WASHINGTON—The Senate voted 64 to 32 Tuesday to advance a $280 billion package of subsidies and research funding to boost U.S. competitiveness in semiconductors and advanced technology.
The vote required 60 votes to advance in the evenly divided Senate. Seventeen Republicans joined with all but one member of the Democratic caucus present to move the bill forward. Four senators were absent.
A final Senate vote is expected as early as Wednesday, and then the bill must be approved by the House.
The package is set to give a big boost to domestic chip production, seen by the White House and leaders in both parties as critical to the U.S. supply chain and national security, as most semiconductors are imported from overseas. Shortages have also helped drive prices sharply higher for cars and other goods in recent years, and proponents say the bill will help cool consumer costs.
“I’m confident that future generations will look back on the passage of this chips and science bill as a turning point for American leadership in the 21st century,” said Senate Majority Leader Chuck Schumer (D., N.Y.) on the floor Tuesday.
“We can’t be so dependent” on faraway countries like Taiwan and South Korea for critical components, said Sen. Todd Young (R., Ind.) on CNBC, citing possible disruptions such as a future pandemic or geopolitical event.
Underscoring the importance of the funds for manufacturers, the chairman of South Korea’s SK Group, Chey Tae-won, held a virtual meeting Tuesday with President Biden. SK said it is increasing its investment in the U.S. by $22 billion in businesses including semiconductors and green energy.
The bill had been expected to move ahead in the Senate in a procedural vote Monday, setting up a final vote in that chamber later in the week. But Mr. Schumer delayed the vote until Tuesday, citing East Coast storms that disrupted senators’ travel plans. Several senators have also been out with Covid-19.
The bill restores many but not all of the main provisions of competitiveness legislation passed over the past year by the Senate and House.
The bill combines about $52 billion in subsidy funding to boost semiconductor production in the U.S., along with about $24 billion in advanced manufacturing tax credits that would also support the industry.
The package would authorize about $200 billion in spending, mainly for federally backed scientific research over the next decade. It would fund about $1.5 billion for next-generation wireless research and establish new long-term policies for the nation’s space program.
Much of the science funding represents a compromise between earlier House and Senate science funding bills. There is even a section named for Rep. Eddie Bernice Johnson (D., Texas), the retiring chairwoman of the House Science Committee, underscoring the House’s behind-the-scenes influence on the Senate-written bill.
Supporters, including the Biden administration and the U.S. chip-making industry, say the legislation is needed because of the high cost of building advanced chip manufacturing facilities.
They say the investment is needed for the U.S. to maintain its technological edge and to prevent semiconductor production from becoming too concentrated in Asia, where there are geopolitical risks of supply disruption.
Opponents—who include Sen. Bernie Sanders (I., Vt.) on the left and Sen. Pat Toomey (R., Pa.) on the right—say big semiconductor companies don’t need so much help.
“Should American taxpayers provide the microchip industry with a blank check…when semiconductor companies are making tens of billions of dollars in profits and paying their executives exorbitant compensation packages? I think the answer to that question should be a resounding NO,” Mr. Sanders said on Monday.
The science funding is aimed at boosting the U.S. government’s diminished standing in research spending, by some estimates at its lowest since before the space race of the 1960s. Cutting-edge areas expected to be affected include quantum computing and artificial intelligence.
The package’s revival in recent days came after Senate Republicans abruptly walked away from negotiations this summer. Republicans were unhappy that even as they were negotiating over the sprawling competitiveness bill, Democrats began simultaneously trying to revive a partisan package of climate spending and tax measures.
You must be logged in to post a comment.