The largest GOP caucus in the House of Representatives urged its members to oppose the multi-billion dollar Bipartisan Innovation Act, unless significant changes are made to the legislation during an upcoming round of bipartisan negotiations.
Representative Jim Banks, the Republican Study Committee’s chairman, argued that the massive industrial-policy bill would hinder U.S. efforts to counter the Chinese Communist Party. Banks and the RSC instead advocate an approach more focused on malign Chinese activities and on boosting U.S. spending on defense and law enforcement.
Although proponents of the legislation say that the bill is intended to turbocharge U.S. competitiveness against China, critics have argued that the package is more of a massive industrial-policy measure than it is an effort to shore up the U.S. effort to compete with China.
“Senate and House conferees are starting to negotiate a final version of Democrats’ fake China bill. As written, both the Senate and the House versions harm the United States and help China,” wrote Banks today in a memo to RSC members, which was obtained exclusively by National Review.
Banks and the RSC led messaging campaigns against those bills, the most relevant aspect of which could be the RSC’s Countering Communist China Act. That bill could be a hallmark GOP proposal if Republicans win the House in November.
The bill initially passed the Senate last year on a bipartisan basis, and the House passed a different, broader version of the package on a near-party-line vote in February. Earlier this month, congressional leaders appointed dozens of lawmakers to a bicameral committee that will produce a final version.
That $252 billion Senate-approved proposal mostly comprised a massive injection of funding into National Science Foundation research on critical, emerging technologies and $52 billion in subsidies for semiconductor chip manufacturers.
The House bill, like its Senate counterpart, features a number of provisions on critical technology research and semiconductor funding. It includes a bevy of other noteworthy provisions addressing outbound investment flows to China, the processing of asylum seekers escaping the Chinese Communist Party’s rule, and, to the chagrin of House conservatives, climate change.
President Biden and other top officials have leaned on the administration’s allies in Congress to move swiftly to pass a version reconciling the two texts sometime over the next several weeks.
“We have a great opportunity ahead of us, with the Bipartisan Innovation Act I mentioned, which is going to provide 90 billion dollars in research and development. STEM education, manufacturing, all those elements of the supply chain that we need to produce and products right here in America,” he said last week, during a speech in North Carolina.
Banks and other conservatives argue that this approach is wasteful — and detrimental to U.S. national security.
The RSC takes issue with the fact that while the current text of these bills allocate tens of billions of dollars to research initiatives and certain industries, it includes no measures to protect the research products that result from being transferred to Chinese party-state entities.
Banks and the RSC also say that the House and Senate-passed proposals don’t provide adequate funding to defense initiatives and government offices that play a more direct role in U.S. national-security work.
“Despite the price tag, both bills provide very little funding for law enforcement, export controls, or sanctions enforcement to hold China accountable,” the memo reads. “While the House bill contained an RSC amendment authorizing the expansion of the Office of Foreign Asset Control (OFAC) staff to enforce China sanctions, and both bills included new funding for Custom and Border Patrol (CBP)’s forced labor division, there is very little in either bill to support law enforcement priorities.”
The RSC points to the inclusion of language that advances the “Left’s Diversity and Climate Priorities,” such as the Senate bill’s creation of a diversity directorate within the NSF and both bills’ provisions on climate. The top Republican on the House Foreign Affairs Committee, Michael McCaul, has been critical of the House bill’s multi-billion dollar grant to a U.N. climate fund.
The RSC is also harshly critical of the way in which the legislation is expected to award semiconductor subsidies.
“Neither bill includes sufficient guardrails for the over $50 billion in subsidies to semiconductor companies under the CHIPS Act that would prevent the subsidies from going to chip companies that are expanding their business in China,” the memo states.
Biden specifically cited Intel as one company that is poised to reinvigorate its operations in the U.S., as a result of the subsidies, in his recent speech. But while Intel has also earned bipartisan acclaim for investing in new plants in Ohio last year, its CEO, Pat Gelsinger, has repeatedly defended the company’s growing footprint in China.