Senate advances semiconductor bill to compete with China

The Senate has resolved to push forward with a reduced version of the bill aimed at boosting US semiconductor competition with China.

The bill cleared an important procedural hurdle with 64-34 votes on Tuesday night, even though lawmakers worked to complete various sections of the law.

The bill provides about $ 50 billion in grants to boost US computer chip manufacturing and is a multifaceted combination of the interests of several committees, from national security to economics. It is a bipartisan effort.

The procedural progress of the Senate on Tuesday paves the way for the Chamber of Commerce to vote for the final pass later this week or early next week.The bill then moves to the House of Representatives for passage before heading to the president Joe BidenA desk for signing the law.

The broadest purpose of this law is to encourage semiconductor production in the United States to reduce reliance on Asian-based manufacturers.

Biden administration officials say the larger domestic chip industry will help alleviate the supply chain turmoil that has hindered economic recovery. COVID-19 It then isolates the United States from supply channels controlled by its political rival, China.

The global chip shortage over the last two years has spilled over into several industries, including automakers, mobile phones, consumer tech companies, and defense system makers.

Senator John Cornyn, a Texas Republican and the lead author of the original Senate text, said: The economic impact of law on a pair of Twitter posts It was released on Tuesday.

“If the United States loses access to advanced semiconductors (not made in the United States) in the first year, GDP could shrink by 3.2% and lose 2.4 million jobs,” he wrote. “GDP loss will be three times ($ 718 billion) of the estimated $ 240 billion in US GDP lost in 2021 due to a continuous chip shortage.”

The highlight of the bill is $ 52 billion to rebuild domestic chip production and a tax cut to encourage the construction of a factory based on US chip stocks that rebounded on Tuesday prior to the expected vote. Intel 3.9% increase Nvidia 5.5% higher Texas Instruments 3.1% up, everything wider S & P 500 2.8% gain.

The process has progressed more than a year since the Senate first approved a $ 250 billion bill to step up US chip manufacturing and revitalize US R & D in a bipartisan vote.

However, after the Senate cleared it in June 2021, the House of Representatives never considered the law.

House Democrats has drafted its own version of China’s competition law, with a greater emphasis on milder national security tones and funding for climate change. Republicans opposed the bill.

Democrats in both chambers of commerce have been trying for months to adjust for the differences between the two versions. With annual inflation above 9% and the party set for a tough midterm election, the Biden administration has proposed approving a simpler bill aimed solely at increasing chip production. ..

It’s unclear if Senate Democrats will get the 60 votes they need to avoid filibuster on the final bill. To do so will require support from some Republicans lamenting that much of their work to prepare for competing with China could be thrown.

Even top Democrats, including New Jersey’s Diplomatic Commission chairman Bob Menendez, have blamed the diluted bill.

“Now we’re at a stage where we don’t really know what the final bill will be, or where the vote is,” said Senate Republican Whip John Thune, RS.D. Told Politico last week. “I know where the last vote was, but it was another time and a different bill than what I’m talking about today.”

But Democrats are also facing new challenges with Republicans. Republican Party leader Chuck Schumer, DN.Y. Threatened to upset the semiconductor bill as it continued to pursue another plan to pass a party bill on tax and climate policy.

Other late policy decisions could further complicate matters, including whether to reduce tariffs on Chinese goods originally imposed by former President Donald Trump.