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House leaders near deal on stalled China competition bill

The U.S. House of Representatives is preparing to move forward on a China competitiveness bill that would authorize billions of dollars in funding to boost U.S. research and development as well as aid for the domestic semiconductor industry, according to a leadership aide.

The move comes after Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi in November announced a deal to find a way to get the U.S. Innovation and Competition Act through Congress after the Senate had passed it in June. The legislation, which has bipartisan support, is a major legislative priority for Schumer and the Biden administration.

There is no timing yet on a vote, but the bill’s supporters say agreement on its contents needs to be reached before midterm election campaigns are in full swing and compromise becomes even more difficult in the Capitol.

The administration has been pressing House leadership to take action on the measure, including the nearly $52 billion in grants and incentives it would provide for the semiconductor industry amid a global chip shortage.

Commerce Secretary Gina Raimondo and President Joe Biden were expected to reach out to Pelosi directly on the package, according to Senator John Cornyn, a Texas Republican and sponsor of the semiconductor provision, who said he spoke to Raimondo about the matter.

Pelosi has told the chairs of several committees — including Science, Foreign Affairs and Energy and Commerce — to draft proposals for a piece of legislation the House can take to conference with the Senate, with the aim of getting a bill both chambers agree on. The House Science Committee earlier passed several bipartisan measures that included similar elements to the Senate bill but were not packaged together.

The Foreign Affairs panel, which is expected to play a major role in the legislation, approved a China competitiveness bill last year that Republicans attacked as too soft on Beijing and too focused on climate change. That bill has since stalled in the House.

Foreign Affairs Chair Gregory Meeks reiterated his commitment to the climate portions of the bill in November, saying it was “tremendously important” and that he would not simply approve what the Senate had passed.

The bill has a narrow path to success in the House — much narrower in some ways than in the Senate, where it made it through on a 68-32 tally. Representative Cathy McMorris Rodgers of Oregon, the top Republican on the Energy and Commerce Committee, called an earlier version of USICA a repeat of “the mistakes of the Obama-Biden Administration.” And the Republican Study Committee, which boasts a large membership in the House, also has panned the legislation.

Progressive concerns

On the other end of the political spectrum, some progressive groups have criticized the bill as too aggressively focused on competition with China — an approach they say could ignite a new cold war. They advocate a more collaborative approach in a letter posted to the Quincy Institute website in May.

But business groups, including the Semiconductor Industry Association, have pushed Congress to pass a bill that addresses competition with China, particularly boosting domestic chip manufacturing.

The chief executives of several companies, including Tim Cook of Apple Inc., Sundar Pichai of Google parent Alphabet Inc. and Mary Barra of General Motors Co. wrote a letter late last year calling on Congress to pass the measure.

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© 2022 Bloomberg L.P
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