The House this week passed a landmark piece of legislation to support key components of the U.S. tech industry. It’s a boon for U.S. jobs and a boost for efforts to fight rising prices, via making critical components dealt with by the legislation more easily available through increased U.S. production.
The bill, once signed, was set to provide subsidies for the U.S. manufacturing of semiconductor chips, which are used in a variety of items, from automobiles to both medical and military equipment. The newly approved legislation also includes substantial quantities of support for domestic innovation in related areas. Republican leadership opted to push GOP House members to vote against the proposal in retaliation for the unveiling of a reconciliation deal in the Senate, where procedural rules mean Democrats can pass it without Republicans. That separate deal deals with initiatives in areas including climate and healthcare policy. Rep. Frank D. Lucas (R-Okla.), the top Republican on the House Science, Space and Technology Committee, said the chips legislation was “irrevocably tied to a massive tax hike and spending spree.” Besides the fact that’s a deceptive characterization of the Senate deal, it’s not even tied to it in some tangible sense.
Two dozen House Republicans ended up voting in favor of the chips legislation passed this week, with a total of 243 House members backing it. One Democratic member voted “present,” and there evidently weren’t any Democratic “no” votes. President Joe Biden hailed the passage of the bill in question as basically — among other ramifications of it — a major boost for the U.S. jobs market.
“Today, the House passed a bill that will make cars cheaper, appliances cheaper, and computers cheaper,” Biden commented. “It will lower the costs of every day goods. And, it will create high-paying manufacturing jobs across the country and strengthen U.S. leadership in the industries of the future at the same time. The CHIPS and Science Act is exactly what we need to be doing to grow our economy right now. By making more semiconductors in the United States, this bill will increase domestic manufacturing and lower costs for families. And, it will strengthen our national security by making us less dependent on foreign sources of semiconductors. This bill includes important guardrails to ensure that companies receiving tax payer dollars invest in America and that union workers are building new manufacturing plants across the country.”
Over the years, U.S. leadership in the manufacturing of semiconductor chips has dramatically fallen. At one point, the country produced some 40 percent of the world’s chips, but the level of U.S. production in the world’s total now stands at some 12 percent. Under the legislation, about $52 billion will support the domestic production of semiconductor chips. A shortage of these chips is among the reasons for recently increasing prices and struggles to keep certain critical supply chains running smoothly. Alongside other components of the legislation, there’s also about $100 billion to be spread over five years meant to support the National Science Foundation and (apparently tech-focused) start-ups in certain under-served areas. The legislation constitutes another significant jobs bill from Democrats and Biden’s administration alongside the much-discussed infrastructure package.