The global supply chain backlog that is negatively affecting the United States’ supply and production of semiconductors, exacerbating the record-high inflation rate and dragging down the U.S. economy, could be ameliorated by passage of a bill in Congress that has broad bipartisan support.
The White House and leaders in both parties should pass it now. Instead, the bill is wrapped up in partisan bickering and a needless debate over tax increase and drug price control proposals that are putting one of the most important domestic policy needs at tremendous risk.
The U.S. Senate more than one year ago passed the U.S. Innovation and Competition Act, or USICA, by a wide margin. Among its several provisions meant to increase U.S. economic competitiveness with China, the bill contained $52 billion in funding for the CHIPS Act, previously passed legislation to spur domestic production of semiconductors, those marvels of microengineering that are in everything from consumer electronics to kitchen appliances to automobiles.
The House passed its own version of a China competitiveness bill earlier this year, and it too contained $52 billion in CHIPS Act funding. But the House version wasn’t an exact mirror of the Senate version. In fact, it passed on a mostly party-line, with only one Republican voting in favor, and it contained various progressive policy priorities on things like labor and the environment.
Hashing out the differences between those two bills requires a conference committee and the arduous work of negotiating a compromise final product between the House and Senate that can pass both chambers.
But here’s where we end up in a cul-de-sac of frustration. The conference committee contains more than 100 members. Imagine negotiating one of this Congress’ most important bills with that many members of Congress. House progressives aren’t going to drop the priorities they won simply to speed up the negotiation, just as Senate Minority Leader Mitch McConnell isn’t going to give up his ability to threaten a filibuster if the bill becomes a vehicle to advance pet causes of the political left.
Things got even more complicated in the last several weeks with word that Senate Majority Leader Chuck Schumer and moderate Democratic Sen. Joe Manchin of West Virginia were negotiating the revival of a slimmed down Build Back Better bill, the multi-trillion-dollar legislation that Manchin and Arizona Sen. Kyrsten Sinema torpedoed last December because it was chock-full of bad policy.
This new version might be smaller in scope, but it’s just as damaging in its impact. Schumer is proposing a tax on so-called “pass-through” businesses, which are small businesses whose revenue passes through to the owner’s tax return and are taxed at the individual rate rather than the corporate rate. And he’s angling for a drug price control scheme that will do little to help the American seniors he claims to want to help because it will discourage pharmaceutical manufacturers’ lifechanging and lifesaving innovations. The latest reports are that Manchin won’t support the tax hike but remains open to the drug pricing plan.
The new version won’t attract a single Republican vote, which means Schumer will have to attempt to move the bill under his chamber’s strict reconciliation rules that allow a bill to pass with a simple majority rather than the 60 votes that are required to cut off a filibuster.
This is a bad bet by Schumer. If he attempts to jam through a partisan bill, then Republicans have threatened to tank the China competitiveness bill and the billions in semiconductor funding.
As she watches an administration priority lurch into a ditch, Commerce Sec. Gina Raimondo is urging senators to separate the CHIPS funding and pass it as a standalone bill, sounding the alarm that companies are counting on the bill’s passage and its $10 billion in Investment Tax Credits.
States like Arizona know Raimondo is right. The semiconductor sector, which is making billions in investments here and creating thousands of jobs, is too valuable to our overall economy and national security to fall prey to a partisan play to control drug prices.
There are vanishingly few legislative workdays left in 2022. There’s a fast-approaching August recess, and little work will be accomplished in the weeks leading up to the November election.
Sen. Sinema in 2021 prevented a bad bill from passing and doing real damage. She and Sen. Mark Kelly can stop another bad bill in 2022. They and their colleagues should use the year’s remaining legislative days to drop drug price control proposals and retrain their focus on passing the broadly supported semiconductor legislation.
Original source can be found here.
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