House approves $52 billion for chips, teeing up for Biden to sign into law

Riley Beggin
The Detroit News

Washington — The U.S. House approved $52 billion in subsidies and $24 billion in tax credits for the computer chip industry Thursday, despite fierce opposition from Republican leadership incensed by a last-minute Democratic maneuver Wednesday night.

The bill, which passed 243-187, will now head to President Joe Biden, who has said he plans to sign it. Among the yes votes were 24 Republicans, among them Michigan Reps. Peter Meijer and Fred Upton.

It marks a major win for the automotive industry, which has struggled for the last two years under a global shortage of chips, and for national security advocates who say the U.S. is falling behind its chief economic rival, China.

In addition to the chip funding, the legislation authorizes $100 billion over five years for research programs through the National Science Foundation.

Modern cars rely on chips to roll down windows, power infotainment systems and support steering. Electric vehicles require even more chips. Automakers had to cancel shifts and store vehicles until enough chips were available to sell them, contributing to the skyrocketing prices of new and used vehicles. 

Michigan Sens. Debbie Stabenow, D-Lansing, and Gary Peters, D-Bloomfield Township, pushed for a provision in the legislation that sets aside $2 billion for "legacy" chips used in autos. 

"The reality is we need to make more chips and we need to make them in America," Rep. Debbie Dingell, D-Ann Arbor, said on the House floor Thursday. "We're at an inflection point where we can and must cement U.S. leadership and keep America at the forefront of innovation and technology."

The bill was on track to receive bipartisan support from both chambers as many Republicans and Democrats agreed the funding was necessary to increase U.S. competitiveness and secure crucial supply chains. 

The U.S. Senate passed it Wednesday with the support of 14 Republicans.

But just hours after the vote closed, Sen. Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer of New York announced they had reached a deal on a climate, energy, pharmaceutical and tax package — surprising many members of their own party and Republicans, who had threatened to withhold support for the chips bill if Democrats moved ahead with a party-line climate package through reconciliation. 

Passing the chips bill before announcing a deal on the climate package allowed Democrats to clear the former through the evenly-divided Senate and move on to the House, where they enjoy a more comfortable majority. 

Republican leaders in the House promptly reversed their plans not to actively oppose the legislation, urging their caucus to vote no on "government handouts" to the semiconductor industry.

"Do you want Republicans to vote for legislation in a bipartisan way when you play games like this?" Rep. Rodney Davis, R-Illinois, asked on the House floor Thursday. "Don't be surprised when there's a lot of no's popping up on the board today for a piece of legislation that I think a lot of Republicans would normally support."

Meijer, who voted in favor of the bill, wrote on Twitter that "China hates this bill" because it will boost domestic production of advanced chips and increase U.S. competitiveness: "I was more than happy to stand against the Chinese Communist Party today."

Other opponents of the chips funding, including Sen. Bernie Sanders, I-Vermont, also argued earlier this week that the chip industry already brings in big profits and doesn't need government support. 

Proponents of the legislation on both sides of the aisle argued that other countries are offering lavish incentives for chip companies to build there, and that the U.S. is missing out on important investment if they don't compete with those offerings. 

Biden released a statement shortly after the bill passed Thursday saying it will make cars, appliances and computers cheaper and create manufacturing jobs. 

"The CHIPS and Science Act is exactly what we need to be doing to grow our economy right now," he said. "By making more semiconductors in the United States, this bill will increase domestic manufacturing and lower costs for families."

Business, environmental and labor groups also praised the chips funding. 

"We applaud this bipartisan effort to transform the United States’ advanced manufacturing industry," said Joe Britton, executive director of the Zero Emission Transportation Association, which advocates for policies that advance electric vehicle production. 

"Investing in these 21st-century technologies will help level the playing field between the United States and our global competitors, giving innovative U.S. entrepreneurs the opportunity and supply chains they need to innovate."

rbeggin@detroitnews.com

Twitter: @rbeggin