House Passes Bill Adding Billions to Research to Compete With China

The vote sets up a fight with the Senate, which has different recommendations for how the United States should bolster its technology industry to take on China.

House Passes Bill Adding Billions to Research to Compete With China |

Workers at a semiconductor factory in Beijing in 2020. The renewed push for the legislation is supposed to tackle persistent supply chain woes and inflation, which have been fueled by semiconductor shortages.

WASHINGTON — The House on Friday passed legislation that would pour nearly $300 billion into scientific research and development and shore up domestic manufacturing, setting up a dispute with the Senate over how best to invest in scientific innovation to strengthen American competitiveness and counter China.

The 222-210 vote on the sprawling, 2,900-page legislation was part of a renewed push by the Biden administration and Democrats on Capitol Hill to salvage stalled industrial policy legislation and tackle persistent supply chain woes and inflation, which have been fueled by semiconductor shortages.

Among other things, it would provide $52 billion in grants and subsidies for semiconductor makers and $45 billion in grants and loans to support supply chain resilience and American manufacturing. If enacted, the legislation would be the most expansive attempt yet by the United States to take on China with a substantial role for the government in boosting technological advances and industrial growth.

In a news conference on Friday morning, Speaker Nancy Pelosi of California said the bill would ensure that the United States remained pre-eminent in manufacturing, innovation and economic strength and could “outcompete any nation.”

“This bill that we’re talking about today is a jobs bill,” Ms. Pelosi said. “A jobs bill for manufacturing in America, making it in America.”

The measure passed nearly along party lines with most Republicans opposed, arguing the bill was inadequately tough on Beijing and that it was loaded with too many extraneous provisions, including funding for marine mammal research and efforts to conserve coral reefs.

Representative Kevin McCarthy, Republican of California and the minority leader, said the bill showed that Democrats were prioritizing welfare and climate change over real efforts to compete with China.

“It wastes billions of dollars on unrelated matters and includes no measures to make China pay for the chaos they created,” he said.

It has little chance of enactment in its current form, given disputes between the House and the Senate, which passed a version last year with bipartisan support. Administration officials have called for Congress to swiftly negotiate and send a compromise bill to President Biden’s desk, but there are deep ideological differences between the two chambers over how punitive to be against China and how to fund scientific research.

House Democrats have argued that the Senate bill is overly prescriptive in allocating funding to specific fields of cutting-edge technology, such as artificial intelligence and quantum computing. Their bill, which places few stipulations on the new round of funding for scientific research, places a greater emphasis on increasing fundamental research in many areas, especially climate change.

“We are acting to address the critical needs identified by the scientific community, industry, academia and other stakeholders as what they need most to succeed in the 21st century,” said Representative Eddie Bernice Johnson, Democrat of Texas and the chairwoman of the Science Committee.

Because both the House and Senate bills are so wide-ranging, there will be no shortage of issues for lawmakers to spar over. Those provisions include a House-driven effort to make it harder for Chinese companies to import cheap goods into the United States duty-free, and a Senate-driven effort to reinstate previously granted exclusions to tariffs that former President Donald J. Trump placed on China.

The provision that has so far garnered the most bipartisan support is the money for chip manufacturers, a measure that semiconductor companies like Intel say will increase the attractiveness of investing in the United States.

But many Republicans, some of whom had previously approved certain portions of the bill in committee or on the House floor, said they could not support the larger legislation with so many additional measures that they considered extraneous.

Understand U.S.-China Relations

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A tense era in U.S.-China ties. The two powers are profoundly at odds as they jockey for influence beyond their own shores, compete in technology and maneuver for military advantages. Here’s what to know about the main fronts in U.S.-China relations:

Pacific dominance. As China has built up its military presence, the U.S. has sought to widen its alliances in the region. A major potential flash point is Taiwan, the democratic island that the Communist Party regards as Chinese territory. Should the U.S. intervene there, it could reshape the regional order.

Trade. The trade war started by the Trump administration is technically on pause. But the Biden administration has continued to protest China’s economic policies and impose tariffs on Chinese goods, signaling no thaw in trade relations.

Technology. Internet giants have mostly been shut out of China, but plenty of U.S. tech companies still do big business there, raising cybersecurity concerns in Washington. Mr. Xi has said China needs to achieve technological “self-reliance.”

Human rights. Under Mr. Xi, China’s confrontations with the U.S. over values and freedoms have become more frequent, including standoffs over Beijing’s crackdown on pro-democracy protests in Hong Kong and mass detentions of Muslims in Xinjiang.

World leadership. China’s leaders see signs of American decline everywhere and they want a bigger voice in global leadership, seeking a greater role in Western-dominated institutions and courting allies that share their frustration with the West.

“This is a missed opportunity to spur momentum on a proactive trade agenda, protect American and strengthen American innovation, and alleviate some of the supply chain and work force pressures our nation is facing,” said Adrian Smith, a Republican from Nebraska.

Many of the foreign policy measures added by Democrats to the House bill are focused on climate change, and other provisions are written as symbolic affirmations, rather than binding legislation, or mirror measures already passed by Congress. It would authorize $225 million over five years to bolster the State Department’s military training and education programs in the Indo-Pacific region.

Other House Republicans argued that in trying to counter China’s chokehold on the global supply chain, the legislation went too far in trying to copy Beijing’s approach to industrial policy.

“I know that Democrats want to say this is a competitive bill, but it’s taking a page out of China’s playbook,” said Representative Cathy McMorris Rodgers of Washington, the top Republican on the Energy and Commerce Committee. “It’s trying to outspend China. China has a centralized, industrial policy. China picks winners and losers based upon political allies.”

That argument — that lawmakers should not be in the business of picking “winners and losers” — has long kept Republicans from endorsing significant government intervention in industrial policy. But an increasing number of Senate Republicans in recent years have shown more interest in supporting such investments, contending that government subsidies for sectors such as semiconductors were necessary to compete with China.

The Senate bill that passed in June, which stands at 2,400 pages, would pour nearly a quarter-trillion dollars over the next five years into scientific research and development to bolster competitiveness against China.

Some lawmakers in the Senate, wanting to prop up research initiatives in their states, successfully shifted much of the $100 billion that had been slated for a research and development hub for emerging technologies at the National Science Foundation to basic research, as well as laboratories run by the Energy Department.


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