden, who has supported the package for more than a year, could sign it into law as early as this week.
The bill, a convergence of economic and national security policy, would provide $52 billion in additional grants and tax credits to companies that make chips in the United States. It would also add $200 billion for scientific research, particularly in artificial intelligence, robotics, quantum computing and a variety of other technologies.
The bill calls for $10 billion to be poured into the Commerce Department, which would also distribute chip grants to companies that apply, to create 20 “regional technology centers” across the country. The brainchild of Senator Todd Young, Republican of Indiana and Mr. Schumer, the centers would aim to link research universities with private industry in an effort to create Silicon Valley-like centers of technological innovation in areas hollowed out by globalization.
The legislation would allocate billions to the Department of Energy and the National Science Foundation to promote both basic research and research and development in advanced semiconductor manufacturing, as well as workforce development programs, in an effort to build a pipeline of labor for a large number of emerging products. industries
The effort has marked a foray into industrial policy that has had little precedent in recent American history, and raised countless questions about how the Biden administration and Congress would implement and oversee a major initiative involving hundreds of thousands of of millions of taxpayer dollars.
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The approval of the legislation was the culmination of years of effort that, according to Mr. Schumer, started in the Senate gym in 2019, when he approached Mr. Young with the idea. Mr. Young, another China hawk, had previously worked with Democrats on foreign policy.
In the end, Senate support was made possible only by an unlikely collision of factors: a pandemic that exposed the costs of a global semiconductor shortage, strong lobbying by the chip industry, the persistence of Mr. Young to urge his colleagues to break with the party. orthodoxy and support for the bill, and the rise of Mr. Schumer in the top job in the Senate.
Many senators, including Republicans, saw the legislation as a critical step in strengthening America’s semiconductor manufacturing capabilities as the nation has become dangerously dependent on foreign countries, particularly an increasingly vulnerable Taiwan, for advanced chips.
Mr. Schumer said it had not been too difficult to rally the votes of Democrats, who tend to be less opposed to government spending. But he also nodded in support from Republicans, including Sen. Mitch McConnell of Kentucky, the minority leader: “To their credit, 17 Republicans, including McConnell, came in and said, ‘This is spending that we should do.”
The legislation, which was known in Washington for an ever-changing carousel of high-profile names, has defied easy definition. At more than 1,000 pages, it is simultaneously a research and development bill, a short-term and long-term employment bill, a manufacturing bill, and a semiconductor bill.
Its initial version, written by Mr. Schumer and Mr. Young, it was known as the Endless Frontier Act, a reference to the landmark 1945 report commissioned by President Franklin D. Roosevelt that asked how the federal government could promote scientific progress and manpower.
“New frontiers of the mind lie before us, and if they are pioneered with the same vision, boldness and drive with which we have waged this war,” wrote Mr. employment and a fuller and more fruitful life”.
Enactment of the legislation is seen as a critical step in strengthening U.S. semiconductor skills when the share of modern manufacturing capacity in the U.S. has plummeted to 12 percent. That has made the nation increasingly dependent on foreign countries amid a chip shortage that has sent shockwaves through the global supply chain.
The subsidies to chip companies were expected to bring tens of thousands of jobs in the short term, with manufacturers pledging to build new factories or expand existing plants in Ohio, Texas, Arizona, Idaho and New York . While the chip companies won’t immediately receive the federal money, several had said they would make business decisions in the coming weeks based on whether they received assurances that the money would arrive soon.
The bill also aims to create long-term research, development and manufacturing jobs. It includes provisions aimed at creating pipelines of workers – through workforce development grants and other programs – concentrated in once-booming industrial centers emptied by corporate offshoring.
In an interview, Mr. Young described the legislation as an effort to equip American workers affected by globalization with jobs in cutting-edge fields that would also help reduce the country’s dependence on China.
“These technologies are key to our national security,” Young said. “We’re actually giving grassroots Americans an opportunity, in terms of chip manufacturing, for example, to play a significant role, not only in supporting their families, but also in leveraging our creativity, talent and hard work to win the 21st century”.
The bill is expected to pave the way for factory construction across the country, and along with it, tens of thousands of jobs.
Chipmakers lobbied hard, and often shamelessly, for the subsidies, threatening in recent months to sink their resources into building plants in foreign countries like Germany or Singapore if Congress didn’t quickly agree to provide them with federal money. to stay in the United States. states
The legislation also stipulates that chipmakers that take federal funds and tax subsidies under the legislation cannot expand existing factories or build new ones in countries such as China and Russia, in an effort to curtail advanced manufacturing of chips in countries that present a national security problem. .
The Commerce Department would claw back the funds provided by the bill if companies do not comply with those restrictions, the senators said.
Most senators, especially those representing states targeted by chip companies, saw those efforts as a reason to quickly pass the legislation. But they particularly angered Sen. Bernie Sanders, the Vermont independent, who has bluntly and frequently accused the wealthy executives of these companies of shaking down Congress.
“To make more profit, these companies took money from the government and used it to ship high-paying jobs overseas,” Sanders said. “Now, as a reward for this bad behavior, these same companies are in line for a massive taxpayer bailout to undo the damage they did.”
Several times during the bill’s life, it seemed doomed to collapse or be drastically scaled back. In its most limited form, it could have shied away from long-term strategic policy provisions, leaving only the most commercially and politically urgent measure, the $52 billion in subsidies for chip companies.
The bill appeared in jeopardy late last month after Mr. McConnell announced that he would not let him continue if Senate Democrats continued to advance his social policy and tax plan, the centerpiece of Biden’s domestic agenda.
In a private conversation, Mr. Young asked Mr. McConnell to reconsider.
Mr. McConnell “saw the short-term value proposition and, frankly, the importance of funding chip legislation,” Young recalled.
Still, with McConnell’s position uncertain and other Republicans refusing to commit to supporting the measure, Schumer decided last week to force a quick vote on the semiconductor subsidies, leaving open the possibility that the bill wider left aside.
This spurred a last-minute effort by Mr. Young to get the support of enough Republicans — at least 15, Mr. Schumer- to restore critical investments in manufacturing and technology. For days, Mr. Young and his allies worked the phones to try to win over Republicans, emphasizing the national security importance of the bill and the opportunities it could bring to their states.
At a private party lunch on Tuesday, Mr. Schumer gave his members a presentation of his own.
“This bill will have one of the largest and most…