After months of back-and-forth, there’s a growing possibility that Congress will pass only a stripped-down version of the Bipartisan Innovation Act, the industrial-policy package that’s been branded as a counter-China measure. If lawmakers reach an agreement in the coming weeks, it looks increasingly likely that they will advance a bill on semiconductor chip subsidies, without the other provisions under consideration.
For well over a year, lawmakers debated various versions of the legislation, the main components of which were massive investments in the National Science Foundation and a $52 billion allocation for semiconductor chip grants. The Senate passed its version of the package last June, while the House approved its own version earlier this year.
A bipartisan group of conferees from both houses had been hashing out the differences in the hopes of securing a compromise version to send to the president. But a threat by Senator Mitch McConnell to tank the bill over Senate Democrats’ plans to revive the Build Back Better Act had left the China bill’s fate up in the air.
Meanwhile, the administration, led by Commerce Secretary Gina Raimondo, has repeatedly warned lawmakers that failing to pass the chips subsidies would lead firms such as Intel to scale back their plans to build chip facilities here in lieu of expanding elsewhere.
Those warnings, however, rang hollow this weekend, when Raimondo took to ABC’s This Week to defend the potential Build Back Better revival, in addition to expressing a sense of urgency on chips.
Attacking McConnell for threatening the chips bill over Build Back Better, Raimondo asked, “Why can’t we do both?” She later added, “It’s a false choice,” and accused McConnell of “playing politics with our national security,” saying “it’s time for Congress to do its job on both of those dimensions.”
That cast doubt on the sincerity of Raimondo’s urgent pleas on the chips subsidies, throwing into question whether she truly viewed it as a national-security imperative or just one more chance, among others, to secure a legislative win for the president ahead of the midterms.
Yesterday, however, Raimondo indicated that she’d bless a solution proposed by McConnell: passing the chips subsidies as a stand-alone measure. She explained in an interview with Axios:
“I talked to a dozen lawmakers in the past 24 hours,” Raimondo said. “I feel like they are coalescing around the path of [passing] CHIPS immediately and then live to fight another day on the rest of it.”
Key Senate Democrats like Sen. Mark Warner (D-Va.) have been pressing for a standalone CHIPS bill since March.
Between the lines: Raimondo, who has taken the lead in pressing Congress to pass bipartisan China legislation, isn’t giving up getting a more expansive legislation passed by Congress down the line.
“Having said that, we are literally out of time. And the national security risk, as Lloyd Austin and I laid out in our letter today, is immediately significant,” she said.