Billions for Chip Industry

Biden wins GOP support for measure to create high-tech jobs and compete with China
By Newser Editors and Wire Services
Posted Jul 28, 2022 5:35 PM CDT
Congress Passes Aid for Chip Production
President Biden speaks virtually during an event in the South Court Auditorium on the White House complex in Washington, Monday, July 25, 2022. Biden, who continues to recover from his coronavirus infection, spoke virtually with business executives and labor leaders to discuss the Chips Act, a proposal...   (AP Photo/Susan Walsh)

(Newser) – The House on Thursday passed a $280 billion package to boost the semiconductor industry and scientific research in a bid to create more high-tech jobs in the US and help it better compete with international rivals, namely China. The House approved the bill by a solid margin of 243-187, sending the measure to President Biden to be signed into law and providing the White House with a major domestic policy victory. About two dozen Republicans voted for the legislation, the AP reports. Before the vote, Biden said it would give the US "the ability not only to compete with China for the future, but to lead the world and win the economic competition of the 21st century."

Republicans argued the government should not spend billions to subsidize the semiconductor industry, and GOP leadership in the House urged votes against the bill, telling members the plan would provide enormous subsidies and tax credits "to a specific industry that does not need additional government handouts." Republican Rep. Guy Reschenthaler said the way to help the industry would be through tax cuts and easing federal regulations, "not by picking winners and losers" with subsidies—an approach that Democratic Rep. Joseph Morelle said was too narrow. "This affects every industry in the United States," he said.

"Take, for example, General Motors announcing they have 95,000 automobiles awaiting chips," Morelle added. "So, you want to increase the supply of goods to people and help bring down inflation? This is about increasing the supply of goods all over the United States in every single industry." Some Republicans viewed passing the legislation as important for national security, per the AP. Rep. Mike McCaul, the top Republican on the House Foreign Affairs Committee, said it was critical to protect semiconductor capacity in the US, which he said was too reliant on Taiwan for the most advanced chips. That could prove to be a major vulnerability should China try to take over the self-governing island that Beijing views as a breakaway province.

(Read more computer chip stories.)

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