US Senate Democratic Majority Leader Chuck Schumer’s plan to tie a measure to boost US competitiveness with China to a massive defense policy bill faces new hurdles in Congress.
The Senate passed the U.S. Innovation and Competition Act (USICA) in June, which provides $ 52 billion to dramatically increase U.S. production of semiconductor chips and authorizes $ 190 billion to bolster technology and research American. But the bill never received a vote in the House of Representatives, and its supporters worked for months to find a way to pass it and get it enacted.
Schumer said Tuesday that he hopes to include the USICA as part of the annual National Defense Authorization Act (NDAA) that will be submitted to the Senate on Wednesday.
“The chip shortage is not an abstract problem – it impacts the daily lives of Americans,” Schumer said. “Cars, refrigerators and other home appliances need chips. Supply shortages mean Americans are waiting a long time for these essentials.”
But Senator Bernie Sanders, who caucuses with Democrats, slammed the chip proposal on Tuesday, calling it “business welfare, no strings attached, to a handful of hugely profitable chip companies.”
House Majority Leader Steny Hoyer said on Tuesday he thought the House should adopt its own version of USICA first “and then we can have a conference with the Senate.”
Senator Mark Kelly, also a Democrat, noted that the United States relies heavily on imported semiconductors. “This plan has been inactive,” Kelly said. “There is no more time to waste on this.”
In the equally divided Senate, every Democratic vote is critical. Once the Senate approves its version of the NDAA, Senate and House negotiators will work on a compromise.
US Secretary of Commerce Gina Raimondo told Reuters in an interview last week that the administration was pushing hard to get USICA approval. “It has to happen by the end of this year. It is essential,” said Raimondo.
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Governors, including Michigan Democrat Gretchen Whitmer, have called on Congress to pass the $ 52 billion CHIPS Act, which would set aside $ 2 billion for the type of older tech chips that the auto industry suffers from a severe shortage.
The situation underscores the challenges of the chip shortage, which has hampered the tech and auto industries, cost companies billions in lost revenue and forced factories to put their workers on leave. The administration is struggling to cope with the constraints, but it is also trying to bring production of vital components back to the United States – a target that Intel’s Chinese plan has failed to meet.
