Innovation bill drama threatens billions for DOE, science

House and Senate lawmakers are teaming up on a watered-down version of the innovation and economic competitiveness package that has been stalled in intercameral negotiations.

There is broad agreement that $52 billion in spending to support the domestic semiconductor manufacturing industry should form the basis of the measure. The addition to the “Creating Beneficial Incentives for Semiconductor Manufacturing (CHIPS) for America Act” is called “CHIPS-plus.”

But lawmakers still aren’t clear on what the full package should look like. And that uncertainty leaves tens of billions in permitting costs for the Department of Energy and the National Science Foundation up in the air.

“People are just trying to figure out how to proceed,” Senate Commerce Chairwoman Maria Cantwell (D-Wash.) told reporters yesterday. “Obviously they’re looking at the calendar and looking at what needs to happen.”

Those details, along with disagreements over when to schedule a vote on the package, have lawmakers scrambling to meet the Biden administration’s deadline to pass a bill before the long summer recess.

Commerce Secretary Gina Raimondo said as much in two briefings this week, where she urged lawmakers to prioritize semiconductor spending to ensure the nation doesn’t lose out to other nations that want to locate manufacturing facilities within their borders.

The Pentagon threw in its hat yesterday. Defense Secretary Lloyd Austin cited $150 billion in investment from China in pushing for adoption of the semiconductor language. In a statement, he said the bill “directly supports our national defense” and is “critical to our national security.”

House leadership appears to have gotten the message, though Democrats insist that any measure must include House-backed provisions to reauthorize research and development.

“That’s what we’re more interested in,” House Speaker Nancy Pelosi (D-Calif.) told reporters about her preference for offering a comprehensive CHIPS-plus package instead of a stand-alone bill.

“We’re working all the time on the CHIPS bill, and we need to have the transformative nature of research, education and everything else to continue to be world-leading… We’ll see. But we are determined to pass the bill.”

The House bill, HR 4521, the America Competes Act, would provide about $120 billion to DOE and NSF or to develop technologies considered critical to the 21st century economy. The Senate version, S. 1260, the “American Innovation and Competition Act,” would direct $17 billion to DOE and nearly $100 billion to NSF (E&E DailyJune 14).

Advocates of the research portion of the bill argued that much of the hard work to iron out disparities in research and development is nearing completion. They also claimed to have bipartisan support to help solve a national security problem.

“We also need to advance those things that have already been agreed upon or are closed or are in the process of being agreed upon that have national security implications,” said Sen. Todd Young (R-Ind.), the chief negotiator on the package. .

“It seems to me that there will be a lot of bipartisan support behind advancing the Commerce title, which in particular has research and development funds for things like hypersonics and quantum computing,” he added.

Votes next week?

Senate Republicans, led by Minority Leader Mitch McConnell (R-Ky.), have threatened to derail any potential bipartisan deal if Democrats continue to pursue a separate reconciliation package focused on prescription drugs and clean energy.

Despite those threats, Republicans appear poised to offer a scaled-down package focused on semiconductor spending. But even with that blessing, Republicans are scoffing at whether they would support a vote on the CHIPS-plus bill as early as next week.

Majority Leader Chuck Schumer (DN.Y.) has floated the possibility of a vote on Tuesday to begin consideration of the bill in the Senate — regardless of its shape over the weekend.

“Some people on the other side want to stop reconciliation, so they’re trying to hold this hostage to do that, and we think that’s wrong,” Cantwell said. “Obviously, this is such an important matter of national security that we need to vote.

Republicans aren’t so sure.

“Not next week,” said Sen. John Cornyn (R-Texas). “I think before we leave for August break, yes.”

He added: “Senator Schumer for some reason wants to try to silence him next week. I think that’s a big mistake and it creates conflict where there really, probably isn’t any.”

Minority Whip John Thune (RS.D.) noted that Democrats also need to piece together legislation to pass the House, where leadership is skeptical of simply passing the Senate bill.

“They have to have an agreement on their side and they also have to have a product that can pass in the House,” Thune said. “We’ve always said that the ideal solution would be for them to just take the Senate-passed bill to the House and move it over there, but apparently they’re not interested in that.”

Reporter Nick Sobczyk contributed.

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