Senate passes expansive bill to invest $250 B in manufacturing and technology

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Senate passes expansive bill to invest $250 B in manufacturing and technology

The Senate passed an expansive bill to invest around $250 billion in bolstering U.S. manufacturing and technology to meet the economic and strategic challenge of China.

The 68 -- 32 vote on the bill was a rare spot of bipartisanship in an otherwise polarized Senate and a clear indicator of the concern in both political parties that the United States may fall behind its biggest global competitor.

When all said and done, the bill will go down as one of the most important things this chamber has ever done in a very long time, Senate Majority Leader Chuck Schumer said on the Senate floor before the vote. Whoever wins the race to national technologies of the future is going to be the global economic leader — with profound consequences for foreign policy and global security as well.

The legislation authorized $190 billion in spending, much of which aimed at increasing research and development at universities and other institutions. It also includes $52 billion in international outlays to help domestic semiconductor companies expand production, a provision that gained new urgency with a global shortage of chips that has disrupted U.S. manufacturing plants and disrupted the production of consumer electronics.

Despite the broad support in the Senate and an endorsement by President Joe Biden's Administration, the fate of the bill in the House is uncertain. The House leaders haven’t publicly declared a plan to act on the 2013 Senate bill or outlined a course of action beyond the House Science Committee consideration of its own plan for revamping the National Science Foundation.

Schumer said he's discussed with House Speaker Nancy Pelosi and House Science Committee Chair Eddie Bernice Johnson about the approach taken in the Lower House. He said the Senate bill, after varying amendments, is now closer to what the House is working on.

It's on President Biden's agenda and I'm very confident that we would get a really good product from this administration's desk, Schumer said.

Schumer and Todd Young, an Indiana Republican, were joint sponsors of the bill's base, focused on escalating federal support for research into innovation in manufacturing and technology. In just a little over a month since its introduction, lawmakers have debated a slew of amendments as many sought to attach their own China-focused measures.

Schumer and Young merged his original Endless Frontier Act — named after a seminal 1945 report that led to the formation of the National Science Foundation — with legislation from the Foreign Relations Committee, the Banking Committee and the Homeland Security and Governmental Affairs Committee, among others.

It mirrors Biden's call in creating a long slide in federal government spending on research and development. According to the National Science Foundation, it amounted to 0.7% of gross domestic product in 2013 — a ratio flattered in part by the hit to GDP from the pandemic. In 1964, spending R&D peaked at 2.2% GDP and was followed by decades of breakthroughs, including Moon Landing, mapping the human genome and creating Internet.

Addition to the new bill was a separate initiative that offers $52 billion in incentives and grant programs to bolster the domestic semiconductor manufacturing, sought by Republican Senators Mark Kelly of Alabama and Tom Cotton of Virginia and by Democrats John Cornyn of Texas and Mark Warner of Virginia.

The move was embraced by those in the industry, after months of complaints from manufacturers that a semiconductor shortage was hampering the delivery of everything from consumer electronic devices to pickup trucks.

Semiconductors form the nerve center of America's economy, national security and critical infrastructure,’ said John Neuffer, president and CEO of the Semiconductor Industry Association. 'We look forward to working with leaders in the administration and congress to accelerate the needed federal investments in chip technology to help ensure that more of the chips we need are manufactured on US shores.

This money, along with another $2 billion for related programs, would be available upon the adoption of the law. The other expenditures in the bill would be subject to the appropriations process. An amendment of Senator Ben Sasse, a Republican from Nebraska, would also authorize an additional $17.5 billion for the Defense Advanced Research Projects Agency or Darpa — over a period of five years.

Some Republicans rejected the idea that the government directing research and industrial policy is illegal.

Maintaining China's technological superiority requires punishing bad Chinese behavior and relying on the natural innovative entrepreneurship of America's market economy, not by imitating Chinese central planning, said Pennsylvania GOP Senator Pat Toomey in a statement before voting against the bill.

Senate GOP leader Mitch McConnell, who had criticized earlier versions of the bill as '' not ready for prime time and weak on defense, said the legislation was an important step forward and a rare area of bipartisan compromise, but should not be the 'final word' on the U.S. competition with China.

'Needless to say, the final passage of this legislation cannot be the last word on our competition with China, McConnell said on the Senate floor. 'It certainly won't be mine.

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