GOP Opposition in House Puts U.S.-China Competition Bill at Risk

(Bloomberg) -- Once-popular legislation aimed at making the U.S. more competitive with China and boost the domestic semiconductor industry is at risk of unraveling in the House as Republican lawmakers withdraw their support for the bill.

House Democrats are planning a vote this week on their version of the legislation, which would then be merged with a bipartisan $250 billion Senate version that passed last June.

While Democrats have the votes to push the legislation through the House, GOP opposition in that chamber is likely to spill over into the Senate, where Republican support is needed for passage, as the two chambers try to merge the two bills into one piece of legislation.

Both bills are meant to address a widely agreed-upon need to bolster U.S manufacturing, research and development and ease the dependence on China for semiconductors. How to tackle the growing economic and geopolitical might of a rival superpower has been forefront in the mind of the White House.

The House legislation includes $52 billion to support domestic chip research and production amid a global semiconductor shortage, as well as authority for $45 billion to improve the nation's supply chains to prevent shortages of critical goods. It also would set up programs to increase science, technology, engineering, and mathematics education and training.

But provisions on trade in the House version have led to GOP complaints that the legislation doesn't do enough to rein in China. They also object to some climate provisions.

“This bill is an attempt to look tough on China without taking any real action,” said GOP Representative Steve Chabot of Ohio. “This is a desperate political ploy in anticipation of the mid-term” elections later this year.

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Chabot, Representative Michael McCaul and others also oppose some of the climate spending in the bill. McCaul, a Texas Republican who sponsored the provision to provide $52 billion in assistance to the chip industry, said the House bill doesn't include any meaningful curbs on intellectual property theft attempts or address China's record on human rights.

The Biden administration backs passage of the House legislation. If a deal is struck between the House and Senate, the resulting legislation would mark a significant victory for President Joe Biden as his party is facing the potential of losing control of Congress in the November midterm elections.

The bill set for a procedural vote on the House floor on Wednesday with a vote on passage likely on Friday, according to a Democratic aide.

The House bill has some significant differences with the Senate version. While the Senate bill has GOP support, Republican leaders in the House were urging their members to vote against it when it comes to the floor.

Commerce Secretary Gina Raimondo has been lobbying GOP lawmakers. Her message to Republicans has been, while they may not like every part of the bill, it's important to pass it and get to negotiations with the Senate, where they can make changes.

Earlier: House Unveils China, Chips Bill, Paving Way for Senate Deal

Representative Pramila Jayapal of Washington State, the leader of the Congressional Progressive Caucus, said Tuesday that the caucus has priorities for the bill, including “making sure that we get money out to minority and disadvantaged business owners” and prohibiting the use of assistance money for stock buybacks and executive compensation.

“Things look pretty good for those so I think it should be O.K.,” she said.

Senator Todd Young, an Indiana Republican, who was a main sponsor of the Senate bill with Majority Leader Chuck Schumer, said he had “qualified optimism” that the issues could be worked out in negotiations between the two chambers.

“I've spoken to a number of my former colleagues in the House and though they are publicly -- and I think privately -- disappointed in the House's work product, they understand that the reason it was done in that fashion was to expedite its completion,” he said. “And they're hopeful that we can produce something they can vote for in the end.”