(Bloomberg) — Senate Majority Leader Chuck Schumer said he is abandoning efforts to attach his $250 billion legislation aimed at countering China’s rise to the annual defense bill amid stiff opposition from House Democrats and Senate Republicans.
The decision is another setback for the China bill, which includes $52 billion in incentives and grants to foster semiconductor manufacturing in the U.S. The bill passed the Senate in June by a wide bipartisan margin, but it’s been stuck in limbo as the House debated its own approach to bolstering U.S. competitiveness as China’s economic and diplomatic influence has grown.
Schumer and Speaker Nancy Pelosi, pointing to resistance from Senate Republicans, announced plans Wednesday night to negotiate a final bill addressing China that could pass both chambers.
“The House and Senate will immediately begin a bipartisan process of reconciling the two chambers’ legislative proposals so that we can deliver a final piece of legislation to the President’s desk as soon as possible,” they said in a joint statement.
Schumer’s bid to add it to the defense bill as part of a package of non-controversial amendments was an effort to break that logjam. But Republicans, including Senator James Inhofe of Oklahoma, the top Republican on the Armed Services Committee, wanted a separate vote on the China bill as an amendment to the defense measure. That threatened to delay action on both bills.
Schumer’s plan also ran into a procedural obstacles with the House over provisions of the bill, known U.S. Innovation and Competition Act, that deal with trade and finance. Removing that language would cost Republican support for adding it to the defense bill, thus making it impossible to pass the combined legislation.
Dick Durbin, the Senate’s No. 2 Democrat, told reporters Wednesday that Schumer still wants to move the National Defense Authorization Act — Congress’s must-pass defense policy bill — this week. “Tomorrow, as a matter of fact,” he said.
“We hope to either complete it or have an assurance and a procedure that will complete it when we return,” Durbin said, referring to the Senate’s recess for the U.S. Thanksgiving holiday next week.
In addition to the Senate difficulties, key House members said they would oppose Schumer’s gambit without first passing their own version of the counter-China legislation.
House Foreign Affairs Committee Chairman Gregory Meeks, whose committee has some jurisdiction over the House’s effort, said he hoped to renew efforts for the House to pass following the holiday.
“I am not going to be held to the Senate just coming with their priorities and our priorities not being included therein,” Meeks said. “So therefore we need to pass our bill.”
In addition to $190 billion in authorized spending to bolster U.S. research and development, USICA also includes the $52 billion in emergency appropriations to help bring semiconductor manufacturing back to the U.S.
The incentives for chip production, which are backed by President Joe Biden, have been closely watched by officials at semiconductor manufacturing companies, some of whom say it would be impossible to build new chip plants in the U.S. without those incentives. The discussions in Washington have unfolded as global chip shortages have hindered automobile manufacturers and other industries.
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