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House votes on bill to subsidize US-made semiconductor chips

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The House is expected to vote Thursday on the $280 billion Chips and Science Act, a bill that would subsidize domestic semiconductor manufacturing and invest billions in scientific and technological innovation in an effort to boost the competitiveness and self-reliance of the United States. in what has been seen as a cornerstone industry for economic and national security.

The Senate approved the bill on Wednesday by a vote of 64 to 33. Days earlier, House Speaker Nancy Pelosi (D-Calif.) had said there would also be bipartisan support for the bill’s approval in the House and promised to send it to President Biden’s desk as soon as possible. At the time, Republican House leaders planned to have their supporters vote their conscience on the bill.

However, following the stunning news Wednesday night of a deal between Senator Joe Manchin III (DW.Va.) and Democratic leaders over a separate climate, health care and tax bill, House GOP leaders are urging members against to oppose the chips bill because of retaliation, potentially denying Biden and Senate leader Charles E. Schumer (DN.Y.) a legislative victory.

Before the House GOP decided to hit the chips bill, proponents of the legislation thought they could get a significant amount of Republican support — perhaps as many as 20 votes, according to people familiar with the vote counts who spoke on condition of anonymity against free. talk about the matter. They said House GOP leaders are still expecting some defectors, but not an overwhelming number.

Some members of the Congressional Progressive Caucus have also been squeamish about the bill — Senator Bernie Sanders (I-Vt.) has been publicly critical and voted against it on Wednesday — and there are fears its approval could be threatened if support for lawmakers dwindles. .

Democratic leadership leaders are telegraphing that they have the votes, but some liberals are waiting for Commerce Secretary Gina Raimondo’s pitch at a virtual meeting Thursday afternoon before making a final decision. Rep. Pramila Jayapal (D-Wash.), the progressive caucus chair, told Punchbowl News that she has had reassuring discussions with Raimondo about guardrails in the chips law that prohibit companies receiving federal funding from using the money for share buybacks.

On Thursday, minority leader Kevin McCarthy (R-Calif.) criticized the bill as a “$280 billion blank check” to the semiconductor industry, saying he had always opposed it. Rep. Guy Reschenthaler (R-Pa.) criticized the legislation as one that would benefit only “a single industry”, and several GOP lawmakers urged their colleagues to vote no.

Rep. Joseph Morelle (DN.Y.) countered by saying that few industries did not use semiconductor chips.

“Chips take care of everything. So whether it’s yours mobile phone, your laptop, your car, it really doesn’t work matter. There are chips in children’s toys,” says Morelle. “And the fact is, we’ve lost our competitive edge… This isn’t about a single industry. It’s about every industry.”

Later, Morelle read aloud on the floor of the House praise for the legislation — from the Senate Republicans who voted to pass it the day before.

Biden has said legislation is one of the top priorities on his agenda and called on Congress to get the bill on its desk as soon as possible. On Wednesday, he praised the bill as a response to Americans’ concerns about the state of the economy and the cost of living.

“It will accelerate semiconductor manufacturing in America and lower prices for everything from cars to dishwashers,” Biden said in a statement. “It will also create jobs — high-paying jobs here in the United States. It means more resilient U.S. supply chains, so we’re never so dependent on foreign countries for the critical technologies we need for U.S. consumers and national security.”

If passed, about $52 billion would go to microchip manufacturers to encourage the construction of domestic semiconductor factories — or “fabs” — to make the chips, which are used in a wide variety of products, including motor vehicles, cell phones, medical equipment and military weapons. A shortage of semiconductor chips during the coronavirus pandemic has led to price hikes and supply chain disruptions in several industries.

The bill also includes about $100 billion in authorizations over five years for programs such as expanding the National Science Foundation’s work and establishing regional technology hubs to support start-ups in areas of the country that traditionally lack major technology funding. have attracted.

At a White House meeting with business and union leaders Monday, Raimondo noted that the United States used to make 40 percent of the world’s potato chips, but now makes about 12 percent — and “essentially none of the leading chips,” which is almost completely from Taiwan.

The United States has invested “almost nothing” in semiconductor manufacturing, while China has invested $150 billion to build its domestic capacity, Raimondo said. She also said it is critical that the United States can compete with countries that provide subsidies to semiconductor companies to build factories.

“Chip financing will be the deciding factor in where those companies choose to expand,” Raimondo said. “We want them, we need them, to expand here in the United States.”

Legislation includes provisions that would prohibit companies from building most types of new semiconductor manufacturing facilities in China “or any other foreign country of concern” for a decade after receiving federal funding.

Jeanne Whalen contributed to this report.

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