A sweeping, roughly $250 billion proposal to bolster US competitiveness with China has moved to the top of their legislative agenda, carrying policy and political benefits that tie directly to some of the most pressing issues President Joe Biden’s administration faces.
“We have momentum now, there’s no doubt about it — you can feel it,” Commerce Secretary Gina Raimondo, one of the administration’s point people on the bill, told CNN in an interview. “It’s a sea change in momentum.”
The White House is leading the effort, with the support of Senate Majority Leader Chuck Schumer and Speaker Nancy Pelosi, and has been privately pressing Democrats to elevate the proposal as a priority, multiple people familiar with the effort said.
White House officials view the proposal as an opportunity for a substantive bipartisan legislative victory that would address a series of clear domestic issues, ranging from bolstering manufacturing to easing pervasive price increases, ahead of a critical election year.
It also serves as a critical element of Biden’s efforts to directly respond to a rising China at a time when the relationship between the two countries has grown increasingly tense amid a series of actions, particularly related to Taiwan, that are viewed as intentionally aggressive by the administration.
The bill comes at a time when Biden and his White House are looking for an opportunity to turn the page on a disappointing end to his first year in office. The potential bipartisan legislative win — when combined with the promise to pick the nation’s first Black female Supreme Court Justice to replace the retiring Stephen Breyer, strong economic growth statistics released Thursday and decreasing Covid-19 cases — could signal a turnaround the President desperately needs ahead of November’s midterm elections.
On the policy side of things, it addresses a series of urgent issues, most notably the global shortage in semi-conductor chips, that Biden has consistently highlighted throughout his first year in office.
On the political front, it neatly aligns with what Biden framed as the core of his economic policy — an emphasis on domestic manufacturing and a clear and unmitigated effort to directly bolster US economic and technological advances to counter a rising China.
The moment arrives as Biden’s highest-profile legislative goals have run into a brick wall.
Biden’s cornerstone $1.75 trillion economic and climate package has been frozen in place due to the opposition of West Virginia Democratic Sen. Joe Manchin, with the centrist Democrat collapsing the arduous, months-long process to pass the bill in December. A few weeks later, Senate Republicans unanimously opposed Biden’s voting reform push — and Manchin joined with Sen. Kyrsten Sinema, an Arizona Democrat, to reject the Biden-backed effort to change the Senate filibuster rule to pass the measure with a simple majority.
The twin defeats laid bare the reality of Biden’s precarious political position, wrestling with the slimmest of congressional majorities and searching for a path forward at the very moment he entered a midterm election year with his lowest poll numbers of his time in office. The result drew no shortage of concern and complaints from Democrats both inside and outside of Washington.
White House officials stress that they plan to take another run at a scaled back — if still sweeping — Build Back Better package. There’s also cautious optimism that the bipartisan group of senators working to reform the Electoral Count Act could lead to an outcome Biden would support, even as officials have kept their distance from the effort and take pains to note it’s not a substitute for their voting reform efforts.
Yet neither of those is viewed inside the White House as imminent, with both likely weeks away from taking legislative center stage. A February 18 government funding deadline remains the most pressing issue on the calendar, but talks on a broader funding agreement, while progressing, have been plodding, indicating another short-term extension may prove necessary.
‘The sweetest of political sweet spots’
Therein lies the long-awaited opening for action.
As Democrats sought to retrench amid the setbacks, they didn’t have to look far for a proposal to move to the forefront — one that had already passed the Senate with significant bipartisan support and that White House officials see as carrying significant policy and political benefits.
At the core of the bill is $52 billion to turbocharge US semiconductor development and manufacturing, an area of palpable — and growing — economic and national security concern for administration officials. The effort would mark dramatic expansion of federal investment in manufacturing, new technologies and research and development, marking a dive into industrial policy designed to spur innovation and private sector follow-on that could dramatically reshape the US posture in what has become a strident technological rivalry with China.
“Let’s do it for the sake of our economic competitiveness and our national security,” Biden said as he pressed lawmakers to act on the proposal last week at the White House. “Let’s do it for the cities and towns all across America working to get their piece of the global economic package.”
“We need not have confrontation, but we have a stiff economic and technological competition,” Biden added, speaking of China, which has served as a — if not the — animating element of Biden’s foreign and domestic policy efforts.
The pervasive shortage of chips, which are critical components in everything from cars and washing machines to phones and electrical grids, has been perhaps the most acutely painful of a myriad of pandemic-driven supply chain issues that have contributed to inflation that sits at a year-over-year 39-year high.
Some manufacturers that rely on semiconductors are down to less than five days’ worth of inventory, according to a report released Tuesday by the Commerce Department.
“It’s China, it’s national security, it’s inflation, it’s manufacturing, it’s bipartisan,” one Democratic lawmaker who has pushed to move the bill for several months told CNN. “Beyond the policy necessity, it’s the sweetest of political sweet spots.”
That a single bill could directly address some of the most significant issues facing the country is not lost on a White House — or frontline House Democrats — looking for a win.
“There’s not a member of Congress who is going into their district and not hearing about inflation, supply chain, chips,” Raimondo said.
A ‘Sputnik moment’
Yet for all of its political salience, supporters view the proposal as broadly transformational.
Biden, when talking about the effort, has framed it through his oft-mentioned lens of the world facing an existential moment where democracies must confront the challenge of rising autocratic regimes.
Sen. Todd Young, the Indiana Republican who has spearheaded the effort and successfully shepherded the measure through the Senate along with Schumer, the lead Democratic author, has compared the measure to a “Sputnik moment.”
In the place of the Soviet Union’s technological advancements of last century, Young has pointed to China’s vast investment in research and technology driving the USpublic and private sector response.
White House officials view the measure as a vehicle not just for economic and technological advancement, but societal as well.
One White House official outlined how design of the effort can re-attach the now disparate elements of local communities — where things like regional technology hubs can serve as drivers for university researchers and corporations to align with workers and labor unions and philanthropic and community organizations.
Taken together, they are lofty — and, to a degree, hard to quantify — ambitions for a single piece of legislation. But they also underscore sheer scale of what would mark the largest industrial policy effort in recent history.
Despite suggestions by some lawmakers that the semiconductor piece be split off and moved separately, White House officials and key sponsors repeatedly rejected the idea, knowing separating the most urgent component would likely doom its other parts.
The package, for it to have its full effect, needed to stay intact, they said.
Yet for months the critical, if underappreciated, element of Biden’s legislative checklist sat in limbo, stuck behind high-profile Democratic priorities, and weighed down by a handful of substantive policy disputes.
“The biggest stumbling block to getting this done has just been distraction,” Young said in an interview with Punchbowl News, citing the White House and congressional Democratic focus that, for months on end, centered on finding a path for Biden’s Build Back Better Act.
White House officials note Biden’s focus on the core elements has been consistent throughout, with a bipartisan meeting to highlight the issue in February, followed by an executive order that laid the groundwork for the administration’s focus on supply chain resilience — with a clear focus on semiconductor chips.
The Senate process was largely driven by lawmakers, with the White House providing technical advice and consultation, and those conversations have continued in the months that followed. Still, officials acknowledge that an almost all-consuming Democratic focus other agenda items played a role in a timeline that has remained ambiguous for months.
A clear shift emerges
But over the course of the last week, a series of intentional moves have underscored a clear shift.
Biden highlighted the need for the legislation at a White House event, Pelosi listed the proposal in a memo to House Democrats as a top priority for House consideration and the Commerce Department released a report highlighting the severity of the current semiconductor shortage — data Raimondo described as “truly alarming.”
In the most critical step, House Democrats released their long-awaited 3,000-page version of the bill.
“We are hopeful about that process moving forward quickly, and the President would certainly like to sign it as soon as possible,” White House press secretary Jen Psaki told reporters Wednesday.
There remain significant hurdles, even as the White House throws its weight behind quick action.
House Republicans have already made clear they largely plan to oppose the House Democratic proposal after their top committee members felt cut out as Democratic leaders moved to release the bill text. Administration officials, including Raimondo, have been pressing to line up the votes the last several days.
The House bill diverges in several critical areas from its Senate counterpart, laying the groundwork for a complex conference process after House passage. Resolving those differences, particularly on differing trade provisions, between powerful House Democratic chairs and Senate authors who can point to a significant bipartisan vote in their favor is certain to create complications.
The window for action, even though it’s clearly open at the moment, may be fleeting as other priorities bubble in the background — something underscored by the surprise addition of a looming Supreme Court confirmation battle to the Senate agenda
Still, Biden’s advisers have strategically mapped out ways to keep the issue on the front burner. Biden will highlight the bill, and the need to get it to his desk, once again when he travels to Pittsburgh on Friday. There will be an intensive focus on its necessity, not just for the near term, but also in laying the groundwork for a US. competitive advantage for years in the future.
A sustained public and private focus is planned in the weeks ahead, officials said, as House Democrats move on their version of the legislation and then both chambers work to reconcile differences to get a final version to Biden’s desk.
The economic and national security risks, after all, aren’t going away, even if it’s taken longer than some lawmakers would have liked to finally lay out the path to the finish line.
“Our challenge is to show leadership and not get tied up in any one particular red-line and miss the forest for the trees, which is: We have a semiconductor crisis,” Raimondo said. “It’s a national security crisis. It’s an economic security crisis. And so, we just have to try to keep folks really focused on that.”