The Senate passed the bill Wednesday in a 64-33 vote. Days earlier, House Speaker Nancy Pelosi (D-Calif.) had said there would also be bipartisan support for the bill’s passage in the House and vowed to send it to President Biden’s desk as soon as possible. At the time, House Republican leaders had planned to let their rank and file vote their conscience on the bill.
However, after the stunning news Wednesday night of a deal between Sen. Joe Manchin III (D-W.Va.) and Democratic leaders on a separate climate, health care and taxes bill, House GOP leaders are now urging members to oppose the chips bill as retribution, potentially denying Biden and Senate Majority Leader Charles E. Schumer (D-N.Y.) a legislative win.
Before the House GOP decided to whip against the chips bill, proponents of the legislation thought they could garner a sizable amount of Republican support — perhaps as many as 20 votes, according to two sources familiar with the vote counts who spoke on the condition of anonymity to freely discuss the matter. House progressives have also been squeamish on the bill — Sen. Bernie Sanders (I-Vt.) has been publicly critical and voted against it Wednesday — and there is fear that its passage could be threatened if supporting lawmakers dwindle.
Rep. Pramila Jayapal (D-Wash.), chair of the Congressional Progressive Caucus, told Punchbowl News that she has had reassuring discussions with Commerce Secretary Gina Raimondo about guardrails in the chips bill that prohibit companies that receive federal funding from using the money on stock buybacks.
Biden has said the legislation is one of the top priorities on his agenda and called for Congress to get the bill to his desk as soon as possible. On Wednesday, he praised the bill as one answer to Americans’ worry about the state of the economy and cost of living.
“It will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers,” Biden said in a statement. “It also will create jobs — good-paying jobs right here in the United States. It will mean more resilient American supply chains, so we are never so reliant on foreign countries for the critical technologies that we need for American consumers and national security.”
If the bill passes, about $52 billion would go to microchip manufacturers to incentivize construction of domestic semiconductor fabrication plants — or “fabs” — to make the chips, which are used in a wide variety of products, including motor vehicles, cellphones, medical equipment and military weapons. A shortage of semiconductor chips during the coronavirus pandemic has caused price hikes and supply-chain disruptions in several industries.
The bill also includes about $100 billion in authorizations over five years for programs such as expanding the National Science Foundation’s work and establishing regional technology hubs to support start-ups in areas of the country that haven’t traditionally drawn big funding for tech.
In a White House meeting with business and labor leaders Monday, Raimondo noted that the United States used to make 40 percent of the world’s chips but now makes about 12 percent — and “essentially none of the leading-edge chips,” which come almost entirely from Taiwan.
The United States has invested “nearly nothing” in semiconductor manufacturing, while China has invested $150 billion to build its domestic capacity, Raimondo said. She also said it was critical for the United States to be able to compete with countries around the world that have been providing subsidies to semiconductor companies to build factories.
“The chips funding will be the deciding factor on where those companies choose to expand,” Raimondo said. “We want them, we need them, to expand here in the United States.”
Included in the legislation are provisions that would prohibit companies from building most types of new semiconductor manufacturing facilities in China “or any other foreign country of concern” for a decade after receiving federal funding.
Marianna Sotomayor and Jeanne Whalen contributed to this report.