WASHINGTON (AP) – The Senate on Tuesday introduced a $280 billion bill designed to boost the U.S. semiconductor industry and accelerate high-tech research that backers say will be crucial to the economy for decades to come.
The Senate needed 60 votes to advance the bill, and the vote was 64-32. The legislation is now headed for final passage in the Senate later this week. The house is also expected to receive the package this week.
The White House has led support for the bill along with industry leaders who say government subsidies are needed to compete with other nations that also spend billions of dollars to lure manufacturers. They say the pandemic has exposed the dangers to the economy and national security of relying too heavily on foreign-made computer chips.
The bill provides about $52 billion in subsidies and other incentives to the semiconductor industry, as well as a 25 percent tax credit for companies that build chip plants or factories in the United States. The cost of the tax break is expected to be about $24. billion over 10 years. The bill also authorizes about $200 billion to improve scientific research within the same time frame.
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The Congressional Budget Office has projected that the bill would increase the deficit by about $79 billion over 10 years. Critics have objected to the spending called for in the bill as either misplaced or excessive.
“At a time when working families in this country are falling further and further behind, while the very rich are getting much richer, let’s get our priorities right,” said Sen. Bernie Sanders, I-Vt.
But the bill drew support from lawmakers in both parties who say the investment is critical to American innovation and to staying ahead of economic rivals China for decades to come.
“I am convinced that the passage of this bill will be 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.”
Senate Republican Leader Mitch McConnell led a group of 17 Republican senators who voted to limit debate and advance the bill. While some Republicans have expressed concern about the bill’s spending, others have stressed the need to address national security vulnerabilities stemming from America’s reliance on factories in Taiwan and South Korea for the most advanced computer chips.
“We’re not used to giving these kinds of financial incentives to companies, but when it costs 30 percent less to build these manufacturing facilities across the oceans in Asia, and our access to that supply chain is potentially threatened by very real threats, it’s a necessary investments for us to make,” said Sen. John Cornyn, R-Texas.
