President Biden’s secretary of commerce is urging lawmakers to fast-track a $52 billion payout to semiconductor manufacturers before Congress’ August recess, even if that means shedding a bevy of tough-on-China measures that have been stuck in congressional gridlock for months.
Commerce Secretary Gina Raimondo, who led classified briefings this week on Capitol Hill to drive home the national security imperative for domestic chip production, said the U.S. has reached a make-or-break moment as industry heavyweights threaten to take their money elsewhere.
“We’re out of time,” Ms. Raimondo told reporters following a briefing Thursday with House members. “If we don’t pass this, we’re going to wake up and other countries will have these investments.”
“This is about national security,” she said. “This isn’t about politics.”
The $52 billion incentive, which is broadly supported on both sides of the aisle, has remained tied up in House and Senate negotiations over the final version of a behemoth China competition bill.
Lawmakers have made little progress in wading through the slew of other provisions included in House and Senate versions of broader bills that include the money for manufacturing microchips.
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Three major semiconductor firms — TSMC, Intel, and Global Foundries — recently warned that they will scale back plans to produce semiconductors if Congress can’t seal the deal.
Ms. Raimondo is not calling the companies’ bluff.
“Here’s what I know: I know that yesterday, the CEO of Global Foundries, a New York-based semiconductor company, is in France announcing an expansion,” she said. “I know that Intel is being a bit squishy about what they’re doing in Ohio and then moving forward in Germany. I know that South Korea, Japan, India, and Europe are right now wooing these companies to their shores.”
The White House is not giving up on the big package of measures to boost U.S. competition with China, but officials are willing to take the $52 billion payout for microchips as a standalone.
“This is about what can we get the votes for,” Ms. Raimondo said. “We cannot wait.”
For many Republicans, the $52 billion boost for semiconductor manufacturing is one of the more palatable provisions from both versions. Removing it from the package would also remove a significant bargaining chip for Democrats to get the rest of the bill across the finish line.
The Senate’s $250 billion U.S. Innovation and Competition Act or USICA passed last June with the support of 18 Republicans and 50 Democrats.
The $335 billion House version, the America COMPETES Act, includes a hodgepodge of spending including $8 billion to help developing countries address climate change, funding to make the U.S. less reliant on Chinese solar technology, and $45 billion to shore up U.S. supply chains.
House Republicans railed against the bill, which passed 222 to 210 in February, as a “foreign policy failure” that funnels taxpayer dollars into an “unaccountable U.N. slush fund.”
The proposal to strip the chips funding from the larger package has received mixed receptions.
Senate Majority Leader Charles E. Schumer, New York Democrat, told colleagues that he will set up a vote on the $52 billion in chips funding as early as next week.
House Majority Leader Steny H. Hoyer, Maryland Democrat, wouldn’t commit to a House vote on it following Thursday’s briefing.
“There are many things in both of these bills that are important,” Mr. Hoyer said. “Not just the chips.”