WASHINGTON (AP) — The Senate on Tuesday introduced a $280 billion bill aimed at boosting the semiconductor industry in the United States and accelerating high-tech research that supporters say will happen in the United States will be of crucial importance for the economy in the coming decades.
The Senate needed 60 votes to move the bill forward, and the vote was 64-32. The legislation is now on a glide path to final passage in the Senate later this week. The house is also expected to pick up the package this week.
The White House has spearheaded support for the bill, along with industry leaders who say government subsidies are necessary to compete with other nations that are also spending billions of dollars to lure manufacturers. They say the pandemic has exposed the dangers to the economy and national security of over-reliance on foreign-made computer chips.
The bill provides about $52 billion in grants and other incentives for the semiconductor industry and a 25 percent tax credit for companies that build chip fabs or factories in the United States. The cost of the tax break is estimated to be around $24 billion over 10 years. The bill also authorizes about $200 billion to improve scientific research over the same period.
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The Congressional Budget Office has projected that the law would increase deficits by about $79 billion over 10 years. Critics have dismissed the spending required by the bill as either inappropriate or excessive.
“Let’s get our priorities right at a time when this country’s working families are falling further behind while the very rich are getting richer,” said Senator Bernie Sanders, I-Vt.
But the bill was backed by lawmakers from both parties, who say the investment is vital to US innovation and stays a step ahead of economic rivals, namely China, in the coming decades.
“I firmly believe that the passage of this legislation will mark a turning point for American leadership in this century,” said Senate Majority Leader Chuck Schumer, D-N.Y. “The benefits of this legislation will reverberate across the country for years and decades to come.”
Republican Senate leader Mitch McConnell led a group of 17 Republican senators who voted to limit debate and move the bill forward. While some Republicans have raised concerns about spending in the bill, others have stressed the need to plug national security gaps resulting from the US’ reliance on factories in Taiwan and South Korea for the most advanced computer chips.
“We’re not used to offering companies these kinds of financial incentives, but when it costs 30 percent less to build these manufacturing facilities across the seas in Asia and our access to that supply chain is potentially compromised by very real threats, it is a necessary investment we need to make,” said Sen. John Cornyn, R-Texas.
