WASHINGTON — The Biden administration and congressional Democrats are trying to break a deadlock on legislation aimed at enhancing U.S. competitiveness with China and boosting the domestic semiconductor industry, which has been stalled since Senate GOP leader Mitch McConnell threatened to scuttle the bill.
Commerce Secretary Gina Raimondo and Director of National Intelligence Avril Haines are among the administration officials briefing senators Wednesday on the national security implications of the legislation, which includes a widely supported provision providing $52 billion in grants and incentives for domestic semiconductor manufacturing.
“It would be malpractice not to get this to the president’s desk,” Democratic Sen. Mark Warner, one of the original sponsors of the chip provision, said in an interview. “Not only because of the investment but the fact that companies are making decisions right now.”
McConnell has threatened to block the legislation, despite having voted for the Senate’s version, if Democrats go through with their plan for a separate package of tax hikes and climate measures. The House and Senate had been working for months to resolve the differences between their bills, but those negotiations have effectively stopped since McConnell made his threat.
Enactment of the semiconductor incentives is a top priority for the Biden administration as well as manufacturers such as Intel Corp. and companies that are heavy users of chips. While the global semiconductor shortage has eased somewhat, there is still limited production for certain chips used in cars and home appliances.
Democrats could bypass the Republican blockade if the House passed the Senate version, but that has been rejected by Democratic leadership in the chamber.
“You might as well eliminate the House,” House Majority Leader Steny Hoyer said. “I think it’s an arrogant, unreasonable demand.”
But Indiana Republican Sen. Todd Young, who has been at the center of the talks, on Wednesday said he’s “going to continue to make the case” that the House should pass the Senate bill.
Significant differences remain between the House and Senate bills. House Democrats have pushed to include Trade Adjustment Assistance benefits for workers displaced by international competition. There are also disagreements about investment tax credits, restrictions on outbound investment to China, Taiwan provisions and funding for research universities.
“The administration supports the bipartisan and bicameral effort in Congress to provide greater transparency on U.S. investment into China and other countries of concern, particularly for transactions in critical sectors that could undermine America’s national security by blunting our technological edge or undermining our supply chain resilience,” White House National Security Adviser Jake Sullivan said in an email.
There is broad agreement on the provision for semiconductor manufacturing, known as the CHIPS Act, and some lawmakers have discussed scenarios for keeping that alive by passing it as a standalone measure, including it in the Democrats-only economic plan or adding it to the annual defense policy bill. If CHIPS is passed by itself, the parts of the broader legislation boosting scientific research and education, strengthening supply chains, imposing sanctions on China and improving research security would fall to the side.
Rep. Hakeem Jeffries, a member of House Democratic leadership, told reporters the plan is to continue negotiations on a bipartisan bill in the hopes of getting it done before August recess.
“We are working hard to find common ground and significant progress has been made,” he said. “It is my belief that we will have an agreement hopefully before the end of this work period.”
Some of the Democratic lawmakers most at risk in the November election are urging their leaders to do whatever is necessary to move the bill forward, particularly the semiconductor funding.
Democratic Rep. Elissa Slotkin of Michigan said auto manufacturers and suppliers in her district “have weekly work stoppages and line stoppages because we can’t get chips.” She said if the broader bill is stalled, the chips provision should get a vote on its own.
Rep. Cindy Axne, a Democrat from Iowa, said she’d like to see several labor provisions in the House bill added to the Senate product, but wouldn’t rule out voting for the Senate bill as is.
“It absolutely has to get done,” she said. “I’m appalled by the fact anyone would try and stop it now when all of the direction wants it to be there.”
