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Senate Overwhelmingly Adopts $ 250 Billion Technology Investment Bill Aimed at Countering China

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The Senate overwhelmingly passed an extensive bill to invest nearly $ 250 billion in US manufacturing and technology to address China’s economic and strategic challenges.

Tuesday’s 68-32 vote on the bill was a rare manifestation of bipartisanship in the otherwise polarized Senate, and a clear indication of concern on both political parties that the United States is at risk of lagging behind its largest global rival.

“When all is said and done, the bill will be recognized as one of the most important things this House has done in a very long time,” Senate Majority Leader Chuck Schumer said in the Senate Hall ahead of the vote. “Whoever wins the race to the technology of the future will become the world’s economic leader – with serious implications for foreign policy and national security.”
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The law allows $ 190 billion to be spent, most of which is aimed at expanding research and development at universities and other institutions. It also includes $ 52 billion in emergency spending to help domestic semiconductor manufacturers expand production, a position that has taken on new urgency with a global chip shortage that has shut down U.S. car factories and disrupted consumer electronics production.

Despite widespread Senate support and approval from President Joe Biden’s administration, the fate of the bill in the House of Representatives remains uncertain. House leaders have not publicly pledged to act on the Senate bill, nor have they set out a course of action beyond the House Science Committee, given its own plan to modernize the National Science Foundation.

However, Schumer said he spoke with House Speaker Nancy Pelosi and House Committee Chairman Eddie Bernice Johnson about the approach taken in the lower house. He said the Senate bill, after various amendments, is now closer to what the House of Representatives is working on.

“This is on the agenda of President Biden, and I am quite confident that we will get a really good product on the presidential table,” Schumer said.

Schumer and Senator Todd Young, an Indiana Republican, co-sponsored a legislative framework aimed at increasing federal support for research in technology and manufacturing innovation. Just over a month after its introduction, lawmakers have debated a slew of amendments as many have tried to apply their own China-targeted measures.

Sumer combined his and Young’s original Infinite Frontiers Act, named after the seminal 1945 report that led to the creation of the National Science Foundation, with the legislation of the Committee on Foreign Relations, the Banking Committee, and the Committee on Homeland Security and Government Affairs, among others.

This reflects Biden’s call to counter long-term cuts in federal government spending on research and development. It accounted for 0.7% of gross domestic product last year, according to the National Science Foundation – the ratio improved in part as the pandemic wreaked havoc on GDP. R&D spending peaked at 2.2% of GDP in 1964, followed by decades of advances including the moon landing, human genome mapping, and the development of the Internet.

The new bill also added a separate initiative providing incentives and $ 52 billion grant programs to support domestic semiconductor manufacturing, as sought by Republican Senators John Cornin of Texas and Tom Cotton of Arkansas and Democrats Mark Kelly of Arizona and Mark Warner. from Virginia.

The move was supported by industry officials after months of complaints from manufacturers that semiconductor shortages are hampering the delivery of everything from consumer electronics to pickups.

“Semiconductors form the nerve center of the American economy, national security and critical infrastructure,” said John Neuffer, president and CEO of the Semiconductor Industries Association. “We look forward to working with executives and congressional leaders to swiftly make the necessary federal investment in chip technology to ensure that more of the chips our country needs are researched, developed, and manufactured on the shores of the United States.”

Darpa Money

This money, as well as another $ 2 billion for related programs, will be available after the law is passed. The rest of the costs in the bill will depend on the appropriation process. The amendment by Senator Ben Sasse, a Republican from Nebraska, also provides for an additional $ 17.5 billion for the Defense Advanced Research Projects Agency – or Darpa – over five years.

Some Republicans have rejected the idea that the government directs research and industrial policy.

“Maintaining our technological superiority over China requires punishing China’s misbehavior and relying on the natural innovative entrepreneurship of America’s market economy, rather than imitating China’s central planning,” Pennsylvania GOP Senator Pat Toomey said in a statement ahead of the vote against the bill.

Senate GOP Leader Mitch McConnell, who criticized earlier versions of the bill as “not prime time ready” and weak in terms of defense, said the bill is an important step forward and a rare area of ​​bipartisan compromise, but should not be “the final word. »About the competition between the United States and China.

“Needless to say, the final adoption of this law cannot be the last word of the Senate regarding our rivalry with China,” McConnell said in the Senate conference room. “It definitely won’t be mine.”

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