Bipartisan problems threaten the arrival of money.. the US House of Representatives agrees to pay billions to save the chip industry
With everyone watching the decisions the US will take to maintain its position as a technological power in the chip war, there is some good and bad news about the continuing shortage of chips used in the US tech industry.
The good news is that the US House of Representatives has passed a bill that would allocate nearly $300 billion in technology investments to give a much-needed boost to the US semiconductor industry. The bad news is that this legislation may never see the light of day, at least in its current state.
The US Competition Act of 2022, which the House of Representatives approved last Friday, will provide sweeping support for manufacturing, research and adjust current US trade policy in an effort to challenge China’s growing technological influence.
Among a long list of provisions, the law includes $52 billion in grants to support US chip design and production, plus another $45 billion to bolster the nation’s critical supply chain infrastructure.
The legislation will also support welfare programs geared toward workforce development and take an approach to boosting local research efforts in several areas, such as raising funds for the National Science Foundation and STEM education programs.
House Speaker Nancy Pelosi said at a news conference last Friday that the bill “would secure America’s preeminence in manufacturing, innovation, and economic power, enabling it to outperform any nation.”
Representative Madeleine Dean, a Democrat from Pennsylvania, described the law – in a press release – as “an opportunity to revitalize communities across our nation, especially those that have suffered significant manufacturing job losses for decades.”
If enacted, the legislation would represent America’s most far-reaching attempt yet to rival China’s technological hegemony on the world stage.
However, any hopes of this law making it to President Joe Biden’s office would be virtually zero if lawmakers cannot find a compromise.
As I mentioned newspaper (The New York Times), Republicans have widely criticized the bill for being too weak to compete with China, and for having too many unnecessary provisions aimed at maintaining clean energy.
Several Republican lawmakers have accused Democrats of partly supporting China in their race to boost America’s place in the global technology market. Critics also argue that the bill does not include significant punitive measures to hold Beijing accountable.
Representative Kevin McCarthy, a California Republican and minority leader, has denounced the bill several times, the New York Times reports.
“The law wastes billions of dollars on unrelated matters and does not include any measures to make China pay for the chaos it has caused,” he told the newspaper.
Another bill in the Senate (the American Competition and Innovation Act of 2021) has already garnered the votes needed to pass it with the support of 19 Republican senators. Now, Congress will move to come up with a bill that combines the two parties’ views to present to Biden.
However, deep ideological differences between the two houses (senators and representatives) threaten to tie the negotiations, including how difficult it will be to deal with China, and how to fund domestic research more effectively, The Times reported.
The US President urged Congress last Friday to act quickly. “I look forward to the House and Senate meeting quickly to find a way forward and to put a bill on my desk as soon as possible for my signature. America can’t wait,” Biden said – in a White House briefing.