Chips Act Backers Eye Thursday House Action After 64-33 Senate Passage

Senate backers of the Chips and Science Act package of U.S. semiconductor incentives and tech competitiveness initiatives and House leaders voiced strong optimism Wednesday that the measure will make it through Congress before the lower chamber recesses Friday for the six-week August break.

The Senate voted 64-33 Wednesday to pass the measure as an amendment to shell bill HR-4346, in line with previous votes to clear procedural votes (see 2207260067). Sen. Bernie Sanders, I-Vt., a repeated critic of the measure, was again the only Democratic caucus member to vote against it. Three senators who had declared support for the legislation were absent for the final vote: Appropriations Committee Chairman Patrick Leahy, D-Vt.; Joe Manchin, D-W.Va.; and Lisa Murkowski, R-Alaska.

The HR-4346 amendment the Senate approved Wednesday fully mirrors the text Senate Majority Leader Chuck Schumer, D-N.Y., bowed earlier this month, which drew some elements from the House-passed America Creating Opportunities for Manufacturing, Pre-Eminence in Technology and Economic Strength Act (HR-4521) and Senate-passed U.S. Innovation and Competition Act (S-1260). It includes $52 billion in Creating Helpful Incentives to Produce Semiconductors for America Act funding, the investment tax credit from the Facilitating American-Built Semiconductors Act (S-2107), the Commerce Department title, research security provisions and a permitting provision to shorten the time to build a semiconductor fabrication plant from six to seven years to about 18 months.

President Joe Biden urged the House to “promptly pass” HR-4346 and “send this bill to my” desk. “As Americans are worried about the state of the economy and the cost of living, the CHIPS bill is one answer: it will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers,” Biden said: “It also will create jobs -- good-paying jobs right here in” the U.S. “It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security,” he said.

'Broad Support in the House'

“This is going to get broad support in the House” when the chamber takes it up as soon as Thursday, Schumer said during a celebratory news conference after the chamber passed HR-4346. He acknowledged the measure “probably” won’t get “unanimous” support from House Democrats but noted it has support from the leaders of multiple major committees. House leaders previously fielded HR-4521 as an alternative competition bill after objecting to parts of S-1260, leading to conference committee negotiations to marry elements of the two bills that preceded consideration of HR-4346 (see 2207120051).

Schumer, Commerce Committee Chair Maria Cantwell, D-Wash., and other Senators were also looking ahead to a follow-up competitiveness bill to address matters left out of HR-4346. Schumer told reporters he expects to file that measure in September. “The pieces that are still left out, we’ve got to keep working on them,” Senate Intelligence Committee Chairman Mark Warner, D-Va., said in an interview.

Cantwell, who’s led the HR-4521/S-1260 conference negotiations, said she’s “going to finish” those talks. “We’re very confident” in HR-4346 as a “first step” in bolstering U.S. tech competitiveness against China and other adversaries, but a follow-up measure “could include other language on more aspects of how to work across countries in the Asia-Pacific to build more alliances,” she said. Cantwell noted Senate Foreign Relations Committee Chairman Bob Menendez, D-N.J., has “a very, very substantive Indo-Pacific agenda” that he’s aiming to include in a broader competitiveness bill.

Schumer "has talked" about trying to move the conference report items that didn’t make it into S-4346 and it’s “worth a shot to try to negotiate some of the more challenging and contentious policy proposals,” including trade and “outbound investment” issues, S-1260 lead GOP sponsor Sen. Todd Young, R-Ind, told reporters. “Those are obviously things that still need to be worked out.”

Senate Minority Whip John Thune, R-S.D., is more skeptical. “A lot of stuff that got left out” of HR-4346 “that originated in the House were things that were never going to make it through the Senate anyway,” he said.

'Highest Priority'

HR-4346 will be “the highest priority” in the House following Senate passage, with a floor vote likely to happen “as early as” Thursday, House Majority Leader Steny Hoyer, D-Md., told reporters Wednesday. “This will be one of the most important bills that we pass this Congress,” he said. House Speaker Nancy Pelosi, D-Calif., called the measure “a major victory for American families and the American economy” that “will bolster our nation’s production of semiconductor chips” while also imposing “strong guardrails” on the funding to ensure it goes “straight into our economy -- not into corporate pockets.” The House Rules Committee was meeting Wednesday afternoon to set up floor rules for HR-4346.

S-1260 critic and House Science Committee Chairwoman Eddie Bernice Johnson, D-Texas, praised HR-4346 for including “bipartisan provisions” from HR-4521 that “originated” from the panel. “We are ushering in a bold and prosperous future for American science and innovation” via HR-4346, Johnson said: “It is time for my House colleagues to come together and bring this package to” Biden’s desk.

House Commerce Committee ranking member Cathy McMorris Rodgers, R-Wash., criticized parts of HR-4346. “I support manufacturing chips at home in the U.S., but we cannot accelerate American leadership in critical industries, like semiconductors, through spending alone,” she said: “It is disappointing that outspending China, rather than lifting burdensome regulatory barriers, continues to be the goal of this legislation. I hope that these are concerns the House will make a priority to address.”

HR-4346’s chip funding is a “medium term” method of addressing the semiconductor shortage, said Margaret McCarthy, Information Technology Industry Council senior director-government affairs, in an interview. It will allow existing investments in U.S. semiconductor manufacturing to be accelerated and expanded, she said. McCarthy believes the next step after House passage of the measure is for stakeholders to partner with the Commerce Department to get the program up and running.

HR-4346 “represents a strategy for long-term” U.S. “economic success with investment in education, research and development and science,” said Computer & Communications Industry Association President Matt Schruers: “It will help bring more microchip production to the US, which is an essential input to a growing range of” U.S. products. The Alliance for Automotive Innovation, Dish, Intel, Semiconductor Industry Association and Small Business for America’s Future are among other groups that praised the Senate for passing HR-4346.