"Chips update". Promising news about the future of chip manufacturing in the US. Congress might act! Might. This from "Punchbowl News" - a worthy yet wonky recap of what is happening in DC - reports from those that are talking to the movers and shakers.
WHAT YOU SHOULD BE FOCUSED ON
Deep Dive: USICA
As Congress returns from its two-week recess, the House and Senate will begin negotiations to finalize a deal on far-reaching China competitiveness legislation known by a variety of names, including USICA, the “Endless Frontier Act,” the “America COMPETES Act” and the Bipartisan Innovation Act.
We expect action in the Senate as soon as this week to formalize the chamber’s conferees to officially negotiate on the final package. While there have been some discussions between aides for Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell during the two-week break, those talks will really pick up when the Senate returns.
The two leaders need to reach an agreement on votes on motions to instruct the conferees before moving forward. These motions, which are non-binding, ostensibly provide instructions for the conference negotiations. But in reality, they’re used to make senators, particularly those in tough reelection campaigns, take hard votes. The votes to instruct conferees must take place before the Senate actually appoints these senators, although both leaders have already declared who they plan to appoint.
Our main takeaway from conversations with lawmakers and staff from both sides is that everyone wants a deal. There’s not an adversarial tone between Senate Democrats and Republicans closely involved with this bill, at least not right now. Even as leaders negotiate around the motions to instruct, both sides seem more focused on presenting a united front as they enter into talks with the House.
This is a rare moment. The package falls under the jurisdiction of multiple committees. There are more than 100 conferees combined from both chambers, with tens of billions of dollars at stake amid a frenzy of lobbying activity. The conference negotiations will be a complex process, to say the least.
Everyone is tracking this closely, from K Street to the White House to big corporations whose business models would be significantly impacted by the legislation. Also notable: it’s likely the best chance for a big bipartisan bill passing before the midterms that doesn’t involve Ukraine. There’s a possibility that insulin pricing, Electoral College reform and Big Tech antitrust bills get through, but the clock is ticking on all of these and it’s almost May. This proposal is much further down the line and has momentum.
Overall, a final bill will likely be far closer to the Senate product than the House product. Remember — the Senate passed USICA on a big bipartisan vote last year. The House passed their version, the America COMPETES Act, in February with Rep. Adam Kinzinger (Ill.) as the sole Republican supporter.
House aides point out that their bill is made up of key components from more than a dozen pieces of legislation that previously received overwhelming bipartisan support. But the Senate’s negotiating position right now is united — and as a result stronger — than the divided House.
The safe bets:
→ The roughly $52 billion in funding for the CHIPS Act will almost certainly be in the final bill, aides familiar with the negotiations told us. Democrats and Republicans alike hail the push to incentivize domestic semiconductor chip manufacturing. This is, by far, the most popular provision in the package. Big corporations including IBM and Intel, as well as the Semiconductor Industry Association, are all lobbying hard for the CHIPS Act.
Crucially, both the House and Senate bills contain roughly the same dollar figure for semiconductor-manufacturing support.
The hang ups:
→ Trade policy. The biggest differences between the House and Senate bills are on trade issues. Watch this space closely; there’s a lot of work to be done to bridge the divides here.
An expansion of Trade Adjustment Assistance. A program providing benefits to U.S. workers harmed by globalization is included in the House bill. However, the Senate version doesn’t mention TAA reauthorization at all. This will be a struggle to get support among House and Senate Republicans.
Tariffs directly aimed at China. Section 301 exclusions previously granted by the U.S. Trade Representative are reinstated under the Senate’s USICA bill. There’s not a comparable provision in the House bill. The business community is lobbying heavily to get these exclusions extended, allowing more U.S. companies to get around the tariffs.
Outbound Investment Screening. A provision in the House bill would task USTR with reviewing large investments in China and other countries for national security implications. This was excluded from the Senate product due to a lack of support. Some critics believe it’s applying too broad a brush for a targeted problem. Expect the issue to be a big topic of discussion during the bicameral negotiations.
The Office of Manufacturing Security and Resilience. In both the House and Senate bills, there’s support for an office to monitor supply chains and provide financial support to strengthen these commercial networks. The House bill provides $46 billion in funding, while the Senate version doesn’t have any. There’s general agreement that the office is needed, but the hangup will be how much it costs.
→ National Science Foundation funding. The treatment of the NSF was one of the major differences between the House and Senate bills. Differences include how much to funnel to the foundation and what its responsibilities would be. While our sources stressed these differences would be far easier to bridge than the disputes over trade provisions, crucial differences still remain.
The no-gos:
→ Climate change provisions. The House-passed America COMPETES Act featured billions of dollars to assist developing countries in countering the effects of climate change. This has little realistic chance of making it into the final package due to GOP opposition.
→ Immigration provisions. The House bill also included immigration reforms that would provide more visas for entrepreneurs and a path to permanent residence for immigrants who attain a Ph.D. in a STEM field while in the United States. Republican aides involved in negotiations say these are a definite no-go in the current political environment.
"Chips update". Promising news about the future of chip manufacturing in the US. Congress might act! Might. This from "Punchbowl News" - a worthy yet wonky recap of what is happening in DC - reports from those that are talking to the movers and shakers.
WHAT YOU SHOULD BE FOCUSED ON
Deep Dive: USICA
As Congress returns from its two-week recess, the House and Senate will begin negotiations to finalize a deal on far-reaching China competitiveness legislation known by a variety of names, including USICA, the “Endless Frontier Act,” the “America COMPETES Act” and the Bipartisan Innovation Act.
We expect action in the Senate as soon as this week to formalize the chamber’s conferees to officially negotiate on the final package. While there have been some discussions between aides for Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell during the two-week break, those talks will really pick up when the Senate returns.
The two leaders need to reach an agreement on votes on motions to instruct the conferees before moving forward. These motions, which are non-binding, ostensibly provide instructions for the conference negotiations. But in reality, they’re used to make senators, particularly those in tough reelection campaigns, take hard votes. The votes to instruct conferees must take place before the Senate actually appoints these senators, although both leaders have already declared who they plan to appoint.
Our main takeaway from conversations with lawmakers and staff from both sides is that everyone wants a deal. There’s not an adversarial tone between Senate Democrats and Republicans closely involved with this bill, at least not right now. Even as leaders negotiate around the motions to instruct, both sides seem more focused on presenting a united front as they enter into talks with the House.
This is a rare moment. The package falls under the jurisdiction of multiple committees. There are more than 100 conferees combined from both chambers, with tens of billions of dollars at stake amid a frenzy of lobbying activity. The conference negotiations will be a complex process, to say the least.
Everyone is tracking this closely, from K Street to the White House to big corporations whose business models would be significantly impacted by the legislation. Also notable: it’s likely the best chance for a big bipartisan bill passing before the midterms that doesn’t involve Ukraine. There’s a possibility that insulin pricing, Electoral College reform and Big Tech antitrust bills get through, but the clock is ticking on all of these and it’s almost May. This proposal is much further down the line and has momentum.
Overall, a final bill will likely be far closer to the Senate product than the House product. Remember — the Senate passed USICA on a big bipartisan vote last year. The House passed their version, the America COMPETES Act, in February with Rep. Adam Kinzinger (Ill.) as the sole Republican supporter.
House aides point out that their bill is made up of key components from more than a dozen pieces of legislation that previously received overwhelming bipartisan support. But the Senate’s negotiating position right now is united — and as a result stronger — than the divided House.
The safe bets:
→ The roughly $52 billion in funding for the CHIPS Act will almost certainly be in the final bill, aides familiar with the negotiations told us. Democrats and Republicans alike hail the push to incentivize domestic semiconductor chip manufacturing. This is, by far, the most popular provision in the package. Big corporations including IBM and Intel, as well as the Semiconductor Industry Association, are all lobbying hard for the CHIPS Act.
Crucially, both the House and Senate bills contain roughly the same dollar figure for semiconductor-manufacturing support.
The hang ups:
→ Trade policy. The biggest differences between the House and Senate bills are on trade issues. Watch this space closely; there’s a lot of work to be done to bridge the divides here.
An expansion of Trade Adjustment Assistance. A program providing benefits to U.S. workers harmed by globalization is included in the House bill. However, the Senate version doesn’t mention TAA reauthorization at all. This will be a struggle to get support among House and Senate Republicans.
Tariffs directly aimed at China. Section 301 exclusions previously granted by the U.S. Trade Representative are reinstated under the Senate’s USICA bill. There’s not a comparable provision in the House bill. The business community is lobbying heavily to get these exclusions extended, allowing more U.S. companies to get around the tariffs.
Outbound Investment Screening. A provision in the House bill would task USTR with reviewing large investments in China and other countries for national security implications. This was excluded from the Senate product due to a lack of support. Some critics believe it’s applying too broad a brush for a targeted problem. Expect the issue to be a big topic of discussion during the bicameral negotiations.
The Office of Manufacturing Security and Resilience. In both the House and Senate bills, there’s support for an office to monitor supply chains and provide financial support to strengthen these commercial networks. The House bill provides $46 billion in funding, while the Senate version doesn’t have any. There’s general agreement that the office is needed, but the hangup will be how much it costs.
→ National Science Foundation funding. The treatment of the NSF was one of the major differences between the House and Senate bills. Differences include how much to funnel to the foundation and what its responsibilities would be. While our sources stressed these differences would be far easier to bridge than the disputes over trade provisions, crucial differences still remain.
The no-gos:
→ Climate change provisions. The House-passed America COMPETES Act featured billions of dollars to assist developing countries in countering the effects of climate change. This has little realistic chance of making it into the final package due to GOP opposition.
→ Immigration provisions. The House bill also included immigration reforms that would provide more visas for entrepreneurs and a path to permanent residence for immigrants who attain a Ph.D. in a STEM field while in the United States. Republican aides involved in negotiations say these are a definite no-go in the current political environment.