Politics & Policy

Senate Passes Bill to Counter and Compete with China

(Jim Young/Reuters)

The Senate passed sweeping legislation Tuesday designed to counter and compete with China’s growing power by investing more than $200 billion over the next five years into scientific research and technology.

The bill, called the U.S. Innovation and Competition Act (USICA), was supported by both Republicans and Democrats in the chamber in a 68-32 vote to bolster funding for emerging industrial sectors, namely semi-conductors. The bipartisan approval of the measure signaled that both parties are prioritizing matching the authoritarian Chinese regime’s growing influence on the international stage. It shows a Republican shift from the free-market, anti-government intervention in the economy stance to support of an industrial policy to bolster U.S. efforts to compete with China.

The legislation would allocate $52 billion for a subsidy program into semi-conductor manufacturers in an effort to bolster the industry. Funding would also go to fostering collaboration between private firms and research universities nationwide to promote scientific discovery and development.

Independent Senator Bernie Sanders of Vermont, a member of the Democratic caucus, rejected the bill, while 19 Senate Republicans voted to adopt it. Democratic Senate Majority Leader Chuck Schumer co-sponsored and spear-headed the legislation alongside Republican Senator Todd Young and lobbied members aggressively to enact it. Schumer commented that the competition bill “will supercharge American innovation and preserve our competitive edge for generations to come” in the geo-political race against China.

“When future generations of Americans cast their gaze toward new frontiers, will they see a red flag planted on those new frontiers that is not our own?” Young said on the chamber floor. “Today, we answer unequivocally, ‘No.’ Today we declare our intention to win this century, and those that follow it as well.”

“When all is said and done, the bill will go down as one of the most important things this chamber has done in a very long time. …We can concede the mantle of global leadership to our adversaries or we can pave the way for another generation of American leadership. That is what this bill is about,” Schumer said.

China has been accused of repeatedly stealing intellectual property (IP) from the United States, with many recorded episodes of illicit technology transfer between U.S. companies and Chinese agencies or state-owned enterprises. The Chinese government has demonstrated that technological acquisition, and undermining American technology, is part and parcel with its grand strategy to secure global dominance. The U.S. Trade Representative estimated in 2018 that Chinese theft of American IP costs U.S. firms between $225 billion and $600 billion every year.

Now that the competition bill has advanced through the Senate, it moves on to the House, which is expected to host a more partisan debate, before it arrives at President Biden’s desk for his signature.

Some Republican lawmakers had expressed apprehensions about the bill’s contents and proposed amendments to address their concerns, delaying passage. Minority Leader Mitch McConnell vowed that many Republicans would block the legislation unless the amendments received more votes. Before the bill passed Tuesday in the Senate, McConnell claimed that it was “incomplete,” not tough enough on Beijing, and that Schumer passed it prematurely.

McConnell did note, however, that the bill’s success so far is a testament to the Senate’s proper functioning. “One thing this legislation did demonstrate extremely well, however, was that the rules of the Senate don’t stand in the way of bipartisan legislating,” he said.

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