The House passed a $280 billion bill on Thursday to strengthen the domestic chip manufacturing industry and finance scientific research in a bid to boost the United States’s competitiveness on the global stage, sending the measure to President Biden’s desk for final approval.
The legislation, titled the CHIPS and Science Act, cleared the House in a 243-187-1 vote. Twenty-four Republicans supported the measure, and one Democrat voted present.
The Senate approved the measure in a bipartisan 64-33 vote on Wednesday, receiving support from Minority Leader Mitch McConnell (R-Ky.). The bill’s passage through both chambers marks a significant congressional achievement and the culmination of more than a year of negotiations over legislation to increase the U.S.’s competitive edge against China.
The House and the Senate initially each passed their own China competition bills, referred to as “America COMPETES” and “USICA,” respectively, but conference negotiations between the two chambers had stalled for weeks.
Lawmakers ultimately came to a consensus on the CHIPS and Science Act, which will allocate $54 billion for chips and public wireless supply chain innovation, including $39 billion that will go towards financial assistance to build, expand and modernize semiconductor facilities in the U.S. It also includes $11 billion for research and development by the Department of Commerce.
The measure seeks to establish a 25 percent tax credit for investment in semiconductor manufacturing and funnel $81 billion to the National Science Foundation (NSF), $20 billion of which will go towards an NSF directorate.
House Republican leadership revealed on Wednesday evening that it would whip against the bill, reversing from its position earlier in the day that it would not advise conference members on how to vote on the measure.
The about face came hours after Senate Majority Leader Charles Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) announced that they struck a $369 billion deal on a climate, taxes and health care package, capping off months of negotiations between Democrats.
Last month, McConnell warned his colleagues across the aisle that he would tank the domestic semiconductor bill if Democrats went ahead with a reconciliation package. Roughly two weeks later, Manchin said he would not get behind climate spending in a reconciliation package, significantly decreasing Democrats’ odds of approving a measure by the November midterm elections.
But shortly after the Senate passed the semiconductor bill, Manchin said he reached an agreement with Schumer on the reconciliation package, frustrating many Republicans in the House.
The whip memo referenced the reconciliation package and expressed concerns with the impact the measure would have on the deficit and inflation.