Democrats renew push for industrial policy bill targeting China

WASHINGTON — Biden administration officials and Democrats in Congress are pushing to revive stalled legislation that would inject billions of dollars into scientific research and development and bolster domestic manufacturing, amid deep differences on Capitol Hill over the best way to counter China and deal with lingering supply chain woes.

House Democrats on Tuesday night unveiled a 2,900-page bill that would authorize $45 billion in grants and loans to support supply chain resilience and American manufacturing, as well as billions of dollars in new funding for scientific research. Speaker Nancy Pelosi said in a statement that she hopes lawmakers will quickly begin negotiations with the Senate, which passed its own version of the bill last June, to agree compromise legislation that could be sent. to President Biden for his signature.

But that effort is running into obstacles in Congress, where attempts to invest significant federal resources in scientific research and development to bolster competitiveness with China and tackle semiconductor shortages have failed. The Senate-passed measure failed last year amid ideological disputes with the House and a focus on efforts to pass Mr. Biden’s infrastructure and social policy bills. For months, the competitiveness measure was rarely even mentioned, except perhaps by Sen. Chuck Schumer, Democrat of New York and Majority Leader, who personally championed it.

But in the face of a disruptive semiconductor shortage that has severed supply chains and helped fuel inflation, Democrats are now vigorously pushing the bill forward. With Mr. Biden’s domestic agenda, the party is eager for a legislative victory, and senior administration officials and lawmakers have said they hope to send a compromise bill to the president’s office in some months.

“We have no time to lose to improve American competitiveness, strengthen our lead in global innovation, and address supply chain challenges, including in the semiconductor industry,” said Mr. Schumer.

The House bill and one that passed the Senate last year would send a lifeline to the semiconductor industry during a global chip shortage that has shuttered auto factories and rippled on the economy. The bills would offer chip companies $52 billion in grants and subsidies with few restrictions.

The measures would also inject billions more into scientific research and development pipelines in the United States, create grants and foster agreements between companies and research universities to encourage breakthroughs in new technologies and create new jobs and apprenticeships in the manufacturing sector.

“The proposals presented by the House and Senate represent the kind of transformational investments in our industrial base and in research and development that helped the United States lead the global economy in the 20th century,” Mr. Biden in a statement. “They’ll help bring manufacturing jobs back to the United States, and they’re focused squarely on reducing the kind of supply chain bottlenecks, like semiconductors, that have driven up price for the middle class.”

Lawmakers will still have to overcome differences of opinion in the House and Senate on how best to tackle China and, perhaps most crucially, how to fund the country’s scientific research.

“There are disagreements, legitimate disagreements,” Gina Raimondo, the Commerce Secretary, said in an interview. “How do we do this? How do we get it right? There doesn’t seem to be much disagreement on the $52 billion core appropriations for chips. There is disagreement on how we invest in basic science research and development.

A major difference is that while the Senate bill invests heavily in specific areas of advanced technology, such as artificial intelligence and quantum computing, the House bill imposes few stipulations on the new funding cycle, apart from saying that it should go to basic research.

In a memo on the legislation, House aides wrote that their measure “focuses on solutions first, not tech buzzwords.”

Some experts argue that this approach lacks urgency. Stephen Ezell, vice president of global innovation policy at the Information Technology and Innovation Foundation, a policy group that receives funding from telecommunications and tech companies, called the bill a the Chamber of “not enough to allow the United States to win the competition of advanced technologies with China”. .” He argued that the emphasis on advanced technology in the bill passed by the Senate would do more to increase American competitiveness.

Moreover, as lawmakers debate how to counter Beijing’s growing influence, efforts to compromise on the foreign policy elements of the legislation will most likely create tension between the chambers and between Democrats and Republicans. . In the Senate, for example, lawmakers have included stricter requirements for when universities must report foreign funding to the Department of Education.

House Democrats have resisted the Senate’s proposed foreign policy provisions, complaining that the chamber has focused too narrowly on fighting China rather than investing in domestic manufacturing. Much of the foreign policy legislation added by Democrats to the House bill focuses on climate change; The House measure would also authorize $225 million over five years to bolster State Department military training and education programs in the Indo-Pacific region.

Few Republicans are expected to support the House bill, although some of the measures included in the legislation have already garnered bipartisan support.

“It hardly reflects any Republican input and — to be blunt — will be dead when it gets to the U.S. Senate,” said Rep. Michael McCaul of Texas, the top Republican on the Foreign Affairs Committee, who said the draft law had not taken long enough. line against China.

The House bill would ease immigration restrictions for high-level workers and entrepreneurs, allowing PhDs in science, technology, engineering and math to receive green cards even if the United States have already reached their visa quota. It would also allow a non-citizen to apply for a green card as an “immigrant entrepreneur”.

There were signs the House proposal could spark a lobbying skirmish over other tech issues as well. It includes measures aimed at major online retail marketplaces like Amazon, eBay and Etsy, which critics say can be vectors for counterfeits, stolen goods and unsafe products. Some of the bill’s language would make sites like Amazon liable for trademark infringement lawsuits if they don’t take steps to stop counterfeits from moving onto their virtual shelves.

House lawmakers had privately derided the Senate bill as riddled with pet projects, citing provisions as diverse as a new round of funding for NASA and a ban on the sale of fins of shark. But the House bill also includes a series of measures that seem to have little to do with manufacturing and global competitiveness, including provisions allowing research on marine mammals, efforts to conserve coral reefs and a contribution from $4 billion to the United Nations-led Green Climate Fund.

David McCabe contributed report.